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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TOWER AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 41-1746238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 342-2310
(Address, including zip code, and telephone number, including area code, of
Registrant's principal offices)
SCOTT D. RUED
TOWER AUTOMOTIVE, INC.
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 342-2310
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
DENNIS M. MYERS, ESQ.
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
(312) 861-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C>
5% Convertible Subordinated Notes due 2004.......................... $200,000,000 $60,606
Common Stock, par value $.01 per share.............................. (2) (2)
</TABLE>
(1) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
(2) Such indeterminate number of shares of Common Stock as shall be issuable
upon the conversion of the Convertible Notes being registered hereunder. No
separate consideration will be received by the Company upon conversion of
the Convertible Notes and, accordingly, no additional registration fee is
payable pursuant to Rule 457(i) under the Securities Act.
--------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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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 JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 27, 1997
$200,000,000
TOWER AUTOMOTIVE, INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE 2004
This Prospectus relates to the offering by the Selling Securityholders (the
"Selling Securityholders") of up to $200,000,000 aggregate principal amount of
5% Convertible Subordinated Notes due 2004 (the "Notes") of Tower Automotive,
Inc. (the "Company") and the 3,864,734 shares of common stock, par value $.01
per share (the "Common Stock"), of the Company that are issuable upon the
conversion of the Notes. See "Selling Securityholders." The Notes are
convertible at the option of the holder into shares of Common Stock, at any time
on or after the 90th day following the latest date of initial issuance of the
Notes and prior to the close of business on the Stated Maturity (as defined) of
the Notes, unless previously redeemed or repurchased, at a conversion price (the
"Conversion Price") of $51 3/4 per share (equivalent to a conversion rate of
19.3237 shares per $1,000 principal amount of Notes), subject to adjustment in
certain events. See "Description of Notes-- Conversion Rights." The Notes and
the underlying Common Stock issuable upon the conversion of the Notes are
sometimes collectively referred to herein as the "Securities."
Interest on the Notes is payable semi-annually on February 1 and August 1 of
each year, commencing on February 1, 1998. The Notes are redeemable, in whole or
in part, at the option of the Company, at any time on or after August 1, 2000,
at the redemption prices set forth herein, plus accrued and unpaid interest and
liquidated damages, if any, to the date of redemption. The Company will be
required to offer to purchase the Notes upon a Change of Control (as defined) at
100% of the principal amount thereof, plus accrued and unpaid interest and
liquidated damages, if any, to the date of purchase. There can be no assurance
that the Company will have available financial resources necessary to repurchase
the Notes in such circumstances.
The Notes are general, unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness (as defined) of
the Company. In addition, the Notes are effectively subordinated to all of the
obligations of the Company's subsidiaries, including trade creditors. The
Indenture (as defined) does not restrict the incurrence of Senior Indebtedness
(as defined) or other indebtedness by the Company and its subsidiaries. See
"Description of Notes."
The Securities may be sold from time to time pursuant to this Prospectus by
the Selling Securityholders in one or more transactions (which may involve one
or more block transactions) on the exchange on which the Securities are traded,
if any, in the over-the-counter market, in separately negotiated transactions or
in a combination of such transactions; that each sale may be made either at
market prices prevailing at the time of such sale or at negotiated prices; that
some or all of the Securities may be sold through brokers acting on behalf of
the Selling Securityholders or to dealers or underwriters for resale by such
dealers or underwriters; and that in connection with such sales such brokers,
dealers and underwriters may receive compensation in the form of discounts or
commissions from the Selling Securityholders and may receive commissions from
the purchasers of Securities for whom they act as broker or agent (which
discounts and commissions are not anticipated to exceed those customary in the
types of transactions involved). See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Securities by the Selling Securityholders. See "Use of Proceeds." The Company
has agreed to pay the cost of the registration of the Securities and the
preparation of this Prospectus and the Registration Statement under which it is
filed. The expenses so payable by the Company are estimated to be approximately
$140,000. The Securities offered hereby are not subject to any underwriting
agreement.
On October 24, 1997, the last reported sale price for the Common Stock on
the New York Stock Exchange (the "NYSE") (where it trades under the symbol
"TWR") was $43.75 per share.
SEE "RISK FACTORS," BEGINNING ON PAGE 5 OF THIS PROSPECTUS, FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
SECURITIES OFFERED HEREBY.
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<PAGE>
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.
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The date of this Prospectus is , 1997
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement," which term
shall include any amendments thereto) on Form S-3 under the Securities Act of
1933 (the "Securities Act"), with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission, and to which reference is hereby made. Statements made in this
Prospectus as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission referred to below.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and information filed by the Company with the
Commission pursuant to the informational requirements of the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices located at Seven 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 may be obtained at
prescribed rates by writing the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. Such reports, proxy statements and other information can
also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus
and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by Amendment No. 1 to Annual Report on Form
10-K/A filed on April 10, 1997 (Commission File No. 1-12733).
2. The Company's Quarterly Report on Form 10-Q for the quarters ended March
31, 1997 and June 30, 1997 (Commission File No. 1-12733).
3. The Company's Current Report on Form 8-K, dated April 2, 1997
(Commission File No. 1-12733).
4. The Company's Current Report on Form 8-K, as amended by Amendment No. 1
to Current Report on Form 8-K/A, each dated April 11, 1997 (Commission
File No. 1-12733).
5. The Company's Current Report on Form 8-K, dated April 18, 1997
(Commission File No. 1-12733).
6. The Company's Current Report on Form 8-K, dated October 24, 1997
(Commission File No. 1-12733).
7. The Company's Proxy Statement, dated April 4, 1997.
8. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed on February 11, 1997.
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All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering contemplated hereby shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
their respective dates of filing. Any statement contained herein or in any
document incorporated or deemed to be incorporated shall be deemed to be
modified or superseded for all purposes of this Prospectus to the extent that a
statement contained in this Prospectus or in any subsequently filed document
which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon written or oral request of such person,
a copy of any and all of the information that has been incorporated by reference
in this Prospectus (other than exhibits thereto, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Requests should be directed to: Tower Automotive, Inc., 4508 IDS
Center, Minneapolis, Minnesota 55402, Attention: Shareholder Services (telephone
number (612) 342-2310).
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THE COMPANY
UNLESS THE CONTEXT INDICATES OTHERWISE, AS USED IN THIS PROSPECTUS THE TERM
"COMPANY" REFERS TO TOWER AUTOMOTIVE, INC., ITS CONSOLIDATED SUBSIDIARIES AND
THEIR RESPECTIVE PREDECESSORS. THE COMPANY ACQUIRED TRYLON CORPORATION
("TRYLON") ON JANUARY 16, 1996, MASCOTECH STAMPING TECHNOLOGIES, INC. ("MSTI")
ON MAY 31, 1996, SUBSTANTIALLY ALL OF THE ASSETS OF AUTOMOTIVE PRODUCTS COMPANY
("APC"), A DIVISION OF A.O. SMITH CORPORATION ("A.O. SMITH"), ON APRIL 18, 1997
AND SOCIETA INDUSTRIA MECCANICA E STAMPAGGIO S.P.A. ("SIMES") ON MAY 9, 1997.
SUCH ACQUISITIONS ARE REFERRED TO HEREIN AS THE "TRYLON ACQUISITION," THE "MSTI
ACQUISITION," THE "APC ACQUISITION," AND THE "SIMES ACQUISITION," RESPECTIVELY.
UNLESS OTHERWISE INDICATED, FINANCIAL AND OPERATING DATA PRESENTED HEREIN FOR
1996 ON A PRO FORMA BASIS GIVE EFFECT TO THE MSTI ACQUISITION AND THE APC
ACQUISITION AS IF THEY HAD EACH OCCURRED AT THE BEGINNING OF THE PERIODS
PRESENTED.
The Company is a leading designer and producer of high-quality body
structure components and assemblies used by the major North American automotive
original equipment manufacturers ("OEMs"), Ford, Chrysler and General Motors,
and certain foreign OEMs with manufacturing operations in North America
("Transplants"), including Honda, Toyota, Nissan and Mazda. The Company's
current products range from large structural stampings and assemblies, such as
body pillars, chassis, suspension and floor pan components and major housing
assemblies, to engineered assemblies, such as hood and deck lid hinges and brake
components. On April 18, 1997, the Company acquired A.O. Smith's APC division, a
leading manufacturer of light truck frames, automotive engine cradles and other
structural and suspension components, assemblies and modules used by major North
American OEMs and Transplants. As a result of the APC Acquisition, the Company
believes it is one of the largest independent suppliers of structural components
and assemblies to the North American automotive market (based on net sales).
Since its inception in April 1993, the Company's revenues have grown rapidly
through a focused strategy of internal growth and a highly disciplined
acquisition program. During the last four years, the Company has successfully
completed six acquisitions. As a result of such acquisitions and internal
growth, the Company's revenues have increased from approximately $86 million in
1993 to approximately $1.3 billion in 1996 (pro forma for the MSTI Acquisition
and the APC Acquisition), representing a compound annual growth rate of
approximately 148%. The APC Acquisition represents the Company's largest
acquisition to date.
The Company operates in the large and highly fragmented structural segment
of the automotive supply industry, which has recently begun to undergo
significant consolidation. In order to lower costs and improve quality, OEMs are
reducing their supplier base by awarding sole-source contracts to full-service
suppliers who are able to supply larger portions of a vehicle on a global basis.
OEMs' criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. OEMs are increasingly seeking suppliers capable of providing
complete systems or modules rather than suppliers who only provide separate
component parts. In addition, OEMs are increasingly requiring their suppliers to
have the capability to design and manufacture their products in multiple
geographic markets. As a full-service supplier with strong OEM relationships,
the Company expects to continue to benefit from these trends within the
structural segment of the automotive supply industry.
The Company's business objective is to capitalize on the consolidation,
globalization and system/ modular sourcing trends in the automotive supply
industry in order to be the leading provider of structural and suspension
components to OEMs worldwide. The Company's growth strategy focuses on the
identification and pursuit of (i) strategic acquisitions; (ii) modular product
opportunities; (iii) increased vehicle penetration; and (iv) "world car"
opportunities.
The Company was formed to acquire R.J. Tower Corporation, the acquisition of
which was completed in April 1993 (the "R.J. Tower Acquisition") for an
aggregate cost of approximately $26 million. Since the
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R.J. Tower Acquisition, the Company has successfully completed six strategic
acquisitions and a significant joint venture investment:
- EDGEWOOD. In May 1994, the Company acquired Edgewood Tool and
Manufacturing Company and its affiliate, Ann Arbor Assembly Corporation
(collectively, "Edgewood") for approximately $30 million in aggregate
consideration.
- KALAMAZOO. In June 1994, the Company acquired Kalamazoo Stamping and Die
Company, a supplier of structural stampings and assemblies, for approximately
$12 million in cash.
- TRYLON. In January 1996, the Company acquired Trylon from MascoTech, Inc.
("MascoTech") for approximately $25 million in cash, including transaction
costs.
- MSTI. In May 1996, the Company acquired MSTI from MascoTech for
approximately $79 million (including the payment of related fees and expenses),
plus additional earn-out payments if certain operating targets are achieved by
the MSTI facilities in the first three years following the acquisition.
- APC. In April 1997, the Company acquired APC from A.O. Smith for
approximately $725 million in cash (which included management's estimate of
certain post-closing adjustments associated with the net assets of APC at
closing).
- SIMES. In May 1997, the Company acquired SIMES for approximately $51
million in cash, plus up to an additional $3.0 million if SIMES achieves certain
operating targets following the acquisition.
- METALSA. On October 9, 1997, the Company entered into a joint venture with
Promotora de Empresas Zano, S.A. de C.V. ("Proeza") pursuant to which the
Company acquired a 40% equity interest in Metalsa S.A. de C.V. ("Metalsa"), the
largest supplier of vehicle structural components in Mexico. In connection with
such agreement, the Company paid Proeza an aggregate of $120 million, with an
additional amount of up to $45 million payable based upon the net earnings of
Metalsa in 1998, 1999 and 2000.
The Company's principal executive offices are located at 4508 IDS Center,
Minneapolis, Minnesota 55402, and its telephone number is (612) 342-2310.
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RISK FACTORS
THIS PROSPECTUS, INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN,
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT. ALSO, DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY WITH THE
COMMISSION AND INCORPORATED HEREIN BY REFERENCE WILL CONTAIN FORWARD-LOOKING
STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF THE
COMPANY'S MANAGEMENT AS WELL AS ON ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY
AVAILABLE TO THE COMPANY AT THE TIME SUCH STATEMENTS WERE MADE. WHEN USED IN
THIS PROSPECTUS, THE WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT,"
"INTENDS" AND SIMILAR EXPRESSIONS, AS THEY RELATE TO THE COMPANY, ARE INTENDED
TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH INCLUDE STATEMENTS RELATING TO,
AMONG OTHER THINGS, (I) THE INTEGRATION OF THE OPERATIONS OF APC WITH THOSE OF
THE COMPANY; (II) THE STRATEGIC BENEFITS OF THE APC ACQUISITION; AND (III) THE
COMPANY'S ABILITY TO CONTINUE TO IMPLEMENT ITS BUSINESS AND GROWTH STRATEGY.
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS AS A RESULT OF THE RISK FACTORS SET FORTH BELOW, THE
MATTERS SET FORTH OR INCORPORATED IN THE PROSPECTUS GENERALLY AND CERTAIN
ECONOMIC AND BUSINESS FACTORS, SOME OF WHICH MAY BE BEYOND THE CONTROL OF THE
COMPANY. THE COMPANY CAUTIONS THE READER, HOWEVER, THAT THIS LIST OF FACTORS MAY
NOT BE EXHAUSTIVE, PARTICULARLY WITH RESPECT TO FUTURE FILINGS WITH THE
COMMISSION. IN ANALYZING AN INVESTMENT IN THE SECURITIES OFFERED HEREBY,
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, ALONG WITH THE OTHER MATTERS
REFERRED TO HEREIN, THE RISK FACTORS DESCRIBED BELOW.
RISKS ASSOCIATED WITH LEVERAGE
The APC Acquisition significantly increased the Company's debt service
obligations. As of June 30, 1997, on a pro forma basis giving effect to the
Initial Offering (as defined), the Company had total outstanding indebtedness of
approximately $607 million, or approximately 56% of the Company's total
capitalization. In addition, the Company may incur additional indebtedness
through borrowings of up to $346 million under its bank credit agreement (the
"Credit Agreement"), subject to the satisfaction of certain financial tests. The
degree to which the Company is leveraged could have important consequences to
the holders of the Notes, including the following: (i) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions or other purposes may be limited or impaired; (ii)
the Company's operating flexibility with respect to certain matters is limited
by covenants contained in the Credit Agreement, which limit the ability of the
Company's operating subsidiaries to incur additional indebtedness and contingent
liabilities, grant liens, pay dividends, make investments, prepay other
indebtedness or engage in certain asset sales, acquisitions, joint ventures,
mergers and consolidations; and (iii) the Company's degree of leverage may make
it more vulnerable to economic downturns, may limit its ability to pursue other
business opportunities and may reduce its flexibility in responding to changing
business and economic conditions.
The Company may seek growth through selective acquisitions. The Company
could incur substantial indebtedness in connection with an acquisition, in which
event the Company's leverage would be increased. Following the completion of the
sale of the Notes offered hereby, the Company may seek to refinance a portion of
its borrowings under the Credit Agreement to increase its financial flexibility
and to extend the maturity of such borrowings. Such refinancing could increase
the Company's overall interest expense.
RELIANCE ON MAJOR CUSTOMERS AND SELECTED MODELS
Ford, Chrysler and General Motors accounted for approximately 67%, 10% and
4%, respectively, of the Company's revenues during 1996 and approximately 53%,
17% and 17%, respectively, on a pro forma basis. Although the Company has
contracts with many of its customers, such contracts provide for supplying the
customers' requirements for a particular model, rather than for manufacturing a
specific quantity of products. The loss of any one of its major customers or a
significant decrease in demand for certain key models or a group of related
models sold by any of its major customers could have a material adverse effect
on the Company. There is substantial and continuing pressure from OEMs to reduce
costs, including the cost of products purchased from outside suppliers such as
the Company. Certain of the
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Company's products are sold under long-term agreements that require the Company
to provide annual cost reductions to such purchasers (directly through price
reductions or indirectly through suggestions regarding manufacturing
efficiencies or other cost savings) by certain percentages each year. There can
be no assurance that the Company will be able to generate such cost savings in
the future. If the Company were unable to generate sufficient production cost
savings in the future to offset such price reductions, the Company's gross
margin could be adversely affected.
RISKS RELATED TO INDUSTRY CYCLICALITY AND SEASONALITY
The automotive market is highly cyclical and is dependent on consumer
spending. Economic factors adversely affecting automotive production and
consumer spending could adversely impact the Company. In addition, the Company's
business is somewhat seasonal. The Company typically experiences decreased
revenue and operating income during the third quarter of each year due to the
impact of OEM plant shutdowns in July for vacations and model changeovers. The
Company expects such seasonality to continue following the APC Acquisition.
FAILURE TO REALIZE BENEFITS OF APC ACQUISITION
There can be no assurance that the anticipated benefits of the APC
Acquisition will be realized or that the combination of the Company and APC will
be successful. The Company completed the APC Acquisition on April 18, 1997 and
is currently in the process of integrating the operations of APC and the
Company. There can be no assurance, however, that the Company will not
experience difficulties in integrating the operations of APC with those of the
Company or that the anticipated cost savings from such integration will be
realized. The integration of APC will require the experience and expertise of
certain key managers of APC who are expected to be retained by the Company.
There can be no assurance that the APC managers retained by the Company will
remain with the Company for the time period necessary to successfully integrate
APC into the Company.
RISKS ASSOCIATED WITH OBTAINING BUSINESS FOR NEW AND REDESIGNED MODEL
INTRODUCTIONS
The Company principally competes for new business both at the beginning of
the development of new models and upon the redesign of existing models by its
major customers. New model development generally begins two to five years prior
to the marketing of such models to the public. There can be no assurance that
the Company will be successful in obtaining significant new business on new
models and in supplying additional parts for existing models as they are
redesigned by their customers. The failure of the Company to obtain new business
on new models or to retain or increase business on redesigned existing models
could adversely affect the Company.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
Acquiring businesses that complement the Company's existing business has
been and will continue to be an important element of the Company's strategy for
achieving profitable growth. There can be no assurance that suitable acquisition
candidates will be identified and acquired in the future, that financing for any
such acquisitions will be available on satisfactory terms, that the Company will
be able to accomplish its strategic objectives as a result of any such
acquisition or that any business or assets acquired by the Company will be
integrated successfully into the Company's operations. The Company is
continually evaluating possible acquisitions and engages in discussions with
acquisition candidates from time to time. The Company is currently pursuing
preliminary discussions with potential acquisition candidates.
RISKS FROM COMPETITION
The automotive components supply industry is highly competitive. Some of the
competitors of the Company, including certain divisions of its OEM customers,
are larger and have greater financial and
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other resources than the Company. There can be no assurance that the Company
will be able to maintain its current competitive position and continue to supply
its products to OEMs.
HOLDING COMPANY STRUCTURE
The Company is a holding company with no significant business operations
other than holding the capital stock of R.J. Tower Corporation, a Michigan
corporation ("R.J. Tower"). In repaying its indebtedness, including the Notes,
the Company must rely on dividends and other payments made to it by R.J. Tower.
In addition to conducting operations, R.J. Tower holds the capital stock of the
Company's other operating subsidiaries.
The holders of the Notes have no direct claims against the Company's
subsidiaries. The ability of the Company's subsidiaries to make payments to the
Company will be affected by the obligations of such subsidiaries to their
creditors. Claims of holders of indebtedness of the Company, including the
Notes, against the cash flow and assets of the Company's subsidiaries will be
effectively subordinated to claims of such creditors. In addition, the rights of
the holders of the Notes to participate in the assets of any subsidiary of the
Company upon such subsidiary's liquidation or recapitalization will be subject
to the prior claims of such subsidiary's creditors. At June 30, 1997, on a pro
forma basis giving effect to the Initial Offering, subsidiaries of the Company
would have had approximately $784 million of indebtedness and other obligations
outstanding. The ability of the Company's subsidiaries to make payments to the
Company will also be subject to, among other things, applicable state corporate
laws and contractual restrictions. State corporate law applicable to the
Company's subsidiaries generally prohibits the payment of dividends by any given
subsidiary unless such subsidiary has capital surplus or net profits in the
current or immediately preceding year. In addition, the payment of cash
dividends to the Company by such operating subsidiaries is limited by the terms
of the Credit Agreement. The Credit Agreement has been amended to permit the
distribution of cash from such subsidiaries to the Company for the purpose of
paying interest on the Notes and the principal thereof at their Stated Maturity.
The indenture under which the Notes were issued (the "Indenture") does not limit
the ability of the Company's subsidiaries to incur such restrictions in the
future.
SUBORDINATION
The Notes are subordinated in right of payment to all existing and future
Senior Indebtedness of the Company and will be structurally subordinated to all
liabilities, including trade payables, of the Company's subsidiaries. As of June
30, 1997, on a pro forma basis giving effect to the Initial Offering, the
Company and its subsidiaries would have had approximately $784 million of
consolidated indebtedness and other obligations effectively ranking senior to
the Notes. The Indenture does not restrict the incurrence of Senior Indebtedness
or other indebtedness by the Company or its subsidiaries. By reason of such
subordination, in the event of the insolvency, bankruptcy, liquidation,
reorganization, dissolution or winding up of the business of the Company, the
assets of the Company will be available to pay the amounts due on the Notes only
after all Senior Indebtedness has been paid in full and, therefore, there may
not be sufficient assets remaining to pay amounts due on any or all of the Notes
then outstanding. See "Description of Notes--Subordination."
ANTI-TAKEOVER PROVISIONS COULD DELAY OR PREVENT A CHANGE IN CONTROL OR ADVERSELY
IMPACT THE STOCK PRICE
Certain provisions of the Company's Amended and Restated Certificate of
Incorporation, which permit the Board of Directors to issue up to 5,000,000
shares of preferred stock without further stockholder approval, as well as
certain provisions of the Delaware General Corporation Law, could have the
effect of deterring hostile takeovers or delaying, deterring or preventing a
change in control of the Company, including transactions in which stockholders
might otherwise receive a premium for their shares over current market prices.
In addition, the issuance of preferred stock to delay, deter or prevent a change
7
<PAGE>
of control could have an adverse effect on the market price of the Common Stock.
See "Description of Capital Stock."
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Common Stock could be subject to significant
fluctuations in response to the Company's operating results, changes in earnings
estimated by securities analysts or the Company's ability to meet those
estimates, publicity regarding the automotive industry and other factors, some
of which may be beyond the Company's control. There can be no assurance that the
market price of the Common Stock will not decline below the price at which the
shares of the Common Stock are currently being traded. In addition, the stock
markets have from time to time experienced extreme price and volume volatility.
These fluctuations may be unrelated to the operating performance of particular
companies whose shares are traded. Market fluctuations may adversely affect the
market price of the Common Stock.
LIMITATIONS ON REPURCHASE OF NOTES UPON CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company will be required to
offer to purchase the Notes. If a Change of Control were to occur, there can be
no assurance that the Company would have sufficient financial resources, or
would be able to arrange financing, to pay the repurchase price for all Notes
tendered by holders thereof. In addition, the Company's repurchase of the Notes
as a result of a Change of Control may be prohibited or limited by, or create an
event of default under, the terms of agreements related to borrowings which the
Company may enter into from time to time. Failure of the Company to purchase
tendered Notes would constitute an Event of Default under the Indenture. See
"Description of Notes--Repurchase of Notes at the Option of the Holder Upon a
Change of Control."
ABSENCE OF EXISTING MARKET FOR NOTES
The Notes constitute a new issue of securities with no established trading
market. The Initial Purchasers advised the Company at the time of their purchase
that, following completion of the sale of the Notes, they intended to make a
market in the Notes. Such market-making, however, may be suspended by the
Initial Purchasers at anytime without notice.
Prior to the effectiveness of the Registration Statement, the Notes were
eligible for trading through the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") market; however, the Notes sold hereunder will no
longer be eligible for trading through the PORTAL market and no assurance can be
given that an active trading market for the Notes will develop or, if such
market develops, as to the liquidity or sustainability of such market. If a
trading market does not develop or is not maintained, holders of the Notes may
experience difficulty in reselling, or an inability to sell, the Notes. If a
market for the Notes develops, any such market may be discontinued at any time.
If a public trading market develops for the Notes, future trading prices of the
Notes will depend on many factors, including, among other things, prevailing
interest rates, the Company's operating results and the market for similar
securities. Depending on prevailing interest rates, the market for similar
securities and other factors, including the financial condition of the Company,
the Notes may trade at a discount from their principal amount.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Securities by the Selling Securityholders.
8
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------- --------------------
PRO FORMA
1994 1995 1996 1996(1) 1996 1997
--------- --------- --------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (3)............... 6.3x 6.2x 5.0x 2.7x 4.7x 3.7x
<CAPTION>
PRO FORMA
1997(2)
-------------
<S> <C>
Ratio of earnings to fixed charges (3)............... 2.3x
</TABLE>
- ------------------------
(1) The unaudited pro forma data for the year ended December 31, 1996 reflect:
(i) the MSTI Acquisition (including related financing transactions); (ii)
the APC Acquisition; (iii) the sale by the Company of 2,232,900 shares of
Common Stock in June 1996 (the "1996 Offering") and the application of the
proceeds therefrom; (iv) the refinancing of the Company's old credit
agreement (the "Old Credit Agreement") and the redemption of the Company's
senior notes (the "Senior Notes") in connection with the APC Acquisition;
(v) the sale by the Company of 8,500,000 shares of Common Stock in April
1997 (the "1997 Offering") and the application of the proceeds therefrom;
and (vi) the sale of the Notes and the application of the net proceeds
therefrom, as if such transactions had occurred on January 1, 1996. The
Company acquired Trylon on January 16, 1996. Results of operations of Trylon
for the period January 1, 1996 through the acquisition date are not material
and therefore have not been included in the Company's pro forma results of
operations for the year ended December 31, 1996. The results of operations
of SIMES have not been included in the Company's pro forma results of
operations for the year ended December 31, 1996 or the three months ended
June 30, 1997 because such results are not material.
(2) The unaudited pro forma data for the six months ended June 30, 1997 reflect:
(i) the APC Acquisition; (ii) the refinancing of the Company's Old Credit
Agreement and the redemption of the Senior Notes in connection with the APC
Acquisition; (iii) the 1997 Offering and the application of the proceeds
therefrom; and (iv) the sale of Notes and the application of the net
proceeds therefrom, as if such transactions occurred on January 1, 1997.
(3) Calculated by dividing earnings by total fixed charges. Earnings consist of
net income plus income taxes and fixed charges excluding capitalized
interest. Fixed charges consist of interest expense, whether expensed or
capitalized, amortization of deferred expense and a portion of rent expense
that can be demonstrated to be representative of the interest factor in the
particular case.
DESCRIPTION OF NOTES
Set forth below is a summary of certain provisions of the Notes. The Notes
were issued pursuant to an Indenture, dated as of July 28, 1997, by and between
the Company and The Bank of New York, as trustee (the "Trustee"). The Notes were
originally sold by the Company on July 29, 1997 (the "Initial Offering") to
Donaldson, Lufkin & Jenrette Securities Corporation, Robert W. Baird & Co.
Incorporated, PaineWebber Incorporated and BT Securities Corporation
(collectively, the "Initial Purchasers"). The Initial Purchasers subsequently
resold the Notes to qualified institutional buyers pursuant to Rule 144A under
the Securities Act, to a limited number of institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and,
outside the United States, to certain persons in offshore transactions in
reliance on Regulation S under the Securities Act.
The following summary of the Notes, the Indenture and the Registration
Rights Agreement among the Company and the Initial Purchasers does not purport
to be complete and is subject to, and is qualified in its entirety by, reference
to all of the provisions of the Indenture and the Registration Rights Agreement,
including the definitions therein of certain terms. Copies of the Indenture and
the Registration Rights Agreement have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. Capitalized terms
used herein without definition have the meanings ascribed to them in the
Indenture or the Registration Rights Agreement, as appropriate. As used in this
section, the "Company"
9
<PAGE>
refers to Tower Automotive, Inc., exclusive of its subsidiaries. Wherever
particular provisions or defined terms of the Indenture (or the form of Note
which is part thereof) or the Registration Rights Agreement are referred to in
this summary, such provisions or defined terms are incorporated by reference as
a part of the statements made and such statements are qualified in their
entirety by such reference. Certain definitions of terms used in the following
summary are set forth under "--Certain Definitions" below.
GENERAL
The Notes are general unsecured obligations of the Company, limited in
aggregate principal amount to $200,000,000. The Notes are subordinated in right
of payment to all Senior Indebtedness of the Company, as described under
"Subordination" below. The Notes have been issued only in fully registered form,
without coupons, in denominations of $1,000 and integral multiples thereof.
The Notes will mature on August 1, 2004. The Notes bear interest at the rate
of 5.0% per annum from July 29, 1997, or from the most recent Interest Payment
Date to which interest has been paid or provided for, payable semiannually on
February 1 and August 1 of each year, commencing February 1, 1998, to the
persons in whose names such Notes are registered at the close of business on the
January 15 and July 15 immediately preceding such Interest Payment Date.
Principal of, premium, if any, and interest on, and liquidated damages with
respect to, the Notes will be payable, the Notes will be convertible and the
Notes may be presented for registration of transfer or exchange, at the office
or agency of the Company maintained for such purpose, which office or agency
shall be maintained in the Borough of Manhattan, The City of New York. Interest
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
At the option of the Company, payment of interest and liquidated damages may
be made by check mailed to the Holders of the Notes at the addresses set forth
upon the registry books of the Company. No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Until otherwise designated by the Company, the
Company's office or agency will be the corporate trust office of the Trustee
presently located in New York City.
The Indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the repurchase of securities of the Company or the
incurrence of Senior Indebtedness. The Indenture contains no covenants or other
provisions to afford protection to holders of Notes in the event of a highly
leveraged transaction or a change of control of the Company, except to the
limited extent described under "--Repurchase of Notes at the Option of the
Holder Upon a Change of Control" below.
CONVERSION RIGHTS
Each Holder of Notes will have the right at any time on or after the 90th
day following the latest date of initial issuance of the Notes and prior to the
close of business on the Stated Maturity of the Notes, unless previously
redeemed or repurchased, at the Holder's option, to convert any portion of the
principal amount thereof that is an integral multiple of $1,000 into shares of
Common Stock at any time at the Conversion Price set forth on the cover page of
this Prospectus (subject to adjustment as described below). The right to convert
a Note called for redemption or delivered for repurchase and not withdrawn will
terminate at the close of business on the fifth Business Day, respectively,
immediately prior to the Redemption Date or Repurchase Date for such Note,
unless the Company subsequently fails to pay the applicable Redemption Price or
Repurchase Price, as the case may be.
In the case of any Note that has been converted after any Record Date, but
on or before the next Interest Payment Date, interest, the stated due date of
which is on such Interest Payment Date, shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid to
the Holder of such Note who is a Holder on such Record Date. Any Note converted
after any Record Date but before the next Interest Payment Date (other than
Notes called for redemption or subject to a
10
<PAGE>
Repurchase Offer during the period from the Record Date to and including the
fifth Business Day after the next succeeding Interest Payment Date) must be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Notes being surrendered for
conversion; provided no such payment shall be required with respect to interest
payable on August 1, 2000. No fractional shares will be issued upon conversion
but, in lieu thereof, an appropriate amount will be paid in cash by the Company
based on the market price of Common Stock (determined in accordance with the
Indenture) at the close of business on the day of conversion. As a result of the
foregoing provisions, Holders that surrender Notes for conversion on a date that
is not an Interest Payment Date will not receive any interest for the period
from the Interest Payment Date next preceding the date of conversion to the date
of conversion or for any later period, except for Notes that are called for
redemption or subject to a Repurchase Offer during the period from the Record
Date to and including the fifth Business Day after the Interest Payment Date to
which it relates.
The Conversion Price will be subject to adjustment in certain events,
including (a) any payment of a dividend (or other distribution) payable in
Common Stock on any class of Capital Stock of the Company, (b) any issuance to
all or substantially all holders of Common Stock of rights, options or warrants
entitling them to subscribe for or purchase Common Stock at less than the then
current market price of Common Stock (determined in accordance with the
Indenture), provided, however, that if such rights, options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur, (c)
certain subdivisions, combinations or reclassifications of Common Stock, (d) any
distribution to all or substantially all holders of Common Stock of evidences of
indebtedness, shares of Capital Stock other than Common Stock, cash or other
assets (including securities, but excluding those dividends, rights, options,
warrants and distributions referred to above and excluding dividends and
distributions paid exclusively in cash and in mergers and consolidations to
which the third succeeding paragraph applies), (e) any distribution consisting
exclusively of cash (excluding any cash portion of distributions referred to in
(d) above, or cash distributed upon a merger or consolidation to which the third
succeeding paragraph applies) to all or substantially all holders of Common
Stock in an aggregate amount that, combined together with (i) all other such
all-cash distributions made within the then preceding 12 months in respect of
which no adjustment has been made and (ii) any cash and the fair market value of
other consideration paid or payable in respect of any tender or exchange offer
by the Company or any of its subsidiaries for Common Stock concluded within the
preceding 12 months in respect of which no adjustment has been made, exceeds 15%
of the Company's market capitalization (defined as being the product of the then
current market price of the Common Stock times the number of shares of Common
Stock then outstanding) on the record date of such distribution, and (f) the
completion of a tender or exchange offer made by the Company or any of its
subsidiaries for Common Stock that involves an aggregate consideration that,
together with (i) any cash and other consideration payable in a tender or
exchange offer by the Company or any of its subsidiaries for Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer in respect of which no adjustment has been made and (ii) the
aggregate amount of any such all-cash distributions referred to in (e) above to
all holders of Common Stock within the 12 months preceding the expiration of
such tender or exchange offer in respect of which no adjustments have been made,
exceeds 15% of the Company's market capitalization on the expiration of such
tender offer. No adjustment of the Conversion Price will be required to be made
until the cumulative adjustments amount to 1.0% or more of the Conversion Price
as last adjusted.
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the Conversion Price, the
Holders of Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States federal income tax as a dividend; in
certain other circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock.
11
<PAGE>
The Company, from time to time and to the extent permitted by law, may
reduce the Conversion Price by any amount for any period of at least 20 Business
Days, in which case the Company shall give at least 15 days notice of such
reduction, if the Board of Directors has made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in the
Conversion Price, in addition to those set forth above, as the Board of
Directors 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 United States federal
income tax purposes. See "Certain United States Federal Income Tax
Consequences."
In case of any reclassification or change of outstanding shares of Common
Stock issuable upon conversion (other than certain changes in par value) or
consolidation or merger of the Company with or into another Person or any merger
of another Person with or into the Company (other than a merger which does not
result in any reclassification, change, conversion, exchange or cancellation of
outstanding shares of Common Stock), or in case of any sale, transfer or
conveyance of all or substantially all of the assets of the Company, each Note
then outstanding will, without the consent of any Holder of Notes, become
convertible only into the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by a holder of the number of shares of Common Stock into
which such Note was convertible immediately prior thereto, after giving effect
to any adjustment event; provided, that if the kind or amount of securities,
cash and other property is not the same for each share of Common Stock held
immediately prior to such reclassification, change, consolidation, merger, sale,
transfer or conveyance, any Holder who fails to exercise any right of election
shall receive per share the kind and amount of securities, cash or other
property received per share by a plurality of non-electing shares.
The Company will cause all registrations to be made with, and will obtain
any approvals by, any governmental authority under any Federal or state law of
the United States that may be required in connection with the conversion of the
Notes into Common Stock. If at any time during the two-year period following the
Closing Date a registration statement under the Securities Act covering the
shares of Common Stock issuable upon conversion of the Notes is not effective or
is otherwise unavailable for effecting resales of such shares, shares of Common
Stock issued upon conversion of the Notes ("Restricted Shares") may not be sold
or otherwise transferred except in accordance with or pursuant to an exemption
from, or otherwise in a transaction not subject to, the registration
requirements of the Securities Act and, if a registration statement under the
Securities Act is not effective or is otherwise unavailable for effecting
resales of such shares at the time of a conversion, the Restricted Shares will
bear a legend to that effect. The Transfer Agent for the Common Stock will not
be required to accept for registration or transfer any Restricted Shares, except
upon presentation of satisfactory evidence that these restrictions on transfer
have been complied with, all in accordance with such reasonable regulations as
the Company may from time to time agree with the Transfer Agent. Under certain
circumstances, the holders of the Restricted Shares will be entitled to
liquidated damages during such period. See "--Registration Rights."
SUBORDINATION
The Notes are general unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness of the Company.
The Notes are structurally subordinated in right of payment to all liabilities
(including trade payables) of the Company's subsidiaries. At June 30, 1997, on a
pro forma basis giving effect to the Initial Offering, the Company and its
subsidiaries would have had approximately $784 million of consolidated
indebtedness and other obligations ranking senior to the Notes. The Indenture
does not restrict the incurrence of Senior Indebtedness or other indebtedness by
the Company or its subsidiaries or the ability of the Company to transfer assets
or business operations to its subsidiaries, subject to the provisions described
under "--Repurchase of Notes at the Option of the Holder Upon a Change of
Control" and "--Limitation on Merger, Sale or Consolidation" below.
12
<PAGE>
The Indenture will provide that no payment may be made by the Company on
account of the principal of, premium, if any, interest on, or liquidated damages
with respect to, the Notes, or to acquire any of the Notes (including
repurchases of Notes at the option of the Holder) for cash or property (other
than Junior Securities), or on account of the redemption provisions of the
Notes, (i) upon the maturity of any Senior Indebtedness of the Company by lapse
of time, acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and interest on such Senior Indebtedness are
first paid in full (or such payment is duly provided for), or (ii) in the event
of default in the payment of any principal of, premium, if any, or interest on
any Senior Indebtedness of the Company when it becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or otherwise
(collectively, a "Payment Default"), unless and until such Payment Default has
been cured or waived or otherwise has ceased to exist. The payment of cash,
property or securities (other than Junior Securities) upon conversion of a Note
will constitute payment on a Note and therefore will be subject to the
subordination provisions in the Indenture.
Upon (i) the happening of an event of default (other than a Payment Default)
that permits, or would permit with (a) the passage of time, (b) the giving of
notice, (c) the making of any payment of the Notes then required to be made or
(d) any combination thereof (collectively, a "Non-Payment Default"), the holders
of Senior Indebtedness having a principal amount then outstanding in excess of
$10.0 million (or with respect to which Senior Indebtedness the holders are
obligated to lend in excess of $10.0 million principal amount) or their
representative immediately to accelerate its maturity and (ii) written notice of
such Non-Payment Default given to the Company and the Trustee by the holders of
an aggregate of at least $10.0 million outstanding principal amount (or
commitments to lend up to $10.0 million in Senior Indebtedness) of such Senior
Indebtedness or their representative (a "Payment Notice"), then, unless and
until such Non-Payment Default has been cured or waived or otherwise has ceased
to exist, no payment (by setoff or otherwise) may be made by or on behalf of the
Company on account of the principal of, premium, if any, interest on, or
liquidated damages with respect to, the Notes, or to acquire or repurchase any
of the Notes for cash or property, or on account of the redemption provisions of
the Notes, in any such case other than payments made with Junior Securities.
Notwithstanding the foregoing, unless (i) the Senior Indebtedness in respect of
which such Non-Payment Default exists has been declared due and payable in its
entirety within 179 days after the Payment Notice is delivered as set forth
above (the "Payment Blockage Period"), and (ii) such declaration has not been
rescinded or waived, at the end of the Payment Blockage Period, the Company
shall be required to pay all sums not paid to the Holders of the Notes during
the Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Notes. Not more than one Payment Notice
may be given in any consecutive 365-day period, irrespective of the number of
defaults with respect to Senior Indebtedness during such period. In no event,
however, may the total number of days during which any Payment Blockage Period
or Payment Blockage Periods are in effect exceed 179 days in the aggregate
during any consecutive 365-day period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders or any Paying Agent (as defined therein)
at a time when such payment or distribution is prohibited by the foregoing
provisions, such payment or distribution shall be held in trust for the benefit
of the holders of Senior Indebtedness of the Company, and shall be paid or
delivered by the Trustee or such Holders or such Paying Agent, as the case may
be, to the holders of the Senior Indebtedness of the Company remaining unpaid or
unprovided for or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness of the Company may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Senior Indebtedness
of the Company held or represented by each, for application to the payment of
all Senior Indebtedness of the Company remaining unpaid, to the extent necessary
to pay or to provide for the payment of all such Senior Indebtedness in full
after giving effect to any concurrent payment and distribution, or provision
therefor, to the holders of such Senior Indebtedness.
13
<PAGE>
Upon any distribution of assets of the Company upon any dissolution, winding
up, total or partial liquidation or reorganization of the Company, whether
voluntary or involuntary, in bankruptcy, insolvency, receivership or a similar
proceeding or upon assignment for the benefit of creditors or any marshaling of
assets or liabilities (i) the holders of all Senior Indebtedness of the Company
will first be entitled to receive payment in full (or have such payment duly
provided for) before the Holders are entitled to receive any payment on account
of the principal of, premium, if any, interest on, and liquidated damages with
respect to, the Notes (other than Junior Securities) and (ii) any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior Securities) to which the Holders or
the Trustee on behalf of the Holders would be entitled (by setoff or otherwise),
except for the subordination provisions contained in the Indenture, will be paid
by the liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of Senior Indebtedness of the Company or
their representative to the extent necessary to make payment in full of all such
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to the holders of such Senior
Indebtedness.
No provision contained in the Indenture or the Notes will affect the
obligation of the Company, which is absolute and unconditional, to pay, when
due, principal of, premium, if any, interest on, and liquidated damages with
respect, to the Notes. The subordination provisions of the Indenture and the
Notes will not prevent the occurrence of any Default or Event of Default under
the Indenture or limit the rights of the Trustee or any Holder, subject to the
preceding paragraphs, to pursue any other rights or remedies with respect to the
Notes.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any of its subsidiaries or a marshaling of assets or liabilities of the Company
and its subsidiaries, Holders of Notes may receive ratably less than other
creditors.
The Company's ability to meet its cash obligations in the future will be
dependent upon the ability of its subsidiaries to make cash distributions to the
Company. The ability of its subsidiaries to make distributions to the Company is
and will continue to be restricted by, among other limitations, applicable
provisions of state law and contractual provisions. The Indenture will not limit
the ability of the Company's subsidiaries to incur such contractual restrictions
in the future. The right of the Company to participate in the assets of any
subsidiary (and thus the ability of holders of the Notes to benefit indirectly
from such assets) is generally subject to the prior claims of creditors,
including trade creditors, of that subsidiary except to the extent that the
Company is recognized as a creditor of such subsidiary, in which case the
Company's claims would still be subject to any security interest of other
creditors of such subsidiary. The Notes, therefore, will be structurally
subordinated to creditors, including trade creditors, of subsidiaries of the
Company with respect to the assets of the subsidiaries against which such
creditors have a claim.
REDEMPTION AT THE COMPANY'S OPTION
The Notes will not be subject to redemption prior to August 1, 2000 and will
be redeemable thereafter at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice to each Holder, at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing August 1 of the years indicated below, in
each case (subject to the right of Holders of record on a Record Date to receive
interest due on an Interest Payment
14
<PAGE>
Date that is on or prior to such Redemption Date) together with accrued and
unpaid interest and liquidated damages, if any, to, but excluding, the
Redemption Date:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
2000.............................................................................. 102.857%
2001.............................................................................. 102.143
2002.............................................................................. 101.429
2003.............................................................................. 100.714
2004.............................................................................. 100.000
</TABLE>
In the case of a partial redemption, the Trustee shall select the Notes or
portions thereof for redemption on a pro rata basis, by lot or in such other
manner it deems appropriate and fair. The Notes may be redeemed in part in
multiples of $1,000 only.
The Notes will not have the benefit of any sinking fund.
Notice of any redemption will be sent, by first-class mail, at least 30 days
and not more than 60 days prior to the date fixed for redemption (the
"Redemption Date"), to the Holder of each Note to be redeemed to such Holder's
last address as then shown upon the registry books of the Registrar. The notice
of redemption must state the Redemption Date, the Redemption Price and the
amount of accrued interest and liquidated damages, if any, to be paid. Any
notice that relates to a Note to be redeemed in part only must state the portion
of the principal amount to be redeemed and must state that on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion thereof will be issued. On and after the
Redemption Date, interest will cease to accrue on the Notes or portions thereof
called for redemption, unless the Company defaults in its obligations with
respect thereto.
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control has
occurred, the Company is required to make an irrevocable and unconditional offer
to purchase (the "Repurchase Offer") all Notes on the date (the "Repurchase
Date") that is no later than 45 Business Days after the occurrence of such
Change of Control at a cash price (the "Repurchase Price") equal to 100% of the
principal amount thereof, together with accrued and unpaid interest and
liquidated damages, if any, to (but excluding) the Repurchase Date. A Holder may
accept the Repurchase Offer with respect to all or a portion of its Notes
(provided that the principal amount of such Notes must be $1,000 or an integral
multiple thereof). The Repurchase Offer shall be made within 25 Business Days
following a Change of Control and shall remain open for 20 Business Days
following its commencement except to the extent that a longer period is required
by applicable law (the "Repurchase Offer Period"). Upon expiration of the
Repurchase Offer Period, the Company shall purchase all Notes tendered in
response to the Repurchase Offer. If required by applicable law, the Repurchase
Date and the Repurchase Offer Period may be extended as so required; however, if
so extended, it shall nevertheless constitute an Event of Default if the
Repurchase Date does not occur within 60 Business Days of the Change of Control.
On or before the Repurchase Date, the Company will (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Repurchase Offer,
(ii) deposit with the Paying Agent cash sufficient to pay the Repurchase Price
(together with accrued and unpaid interest and liquidated damages, if any) of
all Notes so tendered and (iii) deliver to the Trustee the Notes so accepted,
together with an officers' certificate listing the Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to the
Holders of Notes so accepted payment in an amount equal to the Repurchase Price
(together with accrued and unpaid interest and liquidated damages, if any), and
the Trustee will promptly authenticate and mail or deliver to such Holders a new
Note or Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. Any Notes not so accepted will be
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promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Repurchase Offer on or as soon as
practicable after the Repurchase Date.
The phrase "all or substantially all" of the assets of the Company, as
included in the definition of Change of Control, is likely to be interpreted by
reference to applicable state law at the relevant time, and will be dependent on
the facts and circumstances existing at such time. As a result, there may be a
degree of uncertainty in ascertaining whether a sale or transfer of "all or
substantially all" of the assets of the Company has occurred.
The Change of Control purchase feature of the Notes may make more difficult
or discourage a takeover of the Company, and, thus, the removal of incumbent
management. The Change of Control purchase feature resulted from negotiations
between the Company and the Initial Purchasers.
The provisions of the Indenture relating to a Change of Control may not
afford the Holders protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger, spin-off or similar transaction that may
adversely affect Holders, if such transaction does not constitute a Change of
Control. Moreover, certain events with respect to the Company which may involve
an actual change of control of the Company may not constitute a Change of
Control for purposes of the Indenture.
The Company may not have sufficient financial resources available to fulfill
its obligation to repurchase the Notes upon a Change of Control or to repurchase
other debt securities of the Company or its subsidiaries providing similar
rights to the holders thereof. The right to require the Company to repurchase
Notes as a result of the occurrence of a Change of Control could create an event
of default under Senior Indebtedness as a result of which any repurchase could,
absent a waiver, be blocked by the subordination provision of the Notes. Failure
of the Company to repurchase the Notes when required would result in an Event of
Default with respect to the Notes whether or not such repurchase is permitted by
the subordination provisions. Any such default may, in turn, cause a default
under Senior Indebtedness of the Company. Moreover, the Change of Control may
cause an event of default under Senior Indebtedness of the Company. As a result,
in each case, any repurchase of the Notes could, absent a waiver, be blocked by
the subordination provisions of the Notes. See "--Subordination" above.
Except as described herein, no modification of the Indenture provisions on
repurchase at the option of any Holder of a Note upon a Change of Control that
adversely affects a Holder is permissible without the consent of the Holder of
the Note so affected. In the event of a Change of Control, if Holders of in
excess of two-thirds of the outstanding aggregate principal amount of the Notes
so determine at any time following the occurrence of such Change of Control and
before the close of business on the Business Day immediately preceding the
Repurchase Date, such event shall not be treated as a Change of Control for
purposes of the Indenture. In such event, (i) the Company shall not be required
to make the Repurchase Offer, (ii) to the extent the Repurchase Offer has
already been made, such Repurchase Offer shall be deemed revoked, and (iii) to
the extent any Notes have been tendered in response to any such revoked
Repurchase Offer, such tender shall be rescinded and the Notes so tendered shall
be promptly returned to the Holders thereof. For purposes of any such
determination by the Holders of the outstanding Notes, Notes held by the Company
or an Affiliate of the Company (including any Person that would become an
Affiliate of the Company (or its successor) as a consequence of the event or
series of events that otherwise would be treated as a Change of Control for
purposes of the Indenture) shall be disregarded.
To the extent applicable, the Company will comply with the provisions of
Rule 13e-4 or any other tender offer rules, and will file a Schedule 13E-4 or
any other schedule required under such rules, in connection with any offer by
the Company to repurchase Notes at the option of the Holders upon a Change of
Control.
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LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that the Company may not, directly or indirectly,
consolidate with or merge with or into, or sell, lease, convey or transfer all
or substantially all of its assets (on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons (other than to its wholly owned subsidiaries),
unless (i) either (a) in the case of a merger or consolidation the Company is
the surviving entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Notes and the Indenture;
and (ii) no Default or Event of Default shall exist immediately before or after
giving effect to such transaction.
Upon any consolidation or merger or any transfer of all or substantially all
of the assets of the Company in accordance with the foregoing, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the Indenture with the
same effect as if such successor corporation had been named therein as the
Company, and the Company will be released from its obligations under the
Indenture and the Notes, except as to any obligations that arise from or as a
result of such transaction.
REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee, within 15 days after it is or would have been required to file such
with the Commission, annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the Commission if the Company were subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
Commission and, in each case, together with a management's discussion and
analysis of financial condition and results of operations as such would be so
required.
EVENTS OF DEFAULT AND REMEDIES
The Indenture will define an Event of Default as (i) the failure by the
Company to pay any installment of interest on, or liquidated damages with
respect to, the Notes as and when due and payable and the continuance of any
such failure for 30 days, (ii) the failure by the Company to pay all or any part
of the principal of, or premium, if any on the Notes when and as the same become
due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, pursuant to any Repurchase Offer or otherwise,
(iii) the failure of the Company to perform any conversion of Notes required
under the Indenture and the continuance of any such failure for 30 days, (iv)
the failure by the Company to observe or perform any other covenant or agreement
contained in the Notes or the Indenture and subject to certain exceptions, the
continuance of such failure for a period of 60 days after written notice is
given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes outstanding,
(v) certain events of bankruptcy, insolvency or reorganization in respect of the
Company or any of its Significant Subsidiaries (as defined), (vi) failure of the
Company or any Significant Subsidiary to make any payment at maturity, including
any applicable grace period, in respect of Indebtedness (other than nonrecourse
obligations) in an amount in excess of $25 million and continuance of such
failure for 30 days after written notice is given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of Notes outstanding, (vii) default by the Company or any
Significant Subsidiary with respect to any Indebtedness (other than non-recourse
obligations), which default results in the acceleration of Indebtedness in an
amount in excess of $25 million without such Indebtedness having been discharged
or such
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acceleration having been rescinded or annulled for 30 days after written notice
is given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of Notes outstanding and
(viii) final unsatisfied judgments not covered by insurance aggregating in
excess of $25 million, at any one time rendered against the Company or any of
its Significant Subsidiaries and not stayed, bonded or discharged within 60
days. The Indenture will provide that if a default occurs and is continuing, the
Trustee must, within 90 days after the occurrence of such default, give to the
Holders notice of such default, but the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the best interest of the Holders, except in the case of a
default in the payment of the principal of, premium, if any, or interest on or
liquidated damages with respect to, any of the Notes when due or in the payment
of any redemption or repurchase obligation.
The Indenture will provide that if an Event of Default occurs and is
continuing (other than an Event of Default specified in clause (v) above with
respect to the Company), then in every such case, unless the principal of all of
the Notes shall have already become due and payable, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if given by
Holders) (an "Acceleration Notice"), may declare all principal and accrued
interest and liquidated damages, if any, thereon to be due and payable
immediately. If an Event of Default specified in clause (v) above with respect
to the Company occurs, all principal and accrued interest and liquidated
damages, if any, will be immediately due and payable on all outstanding Notes
without any declaration or other act on the part of the Trustee or the Holders.
The Holders of no less than a majority in aggregate principal amount of Notes
generally are authorized to rescind such acceleration if all existing Events of
Default, other than the non-payment of the principal of, premium, if any, and
interest on, and liquidated damages with respect to, the Notes that have become
due solely by such acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in principal amount of the Notes at the time outstanding
may waive on behalf of all the Holders any default, except a default in the
payment of principal of or interest on, or liquidated damages with respect to,
any Note not yet cured, or a default with respect to any covenant or provision
that cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Subject to the provisions of the Indenture relating
to the duties of the Trustee, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request, order
or direction of any of the Holders, unless such Holders have offered to the
Trustee reasonable security or indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the Notes at the time outstanding will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee.
The Indenture provides that no Holder may pursue any remedy under the
Indenture, except for a default in the payment of principal, premium, if any, or
interest or liquidated damages, if any, on the Notes, unless the Holder gives to
the Trustee written notice of a continuing Event of Default, the Holders of at
least 25% in principal amount of the outstanding Notes make a written request to
the Trustee to pursue the remedy, such Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense, the Trustee
does not comply with the request within 60 days after receipt of the request and
the offer of indemnity, and the Trustee shall not have received a contrary
direction from the Holders of a majority in principal amount of the outstanding
Notes.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Company and the Trustee to
enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. With the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company and the Trustee are permitted to amend or supplement the Indenture or
any supplemental indenture or modify the rights of the Holders; provided, that
no such modification may, without the
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consent of each Holder affected thereby: (i) change the Stated Maturity of any
Note or reduce the principal amount thereof or the rate (or extend the time for
payment) of interest thereon or any premium payable upon the redemption thereof,
or change the place of payment where, or the coin or currency in which, any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the conversion of any Note or the enforcement of any such
payment on or after the due date thereof (including, in the case of redemption,
on or after the Redemption Date), or reduce the Repurchase Price, or alter the
Repurchase Offer (other than as set forth herein) or redemption provisions in a
manner adverse to the Holders, or (ii) reduce the percentage in principal amount
of the outstanding Notes, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture, or
(iii) adversely affect the right of such Holder to convert Notes. A supplemental
indenture entered into in compliance with the "Limitation on Merger, Sale or
Consolidation" covenant would not require the consent of the Noteholders.
NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES
The Indenture provides that no stockholder, employee, officer, director or
partner, as such, past, present or future of the Company or any successor
corporation shall have any personal liability in respect of the obligations of
the Company under the Indenture or the Notes by reason of his, her or its status
as such stockholder, employee, officer, director or partner.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The Company or Trustee may require a Holder, among other things, to
furnish appropriate endorsements, legal opinions and transfer documents, and to
pay any taxes and fees required by law or permitted by the Indenture. The
Company is not required to transfer or exchange any Notes selected for
redemption. Also, the Company is not required to transfer or exchange any Notes
for a period of 15 days before the mailing of a Repurchase Offer or notice of
redemption.
The registered holder of a Note may be treated as the owner of it for all
purposes.
BOOK ENTRY, DELIVERY AND FORM
Notes that were initially held by "qualified institutional buyers," as
defined in Rule 144A under the Securities Act ("QIBs"), and Notes that were
initially held by institutional "accredited investors" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, were evidenced by one or
more global Notes (the "U.S. Global Note"), which has been deposited on the
Closing Date with, or on behalf of, The Depository Trust Company, New York, New
York (the "Depositary") and registered in the name of Cede & Co. ("Cede") as the
Depositary's nominee. Notes held by persons who acquired such Notes in
compliance with Regulation S under the Securities Act (a "Non-U.S. Person") were
initially evidenced by one or more global Notes (the "Regulation S Global
Note"), which will be deposited on the Closing Date with, or on behalf of, the
Depositary and registered in the name of Cede as the Depositary's nominee, for
the accounts of the Euroclear System ("Euroclear") and Cedel, S.A. ("Cedel").
Beneficial interests in the Regulation S Global Note may only be held through
Euroclear or Cedel, and any resale or transfer of such interests to U.S. persons
shall only be permitted as described below. The U.S. Global Note and the
Regulation S Global Note are hereinafter collectively referred to as the "Global
Note." Except as set forth below, the Global Note may be transferred, in whole
or in part, only to another nominee of the Depositary or to a successor of the
Depositary or its nominee.
QIBs and institutional "accredited investors" may hold their interests in
the U.S. Global Note directly through the Depositary if such holder is a
participant in the Depositary, or indirectly through organizations which are
participants in the Depositary (the "Participants"). Transfers between
Participants will be effected in the ordinary way in accordance with the
Depositary's rules and will be settled in Federal funds.
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Non-U.S. Persons may hold their interest in the Regulation S Global Note
directly through Cedel or Euroclear, or indirectly through organizations that
are participants in Cedel or Euroclear. Cedel and Euroclear will hold interests
in the Regulation S Global Note on behalf of their participants through the
Depositary. Transfers between participants in Euroclear and Cedel will be
effected in the ordinary way in accordance with their respective rules and
operating procedures.
The Depositary has advised the Company that it is a limited-purpose trust
company that was created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants (including
Euroclear and Cedel). The Depositary's Participants include securities brokers
and dealers (including the Initial Purchasers), banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's system is also available to other entities such as banks, brokers,
dealers and trust companies (collectively, "Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. QIBs and institutional "accredited investors" may elect to hold
Notes purchased by them through the Depositary. QIBs and institutional
"accredited investors" who are not Participants may beneficially own securities
held by or on behalf of the Depositary only through Participants or Indirect
Participants.
The Company expects that pursuant to procedures established by the
Depositary, (i) upon deposit of the Global Note, the Depositary will credit the
accounts of Participants designated by the Initial Purchasers with an interest
in the Global Note and (ii) ownership of the Notes evidenced by the Global Note
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by the Depositary (with respect to the interests of
Participants), the Participants and the Indirect Participants. The laws of some
states require that certain persons take physical delivery in definitive form of
securities that they own and that security interests in negotiable instruments
can only be perfected by delivery of certificates representing the instruments.
Consequently, the ability to transfer Notes evidenced by the Global Note will be
limited to such extent.
So long as the Depositary or its nominee is the registered owner of a Note,
the Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by the Global Note for all purposes
under the Indenture. Except as provided below, owners of beneficial interests in
a Global Note will not be entitled to have Notes represented by such Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of Certificated Notes, and will not be considered the owners or holders
thereof under the Indenture for any purpose, including with respect to the
giving of any directions, instructions or approvals to the Trustee thereunder.
As a result, the ability of a person having a beneficial interest in Notes
represented by a Global Note to pledge such interest to persons or entities that
do not participate in the Depositary's system, or to otherwise take actions with
respect to such interest, may be affected by the lack of a physical certificate
evidencing such interest.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of Notes by the Depositary, or for maintaining, supervising or reviewing any
records of the Depositary relating to such Notes.
Payments with respect to the principal of, premium, if any, interest on, and
liquidated damages with respect to, any Note represented by a Global Note
registered in the name of the Depositary or its nominee on the applicable record
date will be payable by the Trustee to or at the direction of the Depositary or
its nominee in its capacity as the registered Holder of the Global Note
representing such Notes under the Indenture. Under the terms of the Indenture,
the Company and the Trustee may treat the persons in whose names the Notes,
including the Global Notes, are registered as the owners thereof for the purpose
of receiving such payments and for any and all other purposes whatsoever.
Consequently, neither the Company nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to beneficial owners
of Notes (including, principal, premium, if any, interest, or liquidated damages
with respect thereto), or to immediately credit the accounts of the relevant
Participants with such payment, in
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amounts proportionate to their respective holdings in principal amount of
beneficial interests in the Global Note as shown on the records of the
Depositary. Payments by the Participants and the Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practice and will be the responsibility of the Participants or the
Indirect Participants.
Holders who desire to convert their Notes into Common Stock pursuant to the
terms of the Notes should contact their brokers or other Participants or
Indirect Participants to obtain information on procedures, including proper
forms and cut-off times, for submitting such requests.
If (i) the Company notifies the Trustee in writing that the Depositary is no
longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
definitive form under the Indenture, then, upon surrender by the Depositary of
the Global Note, Certificated Notes will be issued to each person that the
Depositary identifies as the beneficial owner of the Notes represented by the
Global Note. In addition, subject to certain conditions, any person having a
beneficial interest in a Global Note may, upon request to the Trustee, exchange
such beneficial interest for Notes in the form of Certificated Notes. Upon any
such issuance, the Trustee is required to register such Certificated Notes in
the name of such person or persons (or the nominee of any thereof), and cause
the same to be delivered thereto.
Neither the Company nor the Trustee shall be liable for any delay by the
Depositary or any Participant or Indirect Participant in identifying the
beneficial owners of the Notes, and the Company and the Trustee may conclusively
rely on, and shall be protected in relying on, instructions from the Depositary
for all purposes (including with respect to the registration and delivery, and
the respective principal amounts, of the Notes to be issued).
REGISTRATION RIGHTS
The Company and the Initial Purchasers entered into the Registration Rights
Agreement on the Closing Date. Pursuant to the Registration Rights Agreement,
the Company agreed to file with the Commission as promptly as practicable after
the Closing Date a shelf registration statement under the Securities Act (the
"Shelf Registration Statement") on Form S-1, Form S-2 or Form S-3, as determined
by the Company, if the use of such form is then available, to cover resales of
Transfer Restricted Securities by the holders thereof. The Company has agreed to
use all reasonable efforts to cause the applicable registration statement to be
declared effective by the Commission as soon as practicable after the date of
filing and to keep the Shelf Registration Statement effective until the earlier
of such date that is two years after the Closing Date or until the Shelf
Registration Statement is no longer required for resales of the Notes or the
Common Stock. For purposes of the foregoing, "Transfer Restricted Securities"
means each Note and share of Common Stock issued upon conversion thereof until
the date on which such Note or share of Common Stock has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or the date on which such Note or share of Common Stock
is distributed to the public pursuant to Rule 144 under the Securities Act or is
salable pursuant to Rule 144(k) under the Securities Act (or any similar
provisions then in force).
GOVERNING LAW
The Indenture and the Notes provide that they are to be governed in
accordance with the laws of the State of New York.
THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee, in
the event it becomes a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in
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other transactions; provided, however, that if it acquires any conflicting
interest (as defined), it must eliminate such conflict or resign.
In case an Event of Default shall occur (and shall not be cured), the
Trustee will be required to use the degree of care of a prudent person in the
conduct of his own affairs in the exercise of its powers. Subject to such
provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the Holders of
Notes, unless they shall have offered to the Trustee reasonable security or
indemnity.
CERTAIN DEFINITIONS
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person is a
party that is required to be classified and accounted for as a capital lease
obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Change of Control" means (i) an event or series of events as a result of
which any "person" or group, (as such terms are used in Sections 13(d)(3) and
14(d) of the Exchange Act) (excluding the Company or any wholly-owned subsidiary
thereof) is or becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable) of more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of the Company or any successor entity
("Voting Stock"), (ii) the completion of any consolidation with or merger of the
Company into any other Person, or sale, conveyance, transfer or lease by the
Company of all or substantially all of its assets to any Person, or any merger
of any other Person into the Company in a single transaction or series of
related transactions, and, in the case of any such transaction or series of
related transactions, the outstanding Common Stock of the Company is changed or
exchanged, 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 Person resulting from such transaction in substantially the
same proportion as their ownership of the Voting Stock immediately before such
transaction, or (iii) such time as the Continuing Directors (as defined) 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 (x) the last sale price
of the Common Stock for any five trading days during the 10 trading days
immediately preceding the Change of Control is at least equal to 105% of the
Conversion Price in effect on such day, or (y) with respect to a merger or
consolidation otherwise constituting a Change of Control described in clause
(ii) above, at least 90% of the consideration in such transaction or
transactions consists of common stock or securities convertible into common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for quotation on the Nasdaq National Market.
"Continuing Director" means at any date a member of the Company's Board of
Directors (i) who was a member of such board on the date of initial issuance of
the Notes or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Company's Board of Directors was recommended
or endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
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"Disqualified Capital Stock" means, with respect to the Company, Capital
Stock of the Company that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased (including at the option of the holder thereof) by the Company, in
whole or in part, on or prior to the Stated Maturity of the Notes, provided that
only the portion of such Capital Stock which is so convertible, exercisable,
exchangeable or redeemable or subject to repurchase prior to such Stated
Maturity shall be deemed to be Disqualified Capital Stock.
"Indebtedness" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of any such person, (i) in respect of
borrowed money (whether or not the lender has recourse to all or any portion of
the assets of such person), (ii) evidenced by credit or loan agreements, bonds,
notes, debentures or similar instruments (including, without limitation, notes
or similar instruments given in connection with the acquisition of any business,
properties or assets of any kind), (iii) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (iv) for the payment of money
relating to a Capitalized Lease Obligation, or (v) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (b) all obligations of such person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (c) all net
obligations of such person under Interest Swap and Hedging Obligations; (d) all
liabilities of others of the kind described in the preceding clauses (a), (b) or
(c) that such person has guaranteed or that is otherwise its legal liability, or
which is secured by a lien on property of such person, and all obligations to
purchase, redeem or acquire any Capital Stock; and (e) any and all deferrals,
renewals, extensions, modifications, replacements, restatements, refinancings
and refundings (whether direct or indirect) of, or any indebtedness or
obligation issued in exchange for, any liability of the kind described in any of
the preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
"Interest Swap and Hedging Obligations" means the obligations of any Person
under any interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement or other interest rate hedge agreement, interest rate collar agreement
or other similar agreement or arrangement to which such Person is a party or
beneficiary.
"Junior Securities" means any Qualified Capital Stock (as defined) and any
Indebtedness of the Company that is fully subordinated in right of payment to
the Notes and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Notes.
"Qualified Capital Stock" means any Capital Stock of the Company that is not
Disqualified Capital Stock.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company, unless the instrument creating or evidencing such Indebtedness provides
that such Indebtedness is not senior or superior in right of payment to the
Notes or which is pari passu with, or subordinated to, the Notes; provided that
in no event shall Senior Indebtedness include (a) Indebtedness of the Company
owed or owing to any Subsidiary of the Company or any officer, director or
employee of the Company or any Subsidiary of the Company, (b) Indebtedness
representing or with respect to any account payable or other accrued current
liability or obligation incurred in the ordinary course of business in
connection with the obtaining of materials or services, (c) any liability for
taxes owed or owing by the Company or any
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Subsidiary of the Company or (d) Indebtedness of the Company under the Edgewood
Notes (as defined herein).
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1.02(w) of Regulation S-X
promulgated by the Commission as in effect as of the date of the Indenture.
"Stated Maturity" when used with respect to any Note means August 1, 2004.
"Subsidiary" with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one or
more Subsidiaries of such person, (ii) a partnership in which such person or a
Subsidiary of such person is, at the time, a general partner and owns alone or
together with one or more Subsidiaries of such person a majority of the
partnership interests, or (iii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof, has at least a majority ownership interest.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 200,000,000 shares
of Common Stock, $.01 par value per share, of which 22,868,872 shares were
issued and outstanding as of October 1, 1997 and 5,000,000 shares of preferred
stock, $1.00 par value per share, of which no shares are issued or outstanding.
The following description of the capital stock of the Company and certain
provisions of the Company's Amended and Restated Certificate of Incorporation
and By-laws is a summary of all material terms of the Company's capital stock
and is qualified in its entirety by the provisions of the Amended and Restated
Certificate of Incorporation and By-laws, copies of which have been filed as
exhibits to the Registration Statement, of which this Prospectus forms a part.
As of October 1, 1997, the Common Stock was held of record by 559 stockholders.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The Amended and Restated
Certificate of Incorporation does not provide for cumulative voting for the
election of directors. Holders of Common Stock will be entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available therefor, and will be entitled
to receive, pro rata, all assets of the Company available for distribution to
such holders upon liquidation. Holders of Common Stock have no preemptive,
subscription or redemption rights. All outstanding shares of Common Stock are,
and the Common Stock issuable upon the conversion of the Notes, upon such
issuance will be fully paid and nonassessable.
As of October 1, 1997, the Company had reserved for issuance (i) 1,992,408
shares of Common Stock under the Company's stock option plans and employee stock
discount purchase plans, of which options to purchase 432,850 shares were
outstanding; (ii) 102,984 shares issuable upon the exercise of options issued in
connection with the acquisition of Edgewood; (iii) 402,743 shares issuable upon
the conversion of convertible subordinated notes issued in connection with the
acquisition of Edgewood (the "Edgewood Notes"); and (iv) 200,000 shares issuable
upon the exercise of outstanding warrants issued to MascoTech in connection with
the MSTI Acquisition.
PREFERRED STOCK
Pursuant to the Amended and Restated Certificate of Incorporation, the
Company will be authorized to issue "blank check" Preferred Stock, which may be
issued from time to time in one or more series upon authorization by the
Company's Board of Directors. The Board of Directors, without further approval
of the stockholders, will be authorized to fix the dividend rights and terms,
conversion rights, voting rights, redemption rights and terms, liquidation
preferences, and any other rights, preferences, privileges and restrictions
applicable to each series of the Preferred Stock. The issuance of Preferred
Stock, while providing flexibility in connection with possible acquisitions and
other corporate purposes could, among other things, adversely affect the voting
power of the holders of Common Stock and, under certain circumstances, make it
more difficult for a third party to gain control of the Company, discourage bids
for the Company's Common Stock at a premium or otherwise adversely affect the
market price of the Common Stock.
SECTION 203 OF DELAWARE CORPORATION LAW
The Company is subject to the "business combination" statute of the Delaware
General Corporation Law. In general, such statute prohibits a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any "interested stockholder" for a period of three years after
the date of the transaction in which the person became an "interested
stockholder," unless (i) the transaction
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is approved by the Board of Directors prior to the date the interested
stockholder obtained such status, (ii) upon consummation of the transaction
which resulted in the stockholder becoming an "interested stockholder," the
"interested stockholder" owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding those shares owned by
(a) persons who are directors and also officers and (b) employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (iii) on or subsequent to such date the "business combination" is
approved by the board of directors and authorized at an annual or special
meeting of the stockholders by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the "interested stockholder." A
"business combination" includes mergers, asset sales and other transactions
resulting in financial benefit to a stockholder. An "interested stockholder" is
a person who, together with affiliates and associates, owns (or within three
years, did own) 15% or more of a corporation's voting stock. The statute could
prohibit or delay mergers or other takeover or change in control attempts with
respect to the Company and, accordingly, may discourage attempts to acquire the
Company.
TRANSFER AGENT
First Chicago Trust Company of New York is the transfer agent for the Common
Stock.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material United States federal income
and estate tax considerations relating to the purchase, ownership and
disposition of the Notes and of Common Stock into which Notes may be converted,
but does not purport to be a complete analysis of all the potential tax
considerations relating thereto. This summary is based on the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
Regulations promulgated or proposed thereunder ("Treasury Regulations"),
judicial authority and current administrative rulings and practice, all of which
are subject to change, possibly on a retroactive basis. This summary deals only
with holders that will hold Notes and Common Stock into which Notes may be
converted as "capital assets" (within the meaning of Section 1221). This summary
does not purport to deal with all aspects of U.S. federal income taxation that
might be relevant to particular holders in light of their personal investment
circumstances or status, nor does it address tax considerations applicable to
investors that may be subject to special tax rules, such as certain financial
institutions, tax-exempt organizations, insurance companies, dealers in
securities or currencies, persons that will hold Notes as a position in a
hedging transaction, "straddle" or "conversion transaction" for tax purposes, or
persons that have a "functional currency" other than the U.S. dollar. Moreover,
the effect of any applicable state, local or foreign tax laws is not discussed.
The Company has not sought any ruling from the Internal Revenue Service with
respect to the statements made and the conclusions reached in the following
summary, and there can be no assurance that the Internal Revenue Service will
agree with such statements and conclusions. THE FOLLOWING DISCUSSION IS FOR
GENERAL INFORMATION ONLY. INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED
STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL
AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN
TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means the beneficial owner
of a Note or Common Stock that for United States federal income tax purposes is
(i) a citizen or resident of the United States, (ii) treated as a domestic
corporation or domestic partnership, or (iii) an estate or trust that is subject
to United States federal income taxation on a net income basis in respect of the
Notes or Common Stock. A
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trust will be a "United States Holder" of a Note only if the trust is subject to
the supervision of a court within the United States and the control of a United
States fiduciary as described in Section 7701 (a) (30) of the Code.
PAYMENT OF INTEREST
Interest on a Note generally will be included in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such Holder's method of accounting for United States
federal income tax purposes. The Notes will not have original issue discount.
LIQUIDATED DAMAGES
In the event a registration statement is not filed or does not become
effective as provided in the Registration Rights Agreement, the Company will be
required to pay liquidated damages to certain United States Holders of the Notes
and Common Stock. Under the Treasury Regulations regarding contingent payment
debt instruments, any payment subject to a remote or incidental contingency
(i.e., there is a remote likelihood that the payment will be required or the
potential amount of the payment is insignificant relative to the remaining
payments on the debt instrument) is not considered a contingent payment and is
ignored for purposes of computing original issue discount accruals. The Company
believes that the liquidated damage payments with respect to the Notes are
subject to either a remote or incidental contingency. Accordingly, a United
States Holder of a Note should be required to report any liquidated damage
payment as interest for United States federal income tax purposes only at the
time such payment is made or properly accrued under the United States Holder's
method of accounting, if such liquidated payment is insignificant relative to
the total expected amount of the remaining payments on the Note. If such
liquidated damage payment were significant relative to such remaining payments,
solely for purposes of the rules regarding original issue discount, such Note
would be treated as retired and then re-issued on the date of any such payment
for an amount equal to the adjusted issue prior of such Note on such date. The
Company's position that the liquidated damage payments are subject to a remote
or incidental contingency is binding on all holders unless the holder discloses
its differing position in a statement attached to its federal income tax return
for the taxable year during which the Note was acquired.
AMORTIZABLE BOND PREMIUM
If a United States Holder of a Note acquires the Note at a cost that is in
excess of the amount payable at maturity (after reducing such costs by an amount
equal to the value of the conversion option), the United States Holder may elect
under Section 171 of the Code to amortize the excess cost (as an offset to
interest income) on a constant interest rate basis over the term of such Note.
However, because the Notes may be redeemed at the option of the Company at a
price in excess of their principal amount, a United States holder may be
required to amortize any bond premium based on the earlier call date and the
call price payable at that time. If the United States Holder makes an election
to amortize bond premium, the tax basis of all such United States Holder's Notes
will be reduced by the allowable bond premium amortization. The amortization
election would apply to all debt instruments held or subsequently acquired by
the electing purchaser and cannot be revoked without permission from the
Service. On conversion of a Note into shares of Common Stock, no additional
amortization of any bond premium would be allowed, and any remaining premium
would be added to the United States Holder's basis in the Common Stock received.
MARKET DISCOUNT
Investors acquiring Notes pursuant to this Offering Memorandum should
consider that the resale of those Notes may be adversely affected by the market
discount provisions of Sections 1276 through 1278 of the Code. Except as
described below, gain recognized on the disposition of a Note that has accrued
market discount will be treated as ordinary income, and not capital gain, to the
extent of the accrued market
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discount. "Market discount" is defined generally as the excess, if any, of (i)
the principal amount of the Note over (ii) the tax basis of the Note in the
hands of the United States Holder immediately after its acquisition.
Under a DE MINIMIS exception, there is no market discount if the excess of
the principal amount of the obligation over the United States Holder's tax basis
in the obligation is less than 0.25% of the principal amount multiplied by the
number of complete years after the acquisition date to the obligation's date of
maturity. Unless the United States Holder elects to accrue market discount on a
constant yield basis, the accrued market discount generally would be the amount
calculated by multiplying the market discount by a fraction, the numerator of
which is the number of days the obligation has been held by the United States
Holder and the denominator of which is the number of days after the United
States Holder's acquisition of the obligation up to and including its maturity
date.
If a United States Holder of a Note acquired with market discount disposes
of such Note in any transaction other than a sale, exchange or involuntary
conversion, such United States Holder will be deemed to have realized an amount
equal to the fair market value of the Note and will be required to recognize as
ordinary income any accrued market discount. See the discussion below under
"--Sale, Exchange or Redemption of the Notes" for the tax consequences of a sale
or exchange. A partial principal payment (if any) on a Note will be includable
as ordinary income upon receipt to the extent of any accrued market discount
thereon. Although it is not free from doubt, any accrued market discount not
previously taken into income prior to a conversion of a Note into shares of
Common Stock should carry over to the Common Stock received on conversion and be
treated as ordinary income upon a subsequent disposition of such Common Stock,
to the extent of any gain recognized on such disposition. A United States Holder
of a Note acquired at a market discount also may be required to defer the
deduction of all or a portion of the interest on any indebtedness incurred or
maintained to purchase or carry the Note until the maturity of the Note or the
earlier disposition of the Note in a taxable transaction.
A United States Holder of a Note acquired at a market discount may elect to
include the market discount in income as it accrues (on either a straight-line
basis or a constant yield basis). This election would apply to all market
discount obligations as acquired by the electing United States Holder on or
after the first day of the first year to which the election applies. The
election may be revoked only with the consent of the Service. If a United States
Holder of a Note elects to include market discount in income currently, the
rules discussed above regarding (i) ordinary income recognition resulting from a
sale and certain other disposition transactions and (ii) deferral of interest
deductions would not apply.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, subject to the market
discount rules discussed above, a United States Holder generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash
proceeds and the fair market value of any property received on the sale,
exchange or redemption (except to the extent such amount is attributable to
accrued and unpaid interest not previously recognized by such Holder, which is
taxable as ordinary income) and (ii) such Holder's adjusted tax basis in the
Note. A United States Holder's adjusted tax basis in a Note generally will equal
the cost of the Note to such Holder, less any principal payments received by
such Holder and increased by any market discount previously included in income
by such Holder. Such capital gain or loss will be long-term capital gain or loss
if the United States Holder's holding period in the Note is more than one year
at the time of sale, exchange or redemption.
CONVERSION OF THE NOTES
A United States Holder generally will not recognize any income, gain or loss
upon conversion of a Note into Common Stock, except with respect to cash
received in lieu of a fractional share of Common Stock. Such Holder's tax basis
in the Common Stock received on conversion of a Note will be the same as
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such Holder's adjusted tax basis in the Note at the time of conversion (reduced
by any basis allocable to a fractional share interest), and the holding period
for the Common Stock received on conversion will generally include the holding
period of the Note converted.
Cash received in lieu of a fractional share of Common Stock upon conversion
should be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common
Stock generally should result in capital gain or loss (measured by the
difference between the cash received for the fractional share and the United
States Holder's adjusted tax basis in the fractional share).
DIVIDENDS ON THE COMMON STOCK
The amount of any distribution by the Company in respect of the Common Stock
(including any liquidated damages in respect of Common Stock as described above
under "Description of Notes-- Registration Rights") will be equal to the amount
of cash and the fair market value, on the date of distribution, of any property
distributed. Generally, distributions will be treated as a dividend, subject to
a tax as ordinary income, to the extent of the Company's current or accumulated
earnings and profits, then as a tax-free return of capital to the extent of the
Holder's tax basis in the Common Stock and thereafter as gain from the sale or
exchange of such stock.
In general, a dividend distribution to a corporate United States Holder will
qualify for the 70% dividends received deduction if the Holder owns less than
20% of the voting power and value of the Company's stock (other than any
non-voting, non-convertible, non-participating preferred stock). A corporate
United States Holder that owns 20% or more of the voting power and value of the
Company's stock (other than any nonvoting, non-convertible, non-participating
preferred stock) generally will qualify for an 80% dividends received deduction.
The dividends received deduction is subject, however, to certain holding period,
taxable income and other limitations.
If at any time (i) the Company makes a distribution of cash or property to
its stockholders or purchases Common Stock and such distribution or purchase
would be taxable to such stockholders as a dividend for United States federal
income tax purposes (E.G., distributions of evidences of indebtedness or assets
of the Company, but generally not stock dividends or rights to subscribe for
Common Stock) and, pursuant to the antidilution provisions of the Indenture, the
conversion price of the Notes is decreased, or (ii) the conversion price of the
Notes is decreased at the discretion of the Company, such decrease in conversion
price may be deemed to be the payment of a taxable dividend to United States
Holders of Notes (pursuant to Section 305 of the Code) to the extent of the
Company's current or accumulated earnings and profits. Such Holders of Notes
could therefore have taxable income as a result of an event pursuant to which
they received no cash or property.
SALE OF COMMON STOCK
Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash and the fair market value of any property received upon the sale
or exchange and (ii) such Holder's adjusted tax basis in the Common Stock. Such
capital gain or loss will be long-term if the United States Holder's holding
period in the Common Stock is more than one year at the time of the sale or
exchange. A United States Holder's basis and holding period in Common Stock
received upon conversion of a Note are determined as discussed above under
"--Conversion of the Notes."
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, certain information is required to be reported by the payor to
the IRS with respect to payments of principal, premium, if any, and interest on
a Note (including the payment of liquidated damages under the Registration
Rights Agreement), payments of dividends on Common Stock, payments
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of the proceeds of the sale of a Note and payments of the proceeds of the sale
of Common Stock to certain noncorporate United States Holders. The payor will be
required to withhold backup withholding tax at the rate of 31% if (a) the payee
fails to furnish a taxpayer identification number ("TIN") to the payor or
establish an exemption from backup withholding, (b) the IRS notifies the payor
that the TIN furnished by the payee is incorrect, (c) there has been a notified
payee underreporting with respect to interest, dividends or original issue
discount described in Section 3406(c) of the Code or (d) there has been a
failure of the payee to certify under the penalty of perjury that the payee is
not subject to backup withholding under the Code. Any amounts withheld under the
backup withholding rules from a payment to a United States Holder will be
allowed as a credit against such Holder's United States federal income tax and
may entitle the Holder to a refund, provided that the required information is
furnished to the IRS.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any beneficial
owner of a Note or Common Stock that is not a United States Holder.
PAYMENT OF INTEREST
Generally, interest income of a Non-United States Holder that is not
effectively connected with a United States trade or business will be subject to
a withholding tax at a 30% rate (or, if applicable, a lower treaty rate).
However, interest paid on a Note by the Company or any Paying Agent to a Non-
United States Holder will qualify for the "portfolio interest exemption" and
therefore, subject to the discussion of backup withholding below, will not be
subject to United States federal income tax or withholding tax, provided that
such interest income is not effectively connected with a United States trade or
business of the Non-United States Holder and provided that the Non-United States
Holder (i) does not actually or constructively own (pursuant to the conversion
feature of the Notes or otherwise) 10% or more of the combined voting power of
all classes of stock of the Company entitled to vote, (ii) is not a controlled
foreign corporation related to the Company actually or constructively through
stock ownership, (iii) is not a bank which acquired the Notes in consideration
for an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of business and (iv) either (a) provides a Form W-8 (or a
suitable substitute form) signed under penalties of perjury that includes its
name and address and certifies as to its non-United States status in compliance
with applicable law and regulations, or (b) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business holds the Note and provides a statement
to the Company or its agent under penalties of perjury in which it certifies
that such a Form W-8 (or a suitable substitute) has been received by it from the
Non-United States Holder or qualifying intermediary and furnishes the Company or
its agent with a copy thereof.
Proposed Treasury Regulations would provide alternative methods for
satisfying the certification requirement described in clause (iv) above. The
proposed Treasury Regulations also would require, in the case of Notes held by a
foreign partnership, that (i) the certification described in clause (iv) above
be provided by the partners rather than by the foreign partnership and (ii) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of tiered
partnerships. The proposed Treasury Regulations are proposed to be effective for
payments made after December 31, 1997. There can be no assurance that the
proposed Treasury Regulations will be adopted or as to the provisions that they
will include if and when adopted in temporary or final form.
Except to the extent that an applicable treaty otherwise provides, a
Non-United States Holder generally will be taxed in the same manner as a United
States Holder with respect to interest if the interest income is effectively
connected with a United States trade or business of the Non-United States
Holder. Effectively connected interest received by a corporate Non-United States
Holder may also, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate (or, if applicable, a lower
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treaty rate). Even though such effectively connected interest is subject to
income tax, and may be subject to the branch profits tax, it is not subject to
withholding tax if the Holder delivers a properly executed IRS Form 4224 to the
payor.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
A Non-United States Holder of a Note will generally not be subject to United
States federal income tax or withholding tax on any gain realized on the sale,
exchange or redemption of the Note (including the receipt of cash in lieu of
fractional shares upon conversion of a Note into Common Stock but not including
any amount representing interest or accrued market discount) unless (1) the gain
is effectively connected with a United States trade or business of the
Non-United States Holder, (2) in the case of a Non-United States Holder who is
an individual, such Holder is present in the United States for a period or
periods aggregating 183 days or more during the taxable year of the disposition
and certain other requirements are met, or (3) the Holder is subject to tax
pursuant to the provisions of the Code applicable to certain United States
expatriates.
CONVERSION OF THE NOTES
In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of a Note into Common Stock by a Non-United States
Holder except with respect to the receipt of cash in lieu of fractional shares
by Non-United States Holders upon conversion of a Note where any of the
conditions described above under "Non-United States Holders--Sale, Exchange or
Redemption of the Notes" is satisfied.
SALE OR EXCHANGE OF COMMON STOCK
Subject to the discussion below under "FIRPTA Treatment of Non-United States
Holders," a Non-United States Holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of Common
Stock unless any of the conditions described above under "Non-United States
Holders--Sale, Exchange or Redemption of the Notes" is satisfied.
FIRPTA TREATMENT OF NON-UNITED STATES HOLDERS
Under the Foreign Investment in Real Property Tax Act of 1980, as amended
("FIRPTA"), foreign persons generally are subject to United States federal
income tax on capital gain realized on the disposition of any interest (other
than solely as a creditor) in a corporation that is a United States real
property holding corporation (a "USRPHC"). For this purpose, a foreign person is
defined as any holder who is a foreign corporation (other than certain foreign
corporations that elect to be treated as domestic corporations), a non-resident
alien individual, a non-resident fiduciary of a foreign estate or trust, or a
foreign partnership. Under FIRPTA, a corporation is a USRPHC if the fair market
value of the United States real property interests held by the corporation is 50
percent or more of the aggregate fair market value of certain assets of the
corporation.
The Company does not currently believe that it is a USRPHC. Thus, a foreign
person that holds shares of the Common Stock of the Company generally will not
be subject to the U.S. federal income tax on a sale or other disposition of the
shares of Common Stock. Even if a corporation meets the test for a USRPHC, a
foreign person would generally not be subject to tax, or withholding in respect
to such tax, on gain from a sale or other disposition of such corporation's
stock solely by reason of the corporation's USRPHC status if the stock is
regularly traded on an established securities market ("regularly traded") during
the calendar year in which such sale or disposition occurs, provided that such
holder does not own, actually or constructively, stock with a fair market value
in excess of 5 percent of the fair market value of all such stock outstanding at
any time during the shorter of the five-year period preceding such disposition
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or the holder's holding period. The Company believes that the Common Stock will
be treated as regularly traded.
DIVIDENDS
Distributions by the Company with respect to the Common Stock that are
treated as dividends paid (or deemed paid), as described above under "United
States Holders--Dividends" to a Non-United States Holder (excluding dividends
that are effectively connected with the conduct of a trade or business in the
United States by such Holder and are taxable as described below) will be subject
to United States federal withholding tax at a 30% rate (or lower rate provided
under any applicable income tax treaty). Except to the extent that an applicable
tax treaty otherwise provides, a Non-United States Holder will be taxed in the
same manner as a United States Holder on dividends paid (or deemed paid) that
are effectively connected with the conduct of a trade or business in the United
States by the Non-United States Holder. If such Non-United States Holder is a
foreign corporation, it may also be subject to a United States branch profits
tax on such effectively connected income at a 30% rate or such lower rate as may
be specified by an applicable income tax treaty. Even though such effectively
connected dividends are subject to income tax, and may be subject to the branch
profits tax, they will not be subject to U.S. withholding tax if the Holder
delivers IRS Form 4224 to the payor.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of the
Treasury Regulations, for purposes of determining the applicability of a tax
treaty rate. Under Treasury Regulations that are proposed to be effective for
distributions after 1997, however, a non-U.S. holder of Common Stock who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements. In addition, under the proposed
Treasury Regulations, in the case of common stock held by a foreign partnership,
the certification requirement would generally be applied to the partners of the
partnership and the partnership would be required to provide certain
information, including a United States taxpayer identification number. The
proposed Treasury Regulations also provide look-through rules for tiered
partnerships. It is not certain whether, or in what form, the proposed Treasury
Regulations will be adopted as final regulations.
DEATH OF A NON-UNITED STATES HOLDER
A Note held by an individual who is a Non-United States Holder at the time
of his or her death will not be includable in the decedent's gross estate for
United States estate tax purposes, provided that such Holder or beneficial owner
did not at the time of death actually or constructively own 10% or more of the
combined voting power of all classes of stock of the Company entitled to vote,
and provided that, at the time of death, payments with respect to such Notes
would not have been effectively connected with the conduct by such Non-United
States Holder of a trade or business within the United States.
Common Stock actually or beneficially held (other than through a foreign
corporation) by a Non-United States Holder at the time of his or her death (or
previously transferred subject to certain retained rights or powers) will be
subject to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
United States information reporting requirements and backup withholding tax
will not apply to payments on a Note to a Non-United States Holder if the
statement described in "Non-United States Holders Payment of Interest" is duly
provided by such Holder, provided that the payor does not have actual knowledge
that the Holder is a United States person.
32
<PAGE>
Information reporting requirements and backup withholding tax will not apply
to any payment of the proceeds of the sale of a Note or any payment of the
proceeds of the sale of Common Stock effected outside the United States by a
foreign office of a "broker" (as defined in applicable Treasury Regulations),
unless such broker is (i) a United States person, (ii) a foreign person that
derives 50% of more of its gross income for certain periods from activities that
are effectively connected with the conduct of a trade or business in the United
States or (iii) a controlled foreign corporation for United States federal
income tax purposes. Payment of the proceeds of any such sale effected outside
the United States by a foreign office of any broker that is described in (i),
(ii) or (iii) of the preceding sentence will not be subject to backup
withholding tax, but will be subject to information reporting requirements
unless such broker has documentary evidence in its records that the beneficial
owner is a Non-United States Holder and certain other conditions are met, or the
beneficial owner otherwise establishes an exemption. Payment of the proceeds of
any such sale to or through the United States office of a broker is subject to
information reporting and backup withholding requirements, unless the beneficial
owner of the Note provides the statement described in "Non-United States
Holders--Payment of Interest" or otherwise establishes an exemption.
If paid to an address outside the United States, dividends on Common Stock
held by a Non-United States Holder will generally not be subject to the
information reporting and backup withholding requirements described in this
section, provided that the payor does not have actual knowledge that the Holder
is a United States person. However, under the proposed Treasury Regulations,
dividend payments will be subject to information reporting and backup
withholding unless applicable certification requirements are satisfied. See the
discussion above with respect to rules applicable to foreign partnerships under
the proposed Treasury Regulations.
THE COMPANY
Under Section 279 of the Code, interest paid or incurred by a corporation
with respect to certain convertible, subordinated indebtedness that is utilized
to provide consideration for the acquisition of stock in another corporation (or
a substantial portion of the assets of another corporation) is not deductible
for federal income tax purposes to the extent interest on such "corporate
acquisition indebtedness" as defined in Section 279 exceeds $5 million per year,
reduced by the interest paid on certain other indebtedness that does not
constitute "corporate acquisition indebtedness" for purposes of Section 279, but
is used to fund corporate acquisitions. The Notes may constitute "corporate
acquisition indebtedness" for purposes of Section 279 of the Code, which could
result in all or a portion of the interest payments under the Notes not being
deductible for federal income tax purposes. Although there can be no assurance,
the Company does not anticipate that any significant portion of the interest
deductions with respect to the Notes will be disallowed pursuant to Section 279.
33
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth (i) the name of each Selling Securityholder;
(ii) the amount of Notes owned by each Selling Securityholder as of October 1,
1997 (unless otherwise noted); (iii) the maximum amount of Notes which may be
offered for the account of such Selling Securityholder under this Prospectus;
(iv) the amount of Common Stock owned by each Selling Securityholder as of
October 1, 1997 (unless otherwise noted); and (v) the maximum amount of Common
Stock which may be offered for the account of such Selling Securityholder under
this Prospectus. All information with respect to beneficial ownership has been
furnished to the Company by the respective Selling Securityholders. Beneficial
ownership of the Notes and Common Stock listed in the table has been determined
in accordance with the applicable rules and regulations promulgated under the
Exchange Act.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
NOTES BENEFICIALLY OWNED PRIOR TO THE OFFERING(1)(2)
PRIOR TO THE OFFERING ----------------------------------------
----------------------------------------------- NO. OF
PRINCIPAL AMOUNT SHARES
AGGREGATE % OF OF NOTES OFFERED % OF OFFERED
NAME OF SELLING SECURITYHOLDER PRINCIPAL AMOUNT CLASS HEREBY NO. OF SHARES CLASS HEREBY
- --------------------------------------- ----------------- ---------- ---------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Aim Charter Fund....................... $ 10,450,000 5.2% $ 10,450,000 201,932 1.0 201,932
Aim VI Growth & Income Fund............ 1,300,000 1.0 1,300,000 25,120 * 25,120
Alexandra Global Investment Fund 1,
Ltd.................................. 2,500,000 1.3 2,500,000 48,309 * 48,309
Argent Classic Convertible Arbitrage
Fund (Bermuda) L.P................... 500,000 * 500,000 9,961 * 9,961
Arkansas Public Employee Retirement
System............................... 1,275,000 1.0 1,275,000 24,637 * 24,637
Associated Electric & Gas Insurance
Services............................. 200,000 * 200,000 3,864 * 3,864
Bancroft Convertible Fund, Inc......... 500,000 * 500,000 9,961 * 9,961
Baptist Health of South Florida........ 151,000 * 151,000 2,917 * 2,917
Boston Museum of Fine Art.............. 64,000 * 64,000 1,236 * 1,236
Carrigaholt Capital (Bermuda) L.P...... 500,000 * 500,000 9,961 * 9,961
Chrysler Corp Emp #1 Pension Plan Dtd.
4/1/89............................... 1,953,000 1.0 1,953,000 37,739 * 37,739
Chrysler Corporation Master Retirement
Trust................................ 2,000,000 1.0 2,000,000 38,647 * 38,647
Combined Insurance Company of America
(3).................................. 500,000 * 500,000 9,961 * 9,961
Delaware Public Employee Retirement
System............................... 1,100,000 1.0 1,100,000 21,256 * 21,256
Delta Air Lines Master Trust........... 2,110,000 1.1 2,110,000 40,773 * 40,773
Donaldson, Lufkin & Jenrette Securities
Corp................................. 15,496,000 7.7 15,496,000 299,440 1.1 299,440
Dunham & Associates Fund II............ 41,000 * 41,000 792 * 792
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
NOTES BENEFICIALLY OWNED PRIOR TO THE OFFERING(2)(3)
PRIOR TO THE OFFERING ----------------------------------------
----------------------------------------------- NO. OF
PRINCIPAL AMOUNT SHARES
AGGREGATE % OF OF NOTES OFFERED % OF OFFERED
NAME OF SELLING SECURITYHOLDER PRINCIPAL AMOUNT CLASS HEREBY NO. OF SHARES CLASS HEREBY
- --------------------------------------- ----------------- ---------- ---------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dunham & Associates Fund III........... 18,000 * 18,000 347 * 347
Ellsworth Convertible Growth and Income
Fund, Inc............................ 500,000 * 500,000 9,961 * 9,961
Engineers Joint Pension Fund........... 236,000 * 236,000 4,560 * 4,560
Forest Fulcrum Fund LP................. 100,000 * 100,000 1,932 * 1,932
Forest Global Convertible Fund Ser
A-5.................................. 450,000 * 450,000 8,695 * 8,695
Forest Global Convertible Fund Ser
B-1.................................. 133,000 * 133,000 2,570 * 2,570
Forest Performance Fund................ 134,000 * 134,000 2,589 * 2,589
Forest Performance Greyhound........... 133,000 * 133,000 2,570 * 2,570
Franklin & Marshall College............ 157,000 * 157,000 3,033 * 3,033
Hawaiian Airlines--IAM................. 75,000 * 75,000 1,449 * 1,449
Hawaiian Airlines--Pilots Retirement... 100,000 * 100,000 1,932 * 1,932
Hawaiian Airlines--Salaried Employee
Retirement Plan...................... 15,000 * 15,000 289 * 289
Hughes Aircraft Company Master
Retirement Trust..................... 1,135,000 1.0 1,135,000 21,932 * 21,932
IBM Corp Retirement Plan Trust Dtd.
12/18/45............................. 3,332,000 1.7 3,332,000 64,386 * 64,386
ICI American Holding................... 445,000 * 445,000 8,599 * 8,599
Kapiolani Medical...................... 200,000 * 200,000 3,864 * 3,864
KD Offshore Fund, C.V.................. 250,000 * 250,000 4,830 * 4,830
Kellner, DiLeo & Co.................... 250,000 * 250,000 4,830 * 4,830
Lincoln National Convertible Securities
Fund................................. 1,405,000 1.0 1,405,000 27,149 * 27,149
Lincoln National Life Insurance........ 1,935,000 1.0 1,935,000 37,391 * 37,391
LLT Limited............................ 50,000 * 50,000 966 * 966
Massachusetts Mutual Life Insurance
Company.............................. 1,250,000 1.0 1,250,000 24,154 * 24,154
MassMutual Corporate Investors (4)..... 140,000 * 140,000 2,705 * 2,705
MassMutual Corporation Value Partners
Limited (4).......................... 300,000 * 300,000 5,797 * 5,797
MassMutual High Yield Partners LLC
(4).................................. 360,000 * 360,000 6,956 * 6,956
MassMutual Participation Investors
(4).................................. 75,000 * 75,000 1,449 * 1,449
McMahan Securities Co., L.P............ 500,000 * 500,000 9,961 * 9,961
Mega Life & Health Ins. Co............. 250,000 * 250,000 4,830 * 4,830
Minnesota Power........................ 250,000 * 250,000 4,830 * 4,830
Nalco Chemical Co...................... 210,000 * 210,000 4,057 * 4,057
N.H.B.D. L.P........................... 175,000 * 175,000 3,381 * 3,381
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
NOTES BENEFICIALLY OWNED PRIOR TO THE OFFERING(2)(3)
PRIOR TO THE OFFERING ----------------------------------------
----------------------------------------------- NO. OF
PRINCIPAL AMOUNT SHARES
AGGREGATE % OF OF NOTES OFFERED % OF OFFERED
NAME OF SELLING SECURITYHOLDER PRINCIPAL AMOUNT CLASS HEREBY NO. OF SHARES CLASS HEREBY
- --------------------------------------- ----------------- ---------- ---------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas-Appelgate Income & Growth
Fund................................. 1,960,000 1.0 1,960,000 37,874 * 37,874
Occidental College..................... 139,000 * 139,000 2,685 * 2,685
OCM Convertible Limited Partnership.... 250,000 * 250,000 4,830 * 4,830
OCM Convertible Trust.................. 3,190,000 1.6 3,190,000 61,642 * 61,642
Oppenheimer Bond Fund for Growth....... 3,000,000 1.5 3,000,000 57,971 * 57,971
Paloma Securities L.L.C................ 9,600,000 4.8 9,600,000 185,507 * 185,507
Partner Reinsurance Company Ltd........ 200,000 * 200,000 3,864 * 3,864
Pension Retirement Investment
Management Board..................... 1,735,000 1.0 1,735,000 33,526 * 33,526
Physicians Life........................ 300,000 * 300,000 5,797 * 5,797
R2 Investments, LDC.................... 500,000 * 500,000 9,661 * 9,661
SAIF Corporation....................... 3,500,000 1.8 3,500,000 67,632 * 67,632
San Diego City Retirement.............. 470,000 * 470,000 9,082 * 9,082
San Diego County Convertible........... 1,991,000 1.0 1,991,000 38,473 * 38,473
Shepherd Investments International,
Ltd.................................. 2,000,000 1.0 2,000,000 38,647 * 38,647
Silverton International Fund Limited... 6,400,000 3.2 6,400,000 123,671 * 123,671
South Dakota Retirement System......... 500,000 * 500,000 9,661 * 9,661
Stark International.................... 2,000,000 1.0 2,000,00 38,647 * 38,647
Starvest--Discretionary................ 400,000 * 400,000 7,729 * 7,729
State Employees' Retirement Fund of the
State of Delaware.................... 895,000 * 895,000 17,294 * 17,294
State of Connecticut Combined
Investment Funds..................... 2,775,000 1.4 2,775,000 53,623 * 53,623
State of Oregon--Equity................ 4,000,000 2.0 4,000,000 77,294 * 77,294
State Street Bank Cust for 6E Pension
Trust................................ 1,058,000 * 1,058,000 20,444 * 20,444
The Class IC Company, Ltd.............. 500,000 * 500,000 9,661 * 9,661
The Northwestern Mutual Life Insurance
Company.............................. 3,000,000(5) 1.5 3,000,000 325,871(6) 1.2 57,971
The TCW Group, Inc..................... 9,135,000 4.6 9,135,000 176,521 * 176,521
United National Insurance.............. 70,000 * 70,000 1,352 * 1,352
United Food and Commercial Workers
Local 1262 and Employer's Pension
Fund................................. 530,000 * 530,000 10,241 * 10,241
Vanguard Convertible Securities Fund,
Inc.................................. 1,945,000 1.0 1,945,000 37,584 * 37,584
Wake Forest University................. 370,000 * 370,000 7,149 * 7,149
Walker Art Center...................... 165,000 * 165,000 3,188 * 3,188
Weirton Trust.......................... 425,000 * 425,000 8,212 * 8,212
Zeneca Holdings........................ 445,000 * 445,000 8,599 * 8,599
----------------- --- ---------------- -------------- --- ------------
Subtotal........................... $ 118,651,000 59.3% $ 118,651,000 2,562,432 9.5% 2,294,532
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
NOTES BENEFICIALLY OWNED PRIOR TO THE OFFERING(2)(3)
PRIOR TO THE OFFERING ----------------------------------------
----------------------------------------------- NO. OF
PRINCIPAL AMOUNT SHARES
AGGREGATE % OF OF NOTES OFFERED % OF OFFERED
NAME OF SELLING SECURITYHOLDER PRINCIPAL AMOUNT CLASS HEREBY NO. OF SHARES CLASS HEREBY
- --------------------------------------- ----------------- ---------- ---------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Unnamed holders of Notes or any future
transferrees, pledgees, donees or
successors of or from any such
unnamed holders (7).................. $ 81,349,000 40.7% $ 81,349,000 2,571,963(8) 5.9% 2,571,963
----------------- --- ---------------- -------------- --- ------------
Total.............................. $ 200,000,000 100% $ 200,000,000 4,134,395 15.4% 3,866,495
----------------- --- ---------------- -------------- --- ------------
----------------- --- ---------------- -------------- --- ------------
</TABLE>
- ------------------------
* Less than one percent.
(1) Reflects the shares of Common Stock into which the Notes held by such
Selling Securityholder are convertible at the initial conversion rate. The
Conversion Price and the number of shares of Common Stock issuable upon
conversion of the Notes are subject to adjustment under certain
circumstances. See "Description of Notes--Conversion Rights." Accordingly,
the number of shares of Common Stock issuable upon conversion of the Notes
may increase or decrease from time to time.
(2) Assumes conversion into Common Stock of the full amount of Notes held by the
Selling Securityholder at the initial conversion rate and the offering of
such shares by such Selling Securityholder pursuant to this Prospectus. The
Conversion Price and the number of shares of Common Stock issuable upon
conversion of the Notes is subject to adjustment under certain
circumstances. See "Description of Notes--Conversion Rights." Accordingly,
the number of shares of Common Stock issuable upon conversion of the Notes
may increase or decrease from time to time. Fractional shares will not be
issued upon conversion of the Notes; rather, cash will be paid in lieu of
fractional shares, if any.
(3) Amounts as of October 14, 1997.
(4) Amounts as of October 9, 1997.
(5) Includes $500,000 in principal amount held in The Northwestern Mutual Life
Insurance Company Group Annuity Separate Account.
(6) Includes 267,900 shares of Common Stock held by affiliates of the
Northwestern Mutual Life Insurance Company.
(7) No such holder may offer Notes pursuant to this Prospectus until such holder
is included as a Selling Securityholder in a supplement to this Prospectus
in accordance with the Registration Rights Agreement.
(8) Assumes that the unnamed holders of Notes or any future transferees,
pledgees, donees or successors of or from any such unnamed holder do not
beneficially own any Common Stock other than the Common Stock issuable upon
conversion of the Notes at the initial conversion rate.
37
<PAGE>
Because the Selling Securityholders may, pursuant to this Prospectus, offer
all or some portion of the Notes and Common Stock they presently hold or, with
respect to Common Stock, have the right to acquire upon conversion of such
Notes, no estimate can be given as to the amount of the Notes and Common Stock
that will be held by the Selling Securityholders upon termination of any such
sales. In addition, the Selling Securityholders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Notes and Common
Stock since the date on which they provided the information regarding their
Notes and Common Stock, in transactions exempt from the registration
requirements of the Securities Act. See "Plan of Distribution."
Only Selling Securityholders identified above who beneficially own the Notes
and Common Stock set forth opposite each such Selling Securityholder's name in
the foregoing table on the effective date of the Registration Statement may sell
such Notes and Common Stock pursuant to this Prospectus. The Company may from
time to time, in accordance with the Registration Rights Agreement, include
additional Selling Securityholders in supplements to this Prospectus.
The Company has agreed to pay the cost of the registration of the Securities
and the preparation of this Prospectus and the Registration Statement under
which it is filed. The Selling Securityholders are responsible for any
underwriting discounts and commissions relating to the Securities to be sold by
the Selling Securityholders.
PLAN OF DISTRIBUTION
The Notes were issued to the Selling Securityholders in connection with an
underwritten private placement. The Company entered into the Registration Rights
Agreement with the Initial Purchasers for the benefit of holders of the Notes to
register their Notes and such Common Stock under the Securities Act under
certain circumstances and at certain times. The Registration Rights Agreement
provides for cross-indemnification of the Selling Securityholders and the
Company for losses, claims, damages, liabilities and expenses arising, under
certain circumstances, out of the registration of the Notes and such Common
Stock.
The Notes and the underlying Common Stock may by sold from time to time by
the Selling Securityholders. The Selling Securityholder may from time to time
sell all or a portion of the Securities in one or more transactions (which may
involve one or more block transactions) on the exchange on which the Securities
are traded, if any, in the over-the-counter market, in separately negotiated
transactions or in a combination of such transactions; that each sale may be
made either at market prices prevailing at the time of such sale or at
negotiated prices; that some or all of the Securities may be sold through
brokers acting on behalf of the Selling Securityholder or to dealers or
underwriters for resale by such dealers or underwriters; and that in connection
with such sales such brokers, dealers and underwriters may receive compensation
in the form of discounts or commissions from the Selling Securityholder and may
receive commissions from the purchasers of Shares for whom they act as broker or
agent (which discounts and commissions are not anticipated to exceed those
customary in the types of transactions involved). Any broker or dealer
participating in any such sale may be deemed to be an "underwriter" within the
meaning of the Securities Act and will be required to deliver a copy of this
Prospectus to any person who purchases any of the Securities from or through
such broker or dealer.
To the extent required, the specific aggregate principal amount of Notes or
shares of Common Stock to be sold, the respective purchase price and the public
offering price, the names of any such broker, dealer or underwriter, any
commissions or discounts with respect to a particular offer and any other
information material to the transaction will be set forth in an accompanying
Prospectus Supplement or, if appropriate, a post-effective amendment to the
Registration Statement of which this Prospectus is a part.
In connection with any sales through a broker, such broker may act as agent
for the Selling Securityholder or may purchase from the Selling Securityholder
all or a portion of such Securities as principal. Securities sold by a broker
may be made in one or more of the following transactions: (i) block
38
<PAGE>
transactions (which may involve crosses) in which a broker may sell all or a
portion of such shares as agent but may position and resell all or a portion of
the block as principal to facilitate the transaction; (ii) purchases by any
broker as principal and resale by such broker for its own account pursuant to a
Prospectus Supplement; (iii) an exchange distribution or a secondary
distribution in accordance with applicable NYSE rules; (iv) ordinary brokerage
transactions and transactions in which any broker solicits purchasers; (v) sales
"at the market" to or through the market maker or into an existing trading
market, on an exchange or otherwise, for such Securities; and (vi) sales in
other ways not involving market makers or established trading markets, including
direct sales to institutions or individual purchasers.
The Company will use its best efforts to cause the Registration Statement to
which this Prospectus relates to become effective as soon as practicable and to
keep the Registration Statement effective for a period of two years from July
29, 1997 (the latest date of original issuance of the Notes), or until the
Registration Statement is no longer required for transfer of the Notes or the
underlying Common Stock. The Company is permitted to suspend the use of this
Prospectus in connection with the sales of Notes and the underlying Common Stock
by holders upon the happening of certain events or if there exists any act that
makes any statement of material fact made in this Prospectus untrue or that
requires the making of additions to or changes in the Prospectus in order to
make the statements herein not misleading until such time as the Company advises
the Selling Securityholders that use of the Prospectus may be resumed. Pursuant
to the terms of the Registration Rights Agreement, the Company has agreed to pay
the cost of the registration of the Securities and the preparation of this
Prospectus and the Registration Statement under which it is filed. The expenses
so payable by the Company are estimated to be approximately $140,000.
In order to comply with the securities laws of certain states, if
applicable, the Notes and the underlying Common Stock may be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the Notes and the underlying Common Stock may not be
sold unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with.
Any Securities covered by this Prospectus that qualify for sale pursuant to
Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule
144A rather than pursuant to this Prospectus. There can be no assurance that any
Selling Securityholder will sell any or all of the Notes or the underlying
Common Stock described herein, and any Selling Securityholder may transfer,
devise or gift such securities by other means not described herein.
LEGAL MATTERS
Certain legal matters regarding the validity of the Notes and the shares of
Common Stock issuable upon the conversion of the Notes have been passed upon for
the Company by Kirkland & Ellis, Chicago, Illinois (a partnership which includes
professional corporations).
EXPERTS
The audited financial statements incorporated by reference into this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their reports, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
39
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OF THE SELLING SECURITYHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
AVAILABLE INFORMATION.......................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE.................................... 1
THE COMPANY.................................... 3
RISK FACTORS................................... 5
USE OF PROCEEDS................................ 8
RATIO OF EARNINGS TO FIXED CHARGES............. 9
DESCRIPTION OF NOTES........................... 9
DESCRIPTION OF CAPITAL STOCK................... 25
CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES................................. 26
SELLING SECURITYHOLDERS........................ 34
PLAN OF DISTRIBUTION........................... 38
LEGAL MATTERS.................................. 39
EXPERTS........................................ 39
</TABLE>
$200,000,000
TOWER AUTOMOTIVE, INC.
5% CONVERTIBLE SUBORDINATED
NOTES DUE 2004
---------------------
PROSPECTUS
---------------------
, 1997
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses of the Registrant in connection
with the issuance and distribution of the securities being registered, other
than underwriting discounts and commissions. All such amounts are estimates,
other than the fees payable to the Commission and the NYSE.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $ 60,606
NYSE listing fee.................................................. 1,500
Legal fees and expenses........................................... 50,000
Accounting fees and expenses...................................... 20,000
Miscellaneous..................................................... 7,894
---------
Total......................................................... $ 140,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to limit the personal liability of its directors
in accordance with the provisions set forth therein. The Restated Certificate of
Incorporation of the Registrant provides that the personal liability of its
directors shall be limited to the fullest extent permitted by applicable law.
Section 145 of the General Corporation Law of the State of Delaware contains
provisions permitting corporations organized thereunder to indemnify directors,
officers, employees or agents against expenses, judgments and fines reasonably
incurred and against certain other liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person was or is a director, officer, employee or agent of the corporation. The
Restated Certificate of Incorporation of the Registrant provide for
indemnification of its directors and officers to the fullest extent permitted by
applicable law.
ITEM 16. EXHIBITS.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
1.1 Purchase Agreement, dated as of July 23, 1997, by and between the Company
and Donaldson, Lufkin & Jenrette Securities Corporation, Robert W. Baird
& Co. Incorporated, Paine Webber Incorporated and BT Securities
Corporation.
*4.1 Specimen certificate for shares of Common Stock.
4.2 Amended and Restated Certificate of Incorporation of the Company,
incorporated by reference to Exhibit 3.1 of the Company's Form S-1
Registration Statement (Registration No. 33-80320) (the "Form S-1").
4.3 Certificate of Amendment to Amended and Restated Certificate of
Incorporation.
4.4 Amended and Restated By-Laws of the Company, incorporated by reference to
Exhibit 3.2 of the Form S-1.
4.5 Indenture, dated as of July 28, 1997, by and between the Company and Bank
of New York, as trustee (including form of 5% Convertible Subordinated
Note due 2004).
4.6 Registration Rights Agreement, dated as of July 28, 1997, by and between
the Company and Donaldson, Lufkin & Jenrette Securities Corporation,
Robert W. Baird & Co. Incorporated, PaineWebber Incorporated and BT
Securities Corporation.
5.1 Opinion of Kirkland & Ellis regarding legality of securities being
registered.
12.1 Statements regarding computation of ratio of earnings to fixed charges.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.
24.1 Powers of Attorney included in Part II of Registration Statement.
25.1 Form T-1.
</TABLE>
- ------------------------
* To be filed by amendment.
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect ot the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be 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 the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the 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 Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, Minnesota, as of October 24, 1997.
TOWER AUTOMOTIVE, INC.
By: /s/ S.A. JOHNSON
-----------------------------------
S.A. Johnson
CHAIRMAN OF THE BOARD
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott D. Rued, Carl E. Nelson, David J. Huls and
each of them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities to sign any and all amendments (including pre-effective and
post-effective amendments) to this Registration Statement (and any registration
statement filed pursuant to Rule 462(b) under the Securities Act), and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated.
SIGNATURE TITLE DATE
- ----------------------------------- ------------------------- ----------------
/s/ S.A. JOHNSON
- ----------------------------------- Chairman of the Board and October 24, 1997
S.A. Johnson Director
/s/ ADRIAN VANDER STARRE
- ----------------------------------- Director October 24, 1997
Adrian Vander Starre
President, Chief
/s/ DUGALD K. CAMPBELL Executive Officer and
- ----------------------------------- Director (Principal October 24, 1997
Dugald K. Campbell Executive Officer)
Vice President and Chief
/s/ ANTHONY A. BARONE Financial Officer
- ----------------------------------- (Principal Financial October 24, 1997
Anthony A. Barone and Accounting Officer)
II-3
<PAGE>
<TABLE>
<C> <S> <C>
/s/ JAMES R. LOZELLE
- ----------------------------------- Director October 24, 1997
James R. Lozelle
/s/ SCOTT D. RUED
- ----------------------------------- Director October 24, 1997
Scott D. Rued
/s/ WILLIAM H. CLEMENT
- ----------------------------------- Director October 24, 1997
William H. Clement
/s/ ERIC J. ROSEN
- ----------------------------------- Director October 24, 1997
Eric J. Rosen
/s/ MATTHEW O. DIGGS, JR.
- ----------------------------------- Director October 24, 1997
Matthew O. Diggs, Jr.
/s/ E.J. LOUGHREY
- ----------------------------------- Director October 24, 1997
E.J. Loughrey
/s/ KIM B. CLARK
- ----------------------------------- Director October 24, 1997
Kim B. Clark
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Purchase Agreement, dated as of July 23, 1997, by and between the Company and Donaldson, Lufkin &
Jenrette Securities Corporation, Robert W. Baird & Co. Incorporated, Paine Webber Incorporated and BT
Securities Corporation.
*4.1 Specimen certificate for shares of Common Stock.
4.2 Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit
3.1 of the Company's Form S-1 Registration Statement (Registration No. 33-80320) (the "Form S-1").
4.3 Certificate of Amendment to Amended and Restated Certificate of Incorporation.
4.4 Amended and Restated By-Laws of the Company, incorporated by reference to Exhibit 3.2 of the Form S-1.
4.5 Indenture, dated as of July 28, 1997, by and between the Company and Bank of New York, as trustee
(including form of 5% Convertible Subordinated Note due 2004).
4.6 Registration Rights Agreement, dated as of July 28, 1997, by and between the Company and Donaldson,
Lufkin & Jenrette Securities Corporation, Robert W. Baird & Co. Incorporated, Paine Webber
Incorporated and BT Securities Corporation.
5.1 Opinion of Kirkland & Ellis regarding legality of securities being registered.
12.1 Statements regarding computation of ratio of earnings to fixed charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.
24.1 Powers of Attorney included in Part II of Registration Statement.
25.1 Form T-1.
</TABLE>
- ------------------------
* To be filed by amendment.
II-5
<PAGE>
Exhibit 1.1
TOWER AUTOMOTIVE, INC.
$175,000,000
5% Convertible Subordinated Notes due 2004
Purchase Agreement
July 23, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
PAINEWEBBER INCORPORATED
BT SECURITIES CORPORATION
<PAGE>
$150,000,000
5% Convertible Subordinated Notes due 2004
of Tower Automotive, Inc.
PURCHASE AGREEMENT
July 23, 1997
Donaldson, Lufkin & Jenrette
Securities Corporation
Robert W. Baird & Co. Incorporated
PaineWebber Incorporated
BT Securities Corporation
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
27 Park Avenue
New York, New York 10005
Dear Sirs:
Tower Automotive, Inc., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation, Robert W.
Baird & Co. Incorporated, PaineWebber Incorporated, and BT Securities
Corporation (each an "Initial Purchaser" and, collectively, the "Initial
Purchasers") an aggregate of $175,000,000 in principal amount of its 5%
Convertible Subordinated Notes due 2004 (the "Firm Notes"), subject to the terms
and conditions set forth herein. The Company also proposes to issue and sell to
the Initial Purchasers not more than an additional $25,000,000 principal amount
of its 5% Convertible Subordinated Notes due 2004 (the "Additional Notes"), if
requested by the Initial Purchasers as provided in Section 2 hereof. The Firm
Notes and the Additional Notes are herein collectively referred to as the
"Notes." The Notes are to be issued pursuant to the provisions of an indenture
(the "INDENTURE"), to be dated as of the Closing Date (as defined below),
between the Company and Bank of New York, as trustee (the "TRUSTEE"), pursuant
to which the Notes, as provided therein, will be convertible at the option of
the holders thereof into shares of the Company's common stock, par value $.01
per share (the "Common Stock"). The Notes and Common Stock issuable upon
conversion thereof are herein collectively referred to as the "Securities." The
Securities and the Indenture are more fully described in the Offering Memorandum
(as hereinafter defined). Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Offering Memorandum.
1. OFFERING MEMORANDUM. The Notes will be offered and sold to the
Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the
<PAGE>
Securities Act of 1933, as amended (the "ACT"). The Company has prepared a
preliminary offering memorandum, dated July 16, 1997 (the "PRELIMINARY OFFERING
MEMORANDUM") and a final offering memorandum, dated July 23, 1997 (the "OFFERING
MEMORANDUM"), relating to the Securities.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Notes (and all securities issued
in exchange therefor, in substitution thereof or upon conversion thereof,
including certificates for shares of Common Stock) shall bear the following
legend:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE THIRD SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)(A "QIB"),
(B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES, OR COMMON STOCK HAVING A MARKET
VALUE, LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN
-2-
<PAGE>
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company, the principal amount of
Firm Notes set forth opposite the name of such Initial Purchaser on Schedule A
hereto, at a purchase price equal to 97.25% of the principal amount thereof (the
"PURCHASE PRICE").
(b) On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell the Additional Notes and (ii) the Initial Purchasers shall have a
right to purchase, severally and not jointly, the Additional Notes, from the
Company at the Purchase Price. Additional Notes may be purchased solely for the
purpose of covering over-allotments made in connection with the Offering of the
Firm Notes. The Initial Purchasers may exercise their right to purchase
Additional Notes in whole or in part from time to time by giving written notice
thereof to the Company at any time within 30 days after the date of this
Agreement. Donaldson, Lufkin & Jenrette Securities Corporation shall give any
such notice on behalf of the Initial Purchasers and such notice shall specify
the aggregate principal amount of Additional Notes to be purchased pursuant to
such exercise and the date for payment and delivery thereof. The date specified
in any such notice shall be a business day (i) no earlier than the Closing Date
(as hereinafter defined), (ii) no later than ten business days after such notice
has been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Notes are to be purchased, each Initial
Purchaser, severally and not jointly, agrees to purchase from the Company the
principal amount of Additional Notes which bears the same proportion to the
total principal amount of Additional Notes to be purchased from the Company as
the principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule A bears to the total principal amount of Firm Notes.
3. TERMS OF OFFERING. The Initial Purchasers have advised the Company
that the Initial Purchasers will make offers (the "EXEMPT RESALES") of the Notes
purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS"), (ii) not more than ten other institutional
"accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the
Act, that make certain representations and agreements to the Company (each, an
"ACCREDITED INSTITUTION"), and
-3-
<PAGE>
(iii) to persons permitted to purchase the Notes in offshore transactions in
reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER")
(such persons specified in clauses (i), (ii) and (iii) being referred to herein
as the "ELIGIBLE PURCHASERS"). The Initial Purchasers will offer the Notes to
Eligible Purchasers initially at a price equal to 100.00% of the principal
amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Securities will have the
registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Securities constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "COMMISSION"),
under the circumstances set forth therein, a shelf registration statement
pursuant to Rule 415 under the Act (the "REGISTRATION STATEMENT") and to use its
best efforts to cause such Registration Statement to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement. This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE
DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the Firm Notes
shall be made at the offices of Gardner, Carton & Douglas, Quaker Tower, 321
North Clark Street, Chicago, Illinois 60610, or such other location as may be
mutually acceptable. Such delivery and payment shall be made at 10:00 a.m.
Chicago time, on July 29, 1997 or at such other time as shall be agreed upon by
the Initial Purchasers and the Company. The time and date of such delivery and
the payment are herein called the "CLOSING DATE."
(b) Delivery to the Initial Purchasers of and payment for any Additional
Notes to be purchased by the Initial Purchasers shall be made at the offices of
Gardner, Carton & Douglas, Quaker Tower, 321 North Clark Street, Chicago,
Illinois 60610 at 10:00 a.m. Chicago time, on the date specified in the
exercise notice given by Donaldson Lufkin & Jenrette Securities Corporation
pursuant to Section 2(b) (the "Option Closing Date"). Any such Option Closing
Date and the location of delivery of and form of payment for the Additional
Notes may be varied by agreement between the Initial Purchasers and the Company.
(c) One or more of the Notes in definitive global form, registered in the
name of Cede & Co., as nominee of the Depository Trust Company ("DTC"), having
an aggregate principal amount corresponding to the aggregate principal amount of
the Notes (collectively, the "GLOBAL NOTE"), shall be delivered by the Company
to the Initial Purchasers (or as the Initial Purchasers direct) in each case
with any transfer taxes thereon duly paid by the Company against payment by the
Initial Purchasers of the Purchase Price thereof by wire transfer in same day
funds to the order of the Company. The Global Note shall be made available to
the Initial Purchasers for inspection at the offices of Donaldson, Lufkin &
Jenrette Securities Corporation not later than 2:00 p.m., New York City time, on
the business day immediately preceding the Closing Date and the Option Closing
Date, if any.
-4-
<PAGE>
5. AGREEMENTS OF THE COMPANY. The Company agrees with each Initial
Purchaser as follows:
(a) To advise each Initial Purchaser promptly and, if requested by such
Initial Purchaser, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any Securities for offering or sale in any
jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading. The Company shall use its
best efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Securities under any state securities or Blue
Sky laws and, if at any time any state securities commission or other federal or
state regulatory authority shall issue an order suspending the qualification or
exemption of any Notes under any state securities or Blue Sky laws, the Company
shall use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
(b) To furnish each Initial Purchaser and those persons identified by the
Initial Purchasers to the Company as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request. Subject to each
Initial Purchaser's compliance with its representations and warranties and
agreements set forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
and supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) During such period as counsel for the Initial Purchasers reasonably
determines an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers, (i) not to make any
amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which the Initial
Purchasers shall reasonably object after being so advised and (ii) to prepare
promptly upon any Initial Purchaser's reasonable request, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel to the Initial Purchasers (after discussions with counsel to the
Company), it becomes necessary to amend or supplement the Offering Memorandum in
order to make the statements therein, in the light of the circumstances when
such Offering Memorandum is delivered to an Eligible Purchaser, not misleading,
or if, in the opinion of counsel to the Initial Purchasers, it is necessary to
amend or supplement the Offering Memorandum to comply with any applicable law,
forthwith to prepare an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein, as so amended or supplemented, will
not, in the light of the circumstances when it is so delivered, be
-5-
<PAGE>
misleading, or so that such Offering Memorandum will comply with applicable law,
and to furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
(e) Prior to the sale of all Securities pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the registration or qualification of the
Securities for offer and sale to the Initial Purchasers and pursuant to Exempt
Resales under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may request and to continue such qualification in effect so
long as required for Exempt Resales and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; PROVIDED, HOWEVER, that the Company shall not be
required in connection therewith to register or qualify as a foreign corporation
in any jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction in
which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to make generally available
as soon as practicable after the end of each fiscal year to the record holders
of the Notes a financial report of the Company and its subsidiaries on a
consolidated basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated statement
of cash flows and a consolidated statement of shareholders' equity as of the end
of and for such fiscal year, together with comparable information as of the end
of and for the preceding year, certified by the Company's independent public
accountants and (ii) to make generally available as soon as practicable after
the end of each quarterly period (except for the last quarterly period of each
fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year to the
close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year; provided, however, that nothing
herein shall be deemed to require the Company to provide such information to
such holders prior to the time such information would be required to be filed
with the Commission.
(g) So long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as reasonably practicable copies of all reports or other
communications furnished by the Company to its security holders or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and/or its subsidiaries as the Initial
Purchasers may reasonably request.
(h) So long as any of the Securities are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act and during any period in
which the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make available within
a reasonable period of time to any holder of Securities upon written request in
connection with any sale thereof and any prospective purchaser
-6-
<PAGE>
of such Securities from such holder, the information ("RULE 144A INFORMATION")
required by Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company under
this Agreement, including: (i) the fees, disbursements and expenses of counsel
to the Company and accountants of the Company in connection with the sale and
delivery of the Securities to the Initial Purchasers and pursuant to Exempt
Resales, and all other fees or expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the
Offering Memorandum and all amendments and supplements to any of the foregoing
(including financial statements) specified in Section 5(b) and 5(c) prior to or
during the period specified in Section 5(c), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
it in the reasonable quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Securities to the Initial Purchasers
and pursuant to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the other
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Securities, (iv) all reasonable
expenses in connection with the registration or qualification of the Securities
for offer and sale under the securities or Blue Sky laws of the several states
and all costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Securities, (vi) all expenses and listing
fees in connection with the application for quotation of the Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotation
System - PORTAL ("PORTAL"), (vii) the reasonable fees and expenses of the
Trustee and the Trustee's counsel in connection with the Indenture and the
Notes, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and expenses of any Registration Statement,
as set forth in the Registration Rights Agreement, and (xi) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the Notes in PORTAL
and to maintain the listing of the Notes on PORTAL for so long as the Notes are
outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of the Notes,
and to comply with all of its agreements set forth in the representation letters
of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(l) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any warrants,
rights or options to purchase or otherwise acquire debt securities of the
Company substantially similar to the Notes (other than the Notes), without the
prior written consent of the Initial Purchasers.
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(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Notes to the Initial Purchasers or pursuant to
Exempt Resales in a manner that would require the registration of any such sale
of the Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(o) To comply with all of its agreements set forth in the Registration
Rights Agreement.
(p) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Notes.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As of the
date hereof, the Company represents and warrants to, and agrees with, each
Initial Purchaser that:
(a) The Preliminary Offering Memorandum as of its date did not, and
Offering Memorandum does not, and any supplement or amendment thereto will not,
contain 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, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information furnished to the Company in writing by the Initial Purchasers
expressly for use therein. No stop order preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.
(b) Each of the Company and its subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business as described in the Offering Memorandum and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights.
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(d) The entities listed on Schedule B hereto are the only subsidiaries,
direct or indirect, of the Company. All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and, except as otherwise
set forth in the Offering Memorandum, are owned by the Company, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature.
(e) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company and is
enforceable against the Company in accordance with the terms hereof, except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability, and except to the extent that
enforcement of the indemnification and contribution provisions of this Agreement
may be limited by applicable public policy and the discretion of the court
before which any proceeding therefor may be brought.
(f) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been validly executed and delivered by the Company.
When the Indenture has been duly executed and delivered by the Company, the
Indenture will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder.
(g) The Notes have been duly authorized and, on the Closing Date, will
have been validly executed and delivered by the Company. When the Notes have
been issued, executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in accordance
with the terms of this Agreement, the Notes will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Notes and the Indenture will conform as
to legal matters to the description thereof contained in the Offering
Memorandum, subject to the qualifications and limitations set forth therein.
(h) The Notes are convertible into Common Stock in accordance with the
terms of the Indenture; the shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved for issuance upon
such conversion and, when issued upon such conversion in accordance with the
terms of the Indenture, will be validly issued, fully paid and nonassessable,
will conform to the description thereof contained in the Offering Memorandum and
will be duly authorized for listing on the New York Stock Exchange, subject to
notice of
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official issuance; the Company has the authorized and outstanding capital stock
as set forth in the Offering Memorandum; and the stockholders of the Company
have no pre-emptive or similar rights with respect to the Notes or the Common
Stock issuable upon the Notes.
(i) The Registration Rights Agreement has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(j) Neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument that is material to the conduct of the business of the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, which default could reasonably be expected
to result in a Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company, compliance by the Company with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any contract
or other agreement to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound or affect, (iii) violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company or affected any of
its subsidiaries other than conflicts or breaches that, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect or materially impair the ability of the Company to perform its
obligations under this Agreement or the other Operative Documents.
(l) There are no material legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any of its
subsidiaries or any of their respective officers in their capacity as such is or
could be a party or of which any of their respective property is subject.
(m) Except as otherwise set forth in the Offering Memorandum, neither the
Company nor any of its subsidiaries has violated any foreign, federal, state or
local law or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic
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<PAGE>
substances or wastes, pollutants or contaminants ("Environmental Laws"), nor any
foreign, federal, state or local employment or labor law or regulation,
including, without limitation, laws or regulations relating to discrimination in
the hiring, promotion or pay of employees, nor any applicable federal or state
wages and hours laws or regulations, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case could reasonably be expected to result in a
Material Adverse Effect. Except as otherwise set forth in the Offering
Memorandum, no labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent or
threatened; and the Company is not aware of any existing, imminent or threatened
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could reasonably be expected to result in a
Material Adverse Effect.
(n) The Company and each of its subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties and
to conduct its business in the manner described in the Offering Memorandum,
except for such permits, licenses, franchises and authorizations, the absence of
which, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Offering Memorandum, such permits contain no restrictions that
are materially burdensome to the Company or any of its subsidiaries.
(o) Except as otherwise set forth in the Offering Memorandum or the
Company's most recent Annual Report on Form 10-K, or such as are not material to
the business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of all liens, claims,
encumbrances and restrictions except liens for taxes not yet due and payable and
liens that do not materially detract from the value thereof or materially impair
its use in the business of the Company or such subsidiary, to all property and
assets described in the Offering Memorandum as being owned by it. All leases to
which the Company or any of its subsidiaries is a party are valid and binding
and no default has occurred or is continuing thereunder, which might result in a
Material Adverse Effect, and the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a party as
lessee with such exceptions as do not materially interfere with the use made by
the Company or such subsidiary.
(p) The Company and each of its subsidiaries maintain reasonably adequate
insurance.
(q) The accountants, Arthur Andersen LLP, that have certified the
financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Company, as required by the Act and the Exchange
Act. The historical financial statements, together with
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related schedules and notes, set forth in the Preliminary Offering Memorandum
and the Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
(r) The historical financial statements, together with related schedules
and notes forming part of the Offering Memorandum (and any amendment or
supplement thereto), present fairly the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(s) The PRO FORMA financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Company and its
subsidiaries and give effect to assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum; and such PRO FORMA financial statements comply as to
form in all material respects with the requirements applicable to PRO FORMA
financial statements included in registration statements on Form S-1 under the
Act. The other PRO FORMA financial and statistical information and data
included in the Offering Memorandum are, in all material respects, accurately
presented and prepared on a basis consistent with the PRO FORMA financial
statements.
(t) The Company is not and, after giving effect to the offering and sale
of the Notes and the application of the net proceeds thereof as described in the
Offering Memorandum, will not be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(u) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
include any securities with the Securities registered pursuant to any
Registration Statement that have not otherwise been waived.
(v) Neither the Company nor any of its subsidiaries nor any agent thereof
acting on the behalf of them has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Securities to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(w) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not
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occurred any material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(x) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(y) When the Notes are issued and delivered pursuant to this Agreement,
the Notes will not be of the same class (within the meaning of Rule 144A under
the Act) as any security of the Company that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is quoted in a
United States automated inter-dealer quotation system.
(z) No form of general solicitation or general advertising (as defined
in Regulation D under the Act) was used by the Company or any of its
representatives (other than the Initial Purchasers, as to whom the Company makes
no representation) in connection with the offer and sale of the Securities
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(aa) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
(bb) Neither the Company nor any of its affiliates or any person acting
on its or their behalf (other than the Initial Purchasers, as to whom the
Company makes no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the Act ("REGULATION
S") with respect to the Securities.
(cc) The Securities offered and sold in reliance on Regulation S have
been and will be offered and sold only in offshore transactions.
(dd) The sale of the Securities pursuant to Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(ee) No registration under the Act of the Securities is required for the
sale of the Securities to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof and
those of the purchasers who are Accredited Institutions who make the
representations contained in the certificate attached to the Offering Memorandum
as ANNEX A.
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(ff) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company's retaining any rating assigned as of
the date hereof to the Company or any securities of the Company or (ii) has
indicated to the Company that it is considering (a) the downgrading, suspension
or withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company.
(gg) Each certificate signed by any officer of the Company and delivered
to the Initial Purchasers or counsel for the Initial Purchasers shall be deemed
to be a representation and warranty by the Company to the Initial Purchasers as
to the matters covered thereby.
(hh) The Company and its affiliates and all persons acting on their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering
Memorandum will contain the disclosure required by Rule 902(h).
The Company acknowledges that the Initial Purchasers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance. Notwithstanding the foregoing, the Company shall have no
liability to its counsel or counsel to the Initial Purchasers for any such
representation or warranty contained herein in connection with such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and agrees that:
(a) Such Initial Purchaser is either a QIB or an Accredited Institution,
in either case, with such knowledge and experience in financial and business
matters as is necessary in order to evaluate the merits and risks of an
investment in the Securities.
(b) Such Initial Purchaser (A) is not acquiring the Securities with a
view to any distribution thereof or with any present intention of offering or
selling any of the Securities in a transaction that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Securities only to
(x) QIBs in reliance on the exemption from the registration requirements of the
Act provided by Rule 144A, (y) not more than ten Accredited Institutions that
execute and deliver a letter containing certain representations and agreements
in the form attached as ANNEX A to the Offering Memorandum in reliance upon
Section 4(2) of the Act and (z) in offshore transactions in reliance upon
Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general solicitation
or general advertising (within the meaning of Regulation D under the Act) has
been or will be used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of the Securities pursuant hereto, including,
but not limited to, articles, notices or other
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communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Securities only
from, and will offer to sell the Securities only to, Eligible Purchasers. Each
Initial Purchaser further agrees that it will offer to sell the Securities only
to, and will solicit offers to buy the Securities only from (A) Eligible
Purchasers that such Initial Purchaser reasonably believes are QIBs, (B)
Accredited Institutions who make the representations contained in, and execute
and return to such Initial Purchaser, a certificate in the form of ANNEX A
attached to the Offering Memorandum and (C) Regulation S Purchasers, in each
case, that agree that (x) the Securities purchased by them may be resold,
pledged or otherwise transferred within the time period referred to under Rule
144(k) (taking into account the provisions of Rule 144(d) under the Act, if
applicable) under the Act, as in effect on the date of the transfer of such
Securities, only (I) to the Company or any of its subsidiaries, (II) to a person
whom the seller reasonably believes is a QIB purchasing for its own account or
for the account of a QIB in a transaction meeting the requirements of Rule 144A
under the Act, (III) in an offshore transaction (as defined in Rule 902 under
the Act) meeting the requirements of Rule 904 of the Act, (IV) in a transaction
meeting the requirements of Rule 144 under the Act, (V) to an Accredited
Institution that, prior to such transfer, furnishes the Trustee a signed letter
containing certain representations and agreements relating to the registration
of transfer of such Securities (the form of which is substantially the same as
ANNEX A to the Offering Memorandum) and, if such transfer is in respect of an
aggregate principal amount of Securities less than $250,000, an opinion of
counsel acceptable to the Company that such transfer is in compliance with the
Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VII) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Securities or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) No such Initial Purchaser nor any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Regulation S with respect to the Securities.
(f) The Securities offered and sold by such Initial Purchaser pursuant
hereto in reliance on Regulation S have been and will be offered and sold only
in offshore transactions. Such Initial Purchaser agrees that it has offered the
Securities and will offer and sell the Securities (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities pursuant hereto and the Closing
Date or Option Closing Date, if any, whichever is later, only in accordance with
Rule 903 of Regulation S or another exemption from the registration requirements
of the Act. Such Initial Purchaser agrees that, during such 40-day restricted
period, it will not cause any advertisement with respect to the Securities
(including any "tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any circular
relating to the Securities,
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except such advertisements as are permitted by and include the statements
required by Regulation S.
(g) The sale of the Securities offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that, at or prior to confirmation of a
sale of Securities by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903(c)(3) under the Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation of notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent
sale by you of the Securities covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver
a notice to substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S."
(i) Such Initial Purchaser further represents and agrees that (i) it has
not offered or sold and will not offer or sell any Notes to persons in the
United Kingdom prior to the expiration of the period of six months from the
issue date of the Notes, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their business or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of the Notes to a
person who is of a kind described in Article 11(3) of the Financial Services Act
of 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to
whom the document may otherwise lawfully be issued or passed on.
(j) Such Initial Purchaser agrees that it will not offer, sell or
deliver any of the Securities in any jurisdiction outside the United States
except under circumstances that will result in compliance with the applicable
laws thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Securities in such
jurisdictions. Such Initial Purchaser understands that no action has been taken
to permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose.
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<PAGE>
The Initial Purchasers acknowledge that the Company and, for purposes of
the opinions to be delivered to each Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchasers hereby consent to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees, to indemnify and hold harmless each Initial
Purchaser, its directors, its officers and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company to any holder or prospective
purchaser of Securities pursuant to Section 5(h) or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by such Initial Purchaser.
Notwithstanding the foregoing, the foregoing indemnity with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of any Initial
Purchaser from whom the person asserting any such losses, claims, damages,
liabilities or judgments purchased Securities or any director, officer or person
controlling such Initial Purchaser, if a copy of the Offering Memorandum (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such Initial
Purchaser to such person at or prior to the written confirmation of the sale of
the securities to such person, and if such Offering Memorandum (as so amended
and supplemented) had been delivered, such delivery would have completely cured
the defect giving rise to such loss, claim, damage, liability or judgment.
(b) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, and its directors and officers and each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Company, to the same extent as the foregoing
indemnity from the Company to the Initial Purchasers but only with reference to
information furnished in writing to the Company by such Initial Purchaser
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum. For purposes of this Agreement, the only information furnished in
writing to the Company by the Initial Purchasers includes: (i) the last
paragraph on the cover page; (ii) the first paragraph on page (i); and (iii) the
fourth, fifth, eighth and eleventh paragraph under the caption "Plan of
Distribution".
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought
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(the "INDEMNIFYING PARTY") in writing and the indemnifying party shall assume
the defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all reasonable fees and
expenses of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to both Sections 8(a) and
8(b), the Initial Purchasers shall not be required to assume the defense of such
action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Initial Purchasers).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than 45 business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the reasonable fees and expenses of counsel (in any case where
such reasonable fees and expenses are at the expense of the indemnifying party)
and, prior to the date of such settlement, the indemnifying party shall have
failed to comply with such reimbursement request or failed to deliver its
reasonable objection to such request for indemnification. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable (other than as expressly provided above) to an indemnified party or
insufficient in respect of any
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losses, claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 8(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial Purchasers, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Notes (before deducting expenses) received by
the Company, and the total discounts and commissions received by the Initial
Purchaser bear to the total price to investors of the Notes, in each case as set
forth in the table on the cover page of the Offering Memorandum. The relative
fault of the Company, on the one hand, and the Initial Purchasers, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Initial Purchasers shall be required to contribute any amount in
excess of the amount by which the total price of the Notes purchased by it were
sold to investors in Exempt Resales exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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 Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Notes purchased by each of the Initial Purchasers hereunder
and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of
the Initial Purchasers to purchase the Firm Notes under this Agreement on the
Closing Date and the Additional Notes, if any, on an Option Closing Date are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date or an Option
Closing Date, as the case may be, with the same force and effect as if made on
and as of the Closing Date or an Option Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall notice have been given of any potential or intended change, in the
outlook for any rating of the Company by any such rating organization and (iii)
no such rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the Notes
were marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Offering
Memorandum.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date or an Option Closing Date, as the case may be, signed by the
President and the Chief Financial Officer of the Company, confirming the matters
set forth in Sections 9(a), 9(b) and 9(c).
(e) You shall have received on the Closing Date or an Option Closing
Date, as the case may be, an opinion (satisfactory to you and counsel for the
Initial Purchasers), dated the Closing Date or an Option Closing Date, as the
case may be, of Kirkland & Ellis, counsel for the Company, to the effect that:
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(i) the Company has been duly incorporated and is a corporation
existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority required to carry on its business as,
to such counsel's knowledge, it is currently being conducted and to own,
lease and operate its properties as described in the Offering Memorandum.
The Company is duly qualified to do business as a foreign corporation in
good standing in the State of Michigan, which such counsel has been
informed by the Company is the only State in which the Company is qualified
to do business as a foreign corporation. The Company is the sole record
owner and, to such counsel's knowledge, the sole beneficial owner of all of
the outstanding capital stock of R.J. Tower Corporation, a Michigan
corporation, which is the sole record owner and, to such counsel's
knowledge, the sole beneficial owner of all of the outstanding capital
stock of each of the other subsidiaries of the Company.
(ii) each of the subsidiaries is a corporation existing and in
good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority required to carry on its business as, to
such counsel's knowledge, it is currently being conducted and to own, lease
and operate its properties as described in the Offering Memorandum; each
subsidiary is duly qualified to transact business and is in good standing
as a foreign corporation in the States listed on an exhibit to such
opinion, which such counsel has been informed by the Company are the only
States in which such subsidiaries are qualified to do business as a foreign
corporation.
(iii) all the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable;
(iv) the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (y)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Notes are convertible into Common Stock in accordance
with the terms of the Indenture; the shares of Common Stock initially
issuable upon conversion of
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the Notes have been duly authorized and reserved for issuance upon such
conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; to such counsel's best knowledge,
the issuance of such Common Stock is not subject to any pre-emptive or
similar rights;
(viii) the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(ix) the statements under the captions "Description of Credit
Agreement", "Description of Capital Stock", "Description of Notes" and
"Plan of Distribution" in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all material respects
such legal matters, documents and proceedings;
(x) such counsel is of the opinion ascribed to it in the
Offering Memorandum under the caption "Certain United States Federal Income
Tax Consequences";
(xi) the execution, delivery and performance of this Agreement
and the other Operative Documents by the Company, compliance by the Company
with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require, to such
counsel's knowledge, any consent, approval, authorization or other order of
any court, regulatory body, agency or other governmental body (except such
as may be required under the securities or Blue Sky laws of the various
states as to which such counsel need not express an opinion), (ii) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of its
subsidiaries or the agreements or forms of agreements listed on an exhibit
thereto, (iii) to such counsel's knowledge, violate or conflict with any
laws, administrative regulations or rulings or court decrees applicable to
the Company or its subsidiaries or their properties (except that such
counsel need not express an opinion with respect to federal securities laws
or other laws, rules or regulations relating to misrepresentation or
fraud).
(xii) to such counsel's knowledge there is no legal or
governmental proceeding pending or overtly threatened against the Company
or any of its subsidiaries or to which any of their respective property is
or could be subject, which might result, singly or in the aggregate, in a
Material Adverse Effect.
(xiii) the Company is not and, after giving effect to the offering
and sale of the Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, will not be, an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
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<PAGE>
(xiv) to the best of such counsel's knowledge after due inquiry,
there are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities
of the Company or to require the Company to include such securities with
the Securities registered pursuant to any Registration Statement;
(xv) the Indenture complies as to form in all material respects
with the requirements of the TIA, and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. It is
not necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement or
in connection with the Exempt Resales to qualify the Indenture under the
TIA.
(xvi) no registration under the Act of the Securities is required
for the sale of the Securities to the Initial Purchasers as contemplated by
this Agreement or for the Exempt Resales assuming (i) each Initial
Purchaser is a QIB, an Accredited Institution or a Regulation S Purchaser,
(ii) the accuracy of, and compliance with, the Initial Purchasers'
representations and agreements contained in Section 7 of this Agreement,
(iii) the accuracy of the representations of the Company set forth in
Sections 5(h) and 6(bb) (cc) and (dd) of this Agreement and (iv) with
respect to Accredited Institutions, the accuracy of the representations
made by each such Accredited Institution as set forth in the letter of
representation executed by such Accredited Institution in the form of ANNEX
A to the Offering Memorandum.
(xvii) such counsel has no reason to believe that, as of the date
of the Offering Memorandum or as of the Closing Date, the Offering
Memorandum, as amended or supplemented, if applicable (except for the
financial statements and other financial data included therein, as to which
such counsel need not express any belief) contains any untrue statement of
a material fact 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.
The opinion of Kirkland & Ellis described in Section 9(e) above shall be
rendered to you at the request of the Company and shall so state therein. In
giving such opinion with respect to the matters covered by Section 9(e)(xvii),
Kirkland & Ellis may state that their opinion and belief are based upon their
participation in the preparation of the Offering Memorandum and any amendments
or supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification except as specified.
(f) The Initial Purchasers shall have received on the Closing Date or an
Option Closing Date, as the case may be, an opinion, dated the Closing Date or
the Option Closing Date, as the case may be, of Gardner, Carton & Douglas,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time this
Agreement is executed, at the Closing Date and at the Option Closing Date, if
any, letters dated the date hereof,
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the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to the Initial Purchasers from Arthur Andersen LLP,
independent public accountants, containing the information and statements of the
type ordinarily included in accountants' "comfort letters" to the Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(h) The Notes shall have been approved by the NASD for trading and duly
listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart, conformed
as executed, of the Indenture which shall have been entered into by the Company
and the Trustee.
(j) The Company shall have executed the Registration Rights Agreement
and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company.
(k) The Company shall not have failed at or prior to the Closing Date or
an Option Closing Date, as the case may be, to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company at or prior to the Closing Date or an Option Closing Date, as the case
may be.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto. This Agreement may be terminated at any time prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the judgment of the Initial Purchasers, is material and adverse and, in the
judgment of the Initial Purchasers, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market or (iv) the
declaration of a banking moratorium by either federal or New York State
authorities.
11. DEFAULT BY AN INITIAL PURCHASER. If any one or more of the Initial
Purchasers shall fail or refuse to purchase the Notes which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Notes to be purchased on such date by
all Initial Purchasers, each non-defaulting Initial Purchaser shall be obligated
severally, in the proportion which the principal amount of the Notes set forth
opposite its name in Schedule A bears to the aggregate principal amount of the
Notes which all the non-defaulting Initial Purchasers, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
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case may be, agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the aggregate principal amount of the Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such principal amount of the Notes without the written consent of such Initial
Purchaser. If any Initial Purchaser or Initial Purchasers shall fail or refuse
to purchase the Notes and the aggregate principal amount of the Notes with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of the Notes to be purchased by all Initial Purchasers and
arrangements satisfactory to the Initial Purchasers and the Company for purchase
of such the Notes are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Initial Purchaser and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date or Option Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company to Tower
Automotive, Inc., 4508 IDS Center, Minneapolis, Minnesota 55402, Attention:
Scott Rued and (ii) if to the Initial Purchasers, c/o Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Notes,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchasers, the officers or directors of the
Initial Purchasers, any person controlling the Initial Purchasers, the Company,
the officers or directors of the Company, or any person controlling the Company,
(ii) acceptance of the Notes and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Notes are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Company agrees to reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse
each Initial Purchaser and its officers, directors and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation its rights under this Section 8).
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<PAGE>
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Initial
Purchasers, each Initial Purchaser's directors and officers, any controlling
persons referred to herein, the directors of the Company and its successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Notes from the Initial Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
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<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
Very truly yours,
TOWER AUTOMOTIVE, INC.
By: /S/ CARL E. NELSON
------------------------------
Title: Assistant Secretary
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
PAINEWEBBER INCORPORATED
BT SECURITIES CORPORATION
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /S/ PATRICK J. FALLON
-----------------------------------
Title: Managing Director
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SCHEDULE A
INITIAL PURCHASER PRINCIPAL AMOUNT OF NOTES
- ----------------- -------------------------
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . $43,750,000
Robert W. Baird & Co. Incorporated . . . . . . . . . . . . $43,750,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . $43,750,000
BT Securities Corporation. . . . . . . . . . . . . . . . . $43,750,000
Total. . . . . . . . . . . . . . . . . . . . . . . . . $175,000,000
------------
------------
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SCHEDULE B
SUBSIDIARIES
R.J. Tower Corporation (Michigan)
R.J. Tower Corporation (Kentucky)
R.J. Tower Corporation (Indiana)
Edgewood Manufacturing Corp.
Kalamazoo Stamping and Die Company
Tower Automotive Products, Inc.
Tower Automotive Canada, Inc.
Tower Italia S.R.L.
Tower Automotive do Brazil
Tower Automotive Limited
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EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
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EXHIBIT 4.3
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
Tower Automotive, Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Tower Automotive, Inc.,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing Section 1 of Article Four so that, as amended, said Section 1 of
Article Four shall be and read as follows:
SECTION 1. The total number of shares of capital stock which the
Corporation has authority to issue is 205,000,000 shares, consisting of:
A. 5,000,000 shares of Preferred Stock, par value $1.00 per share,
having such designations, rights, terms, preferences and limitations as the
Board of Directors may determine (the "Undesignated Preferred"); and
B. 200,000,000 shares of Common Stock par value $.01 per share (the
"Common Stock").
All of such shares shall be issued as fully paid and nonassessable
shares, and the holder thereof shall be liable for any further payments in
respect thereof.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, an
annual meeting of the stockholders of said corporation was duly called and held
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said Tower Automotive, Inc. has caused this certificate to
be signed by Anthony A. Barone, an Authorized Officer, this 2nd day of June,
1997.
/s/ Anthony A. Barone
--------------------------------------
Anthony A. Barone
Vice President
<PAGE>
Exhibit 4.5
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- -------------------------------------------------------------------------------
TOWER AUTOMOTIVE, INC.,
ISSUER,
AND
THE BANK OF NEW YORK,
TRUSTEE
------------------------------
INDENTURE
Dated as of July 28, 1997
------------------------------
$200,000,000
5% Convertible Subordinated Notes due 2004
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . .1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Incorporation by Reference of TIA . . . . . . . . . . . . .9
SECTION 1.3. Rules of Construction . . . . . . . . . . . . . . . . . . .9
ARTICLE II. THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.1. Form and Dating . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.2. Execution and Authentication. . . . . . . . . . . . . . . 10
SECTION 2.3. Registrar and Paying Agent. . . . . . . . . . . . . . . . 11
SECTION 2.4. Paying Agent to Hold Assets in Trust. . . . . . . . . . . 12
SECTION 2.5. Securityholder Lists. . . . . . . . . . . . . . . . . . . 12
SECTION 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . 12
SECTION 2.7. Replacement Securities. . . . . . . . . . . . . . . . . . 18
SECTION 2.8. Outstanding Securities. . . . . . . . . . . . . . . . . . 18
SECTION 2.9. Treasury Securities . . . . . . . . . . . . . . . . . . . 19
SECTION 2.10. Temporary Securities. . . . . . . . . . . . . . . . . . . 19
SECTION 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . 20
ARTICLE III. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.1. Right of Redemption . . . . . . . . . . . . . . . . . . . 21
SECTION 3.2. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 21
SECTION 3.3. Selection of Securities to Be Redeemed. . . . . . . . . . 21
SECTION 3.4. Notice of Redemption. . . . . . . . . . . . . . . . . . . 22
SECTION 3.5. Effect of Notice of Redemption. . . . . . . . . . . . . . 23
SECTION 3.6. Deposit of Redemption Price . . . . . . . . . . . . . . . 23
SECTION 3.7. Securities Redeemed in Part . . . . . . . . . . . . . . . 24
ARTICLE IV. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.1. Payment of Securities . . . . . . . . . . . . . . . . . . 24
SECTION 4.2. Maintenance of Office or Agency . . . . . . . . . . . . . 24
SECTION 4.3. Corporate Existence . . . . . . . . . . . . . . . . . . . 25
SECTION 4.4. Payment of Taxes and Other Claims . . . . . . . . . . . . 25
SECTION 4.5. Maintenance of Properties and Insurance . . . . . . . . . 25
SECTION 4.6. Compliance Certificate; Notice of Default . . . . . . . . 26
SECTION 4.7. Reports . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.8. Limitation on Status as Investment Company. . . . . . . . 27
SECTION 4.9. Waiver of Stay, Extension or Usury Laws . . . . . . . . . 27
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SECTION 4.10. Rule 144A Information Requirement . . . . . . . . . . . . 27
ARTICLE V. SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . 27
SECTION 5.1. Limitation on Merger, Sale or Consolidation . . . . . . . 27
SECTION 5.2. Successor Corporation Substituted . . . . . . . . . . . . 28
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . 28
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment . 30
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement
by Trustee. . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.4. Trustee May File Proofs of Claim. . . . . . . . . . . . . 32
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.6. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . 33
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages. . . . . . . . . 34
SECTION 6.9. Rights and Remedies Cumulative. . . . . . . . . . . . . . 34
SECTION 6.10. Delay or Omission Not Waiver. . . . . . . . . . . . . . . 35
SECTION 6.11. Control by Holders. . . . . . . . . . . . . . . . . . . . 35
SECTION 6.12. Waiver of Past Default. . . . . . . . . . . . . . . . . . 35
SECTION 6.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . 36
SECTION 6.14. Restoration of Rights and Remedies. . . . . . . . . . . . 36
ARTICLE VII. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.3. Individual Rights of Trustee. . . . . . . . . . . . . . . 38
SECTION 7.4. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 38
SECTION 7.5. Notice of Default . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.6. Reports by Trustee to Holders . . . . . . . . . . . . . . 39
SECTION 7.7. Compensation and Indemnity. . . . . . . . . . . . . . . . 39
SECTION 7.8. Replacement of Trustee. . . . . . . . . . . . . . . . . . 40
SECTION 7.9. Successor Trustee by Merger, Etc. . . . . . . . . . . . . 41
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . 41
SECTION 7.11. Preferential Collection of Claims Against Company . . . . 41
ARTICLE VIII. SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . 42
SECTION 8.1. Satisfaction and Discharge of Indenture . . . . . . . . . 42
SECTION 8.2. Repayment to the Company. . . . . . . . . . . . . . . . . 42
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . 42
SECTION 9.1. Supplemental Indentures Without Consent of Holders. . . . 42
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SECTION 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders. . . . . . . . . . . . . . . . . . . . 43
SECTION 9.3. Compliance with TIA . . . . . . . . . . . . . . . . . . . 44
SECTION 9.4. Revocation and Effect of Consents . . . . . . . . . . . . 44
SECTION 9.5. Notation on or Exchange of Securities . . . . . . . . . . 45
SECTION 9.6. Trustee to Sign Amendments, Etc . . . . . . . . . . . . . 45
ARTICLE X. MEETINGS OF SECURITYHOLDERS . . . . . . . . . . . . . . . . 46
SECTION 10.1. Purposes for Which Meetings May Be Called . . . . . . . . 46
SECTION 10.2. Manner of Calling Meetings. . . . . . . . . . . . . . . . 46
SECTION 10.3. Calling of Meetings by the Company or Holders . . . . . . 46
SECTION 10.4. Who May Attend and Vote at Meetings . . . . . . . . . . . 47
SECTION 10.5. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment . . . . . . . . . . . 47
SECTION 10.6. Voting at the Meeting and Record to Be Kept . . . . . . . 48
SECTION 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting. . . . . . . . . . 48
ARTICLE XI. RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL. . . . 49
SECTION 11.1. Repurchase of Securities at Option of the Holder
Upon a Change of Control. . . . . . . . . . . . . . . . . 49
SECTION 11.2. Rescission of Change of Control Determination.. . . . . . 51
ARTICLE XII. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12.1. Securities Subordinated to Senior Indebtedness. . . . . . 51
SECTION 12.2. No Payment on Securities in Certain Circumstances . . . . 52
SECTION 12.3. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation
or Reorganization . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders
of Senior Indebtedness. . . . . . . . . . . . . . . . . . 54
SECTION 12.5. Obligations of the Company Unconditional. . . . . . . . . 55
SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.7. Application by Trustee of Assets Deposited with It. . . . 55
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness. . . . . 56
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities . . . . . . . . . . . . . . . 56
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness. . . . . . . 57
SECTION 12.11. Article XII Not to Prevent Events of Default. . . . . . . 57
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE XIII. CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . . 57
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SECTION 13.1. Conversion Privilege. . . . . . . . . . . . . . . . . . . 57
SECTION 13.2. Exercise of Conversion Privilege. . . . . . . . . . . . . 58
SECTION 13.3. Fractional Interests. . . . . . . . . . . . . . . . . . . 59
SECTION 13.4. Conversion Price. . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.5. Adjustment of Conversion Price. . . . . . . . . . . . . . 59
SECTION 13.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or
Sale of Assets. . . . . . . . . . . . . . . . . . . . . . 64
SECTION 13.7. Notice of Certain Events. . . . . . . . . . . . . . . . . 65
SECTION 13.8. Taxes on Conversion . . . . . . . . . . . . . . . . . . . 66
SECTION 13.9. Company to Provide Stock. . . . . . . . . . . . . . . . . 66
SECTION 13.10. Disclaimer of Responsibility for Certain Matters. . . . . 67
SECTION 13.11. Return of Funds Deposited for Redemption of Converted
Securities. . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XIV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 14.1. TIA Controls. . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 14.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 14.3. Communications by Holders with Other Holders. . . . . . . 68
SECTION 14.4. Certificate and Opinion as to Conditions Precedent. . . . 69
SECTION 14.5. Statements Required in Certificate or Opinion . . . . . . 69
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar . . . . . . . . 69
SECTION 14.7. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 69
SECTION 14.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 14.9. No Adverse Interpretation of Other Agreements . . . . . . 70
SECTION 14.10. No Recourse Against Others. . . . . . . . . . . . . . . . 70
SECTION 14.11. Successors. . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 14.12. Duplicate Originals . . . . . . . . . . . . . . . . . . . 71
SECTION 14.13. Severability. . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 14.14. Table of Contents, Headings, Etc. . . . . . . . . . . . . 71
SECTION 14.15. Qualification of Indenture. . . . . . . . . . . . . . . . 71
SECTION 14.16. Registration Rights . . . . . . . . . . . . . . . . . . . 71
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
- ------- ---------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.8;
7.10;
14.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 14.3
(c) 14.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6;
14.2
(d) 7.6
314(a) 4.6;
13.2
(b) N.A.
(c)(1) 2.2;
7.2;
14.4
(c)(2) 7.2;
14.4
(c)(3) N.A.
(d) N.A.
(e) 14.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5;
7.6;
14.2
(c) 7.1(a)
(d) 2.8;
6.11;
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7.1(b)(c)
(e) 6.14
316(a) (last sentence) 2.9
(a)(1)(A) 6.11
(a)(1)(B) 6.12
(a)(2) N.A.
(b) 6.12;
6.7
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
______________________
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed a part
of the Indenture.
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INDENTURE, dated as of July 28, 1997, between TOWER AUTOMOTIVE, INC., a
Delaware corporation (the "Company"), and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 5% Convertible
Subordinated Notes due 2004:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACCELERATION NOTICE" shall have the meaning specified in Section 6.2.
"AFFILIATE" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, (ii)
any spouse, immediate family member, or other relative who has the same
principal residence of any person described in clause (i) above, and (iii) any
trust in which any person described in clause (i) or (ii) above has a beneficial
interest. For purposes of this definition, the term "control" means the power
to direct the management and policies of a person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract, or otherwise.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar Federal, state
or foreign law for the relief of debtors.
"BENEFICIAL OWNER" for purposes of the definition of Change of Control has
the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act (as
in effect on the Issue Date), whether or not applicable, except that a "person"
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time or upon the occurrence of certain events.
"BOARD OF DIRECTORS" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"BOARD RESOLUTION" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
<PAGE>
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person is a
party that is required to be classified and accounted for as a capital lease
obligation under GAAP.
"CAPITAL STOCK" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"CASH" means such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts.
"CHANGE OF CONTROL" means (i) an event or series of events as a result of
which any "person" or "group" (as such terms are used in Sections 13(d)(3) and
14(d) of the Exchange Act) (excluding the Company or any wholly-owned subsidiary
thereof) is or becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and l3d-5 under the Exchange Act, whether or not
applicable) of more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of the Company or any successor entity
("Voting Stock"), (ii) the completion of any consolidation with or merger of the
Company into any other Person, or sale conveyance, transfer or lease by the
Company of all or substantially all of its assets to any Person, or any merger
of any other Person into the Company in a single transaction or series of
related transactions, and, in the case of any such transaction or series of
related transactions, the outstanding Common Stock of the Company is changed or
exchanged as a result, 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 Person resulting from such transaction in substantially
the same proportion as their ownership of the Voting Stock immediately before
such transaction, or (iii) such time as 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 (x) the last sale price
of the Common Stock for any five Trading Days during the 10 Trading Days
immediately preceding the Change of Control is at least equal to 105% of the
Conversion Price in effect on such day, or (y) with respect to a merger or
consolidation otherwise constituting a Change of Control described in clause
(ii) above, at least 90% of the consideration in such transaction or
transactions consists of common stock or securities convertible into common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for quotation on the Nasdaq National Market.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMMON STOCK" means the Company's common stock, par value $.01 per share,
or as such stock may be reconstituted from time to time.
"COMPANY" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture, and thereafter means such successor.
"CONTINUING DIRECTOR" means at any date a member of the Company's Board of
Directors (i) who was a member of such board on the date of initial issuance of
the Securities or (ii) who was nominated or elected by at least a majority of
the directors who were Continuing Directors at the time of such nomination or
election or whose election to the Company's Board of Directors was recommended
or endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
"CONVERSION PRICE" shall have the meaning specified in Section 13.5.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"DAMAGES PAYMENT DATE" shall have the meaning specified in the Registration
Rights Agreement.
"DATE OF CONVERSION" shall have the meaning specified in Section 13.2.
"DEFAULT" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DEFINITIVE SECURITIES" means Securities that are in the form of Security
attached hereto as Exhibit A that do not include the information called for by
footnotes 1 and 3 thereof.
"DEPOSITARY" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"DISQUALIFIED CAPITAL STOCK" means, with respect to the Company, Capital
Stock of the Company that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased (including at the option of the holder thereof) by the Company, in
whole or in part, on or prior to the Stated Maturity of the Notes, provided that
only the portion of such Capital Stock which is so convertible, exercisable,
exchangeable or redeemable or subject to repurchase prior to such Stated
Maturity shall be deemed to be Disqualified Capital Stock.
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"DTC" shall have the meaning specified in Section 2.3.
"EVENT OF DEFAULT" shall have the meaning specified in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"EXPIRATION TIME" shall have the meaning specified in Section 13.5.
"GAAP" means United States 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 ("FASB") or in such
other statements by such other entity as approved by a significant segment of
the accounting profession which are in effect in the United States; PROVIDED,
HOWEVER, that for purposes of determining compliance with covenants in the
Indenture, "GAAP" means such generally accepted accounting principles which are
in effect as of the Issue Date.
"GLOBAL SECURITY" means a Security that contains the paragraph referred to
in footnote 1 and the additional schedule referred to in footnote 3 to the form
of Security attached hereto as Exhibit A. There shall be separate Global
Securities, with separate CUSIP Numbers, to evidence interests (x) in the
Securities held by "qualified institutional buyers," as defined in Rule 144A
under the Securities Act, (y) in the Securities held by "accredited investors"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act,
and (z) by persons who acquired their interest in the Securities in compliance
with Regulation S under the Securities Act.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a Security is
registered on the Registrar's books.
"INDEBTEDNESS" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by credit or loan agreements, bonds, notes, debentures or similar instruments
(including, without limitation, notes or similar instruments given in connection
with the acquisition or any business, properties or assets of any kind), (iii)
evidenced by bankers' acceptances or similar instruments issued or accepted by
banks, (iv) for the payment of money relating to a Capitalized Lease Obligation
(as defined), or (v) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (b) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (c) all net obligations
of such person under Interest Swap and Hedging Obligations (as defined); (d) all
liabilities of others of the kind described in the preceding clause (a), (b) or
(c) that such person has guaranteed or that is otherwise its legal liability, or
which is secured by a lien on property of such person, and all obligations to
purchase, redeem or acquire any Capital Stock; and (e) any and all deferrals,
renewals, extensions, replacements, restatements, refinancings and
4
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refundings (whether direct or indirect) of, or any indebtedness or obligation
issued in exchange for, any liability of the kind described in any of the
preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"INITIAL PURCHASERS" means Donaldson, Lufkin & Jenrette Securities
Corporation, Robert W. Baird & Co., Incorporated, PaineWebber Incorporated and
BT Securities Corporation.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Securities.
"INTEREST SWAP AND HEDGING OBLIGATION" means the obligations of any Person
under any interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement or other interest rate hedge agreement, interest rate collar agreement
or other similar agreement or arrangement to which such Person is a party or
beneficiary.
"ISSUE DATE" means the date of first issuance of the Securities under this
Indenture.
"JUNIOR SECURITIES" means any Qualified Capital Stock and any Indebtedness
of the Company that is fully subordinated in right of payment to the Securities
and has no scheduled installment of principal due, by redemption, sinking fund
payment or otherwise, on or prior to the Stated Maturity of the Securities.
"LAST SALE PRICE" shall have the meaning specified in Section 13.3.
"LEGAL HOLIDAY" shall have the meaning specified in Section 14.7.
"LIEN" means any mortgage, lien, pledge, charge, security interest or other
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement and any lease deemed to constitute a security interest and any option
or other agreement to give any security interest).
"LIQUIDATED DAMAGES" shall have the meaning specified in the Registration
Rights Agreement.
"NON-ELECTING SHARE" shall have the meaning specified in Section 13.6.
"NOTICE OF DEFAULT" shall have the meaning specified in Section 6.1(3), (4)
or (5).
"OFFER" shall have the meaning specified in Section 13.5.
5
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"OFFICER" means, with respect to the Company, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer, the Treasurer,
the Controller, the Secretary or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means, with respect to the Company, a certificate
signed by two Officers or by an Officer and an Assistant Secretary of the
Company and otherwise complying with the requirements of Sections 14.4 and 14.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and which complies with the requirements of
Sections 14.4 and 14.5.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PAYMENT BLOCKAGE PERIOD" shall have the meaning specified in Section 12.2.
"PAYMENT DEFAULT" shall have the meaning specified in Section 12.2.
"PAYMENT NOTICE" shall have the meaning specified in Section 12.2.
"PERSON" or "PERSON" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"PRINCIPAL" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such Indebtedness.
"PROPERTY" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"PURCHASE AGREEMENT" means that certain Purchase Agreement, dated July 23,
1997, by and among the Company and the Initial Purchasers, as such agreement may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
"PURCHASED SHARES" shall have the meaning specified in Section 13.5.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"RECORD DATE" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day.
"REDEMPTION DATE," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security.
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"REDEMPTION PRICE," when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Security, which shall include, without duplication, in each case,
accrued and unpaid interest and Liquidated Damages, if any, to and including the
Redemption Date.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated the date hereof, by and among the Initial Purchasers and the Company, as
such agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"REPURCHASE DATE" shall have the meaning specified in Section 11.1.
"REPURCHASE OFFER" shall have the meaning specified in Section 11.1.
"REPURCHASE PRICE" shall have the meaning specified in Section 11.1.
"REPURCHASE PUT DATE" shall have the meaning specified in Section 11.1.
"RESTRICTED SECURITY" means a Security, unless or until it has been (i)
disposed of in a transaction effectively registered under the Securities Act or
(ii) distributed to the public pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act; provided, that in no case shall a
Security issued in accordance with this Indenture and the terms and provisions
of the Registration Rights Agreement be a Restricted Security.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the 5% Convertible Subordinated Notes due
2004, as supplemented from time to time in accordance with the terms hereof,
issued under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SECURITIES CUSTODIAN" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"SENIOR INDEBTEDNESS" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company, unless the instrument creating or evidencing such Indebtedness provides
that such Indebtedness is not senior or superior in right of payment to the
Securities or which is PARI PASSU with, or subordinated to, the Securities;
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provided that in no event shall Senior Indebtedness include (a) Indebtedness of
the Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness representing or with respect to any account payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services, (c) any
liability for taxes owed or owing by the Company or any Subsidiary of the
Company or (d) Indebtedness of the Company under the convertible subordinated
notes issued in connection with its acquisition of Edgewood Tool and
Manufacturing Company and its affiliate, Ann Arbor Assembly Corporation.
"SHELF REGISTRATION STATEMENT" shall have the meaning specified in the
Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1.02(w) of Regulation S-X
promulgated by the Commission as in effect as of the date of the Indenture.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"STATED MATURITY," when used with respect to any Security, means August 1,
2004.
"SUBSIDIARY" with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one or
more Subsidiaries of such person, (ii) a partnership in which such person or a
Subsidiary of such person is, at the time, a general partner, or (iii) any other
person (other than a corporation) in which such person, one or more Subsidiaries
of such person, or such person and one or more Subsidiaries of such person,
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"TRADING DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the Nasdaq National
Market (or, if the Common Stock is not admitted to trading thereon, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading).
"TRANSFER RESTRICTED SECURITIES" means Securities that bear or are required
to bear the legend set forth in Section 2.6 hereof
"TRUSTEE" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
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"TRUST OFFICER" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons who
at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of, or
noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such 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 SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and any other
obligor on the Securities.
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 and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
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(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II.
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, which Exhibit
is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Security for the Company by manual or facsimile signature. The
Company's seal may be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security but such
signature shall be conclusive evidence that the Security has been authenticated
pursuant to the terms of this Indenture.
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The Trustee shall authenticate the Securities for original issue in the
aggregate principal amount of up to $200,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on which
the Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $200,000,000, except as
provided in Section 2.7; PROVIDED, that Securities in excess of $175,000,000
shall not be issued other than pursuant to the over-allotment option granted by
the Company to the Initial Purchasers as provided in the Purchase Agreement.
Upon the written order of the Company in the form of an Officers' Certificate,
the Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
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. An authenticating agent has the same rights as an
Agent to deal with the Company, any Affiliate of the Company, or any of their
respective Subsidiaries.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of Manhattan,
The City of New York, where Securities may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent") and where notices and demands to
or upon the Company in respect of the Securities may be served. The Company may
act as Registrar or Paying Agent, except that, for the purposes of Articles III,
VIII and XI and as otherwise specified in the Indenture, neither the Company nor
any Affiliate of the Company shall act as 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 hereby initially appoints the Trustee as Registrar and Paying Agent, and
the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
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The Company initially appoints the Trustee to act as Securities Custodian
with respect to the Global Securities.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all assets held by the Paying Agent for the payment of principal
of, premium, if any, interest on or Liquidated Damages with respect to, the
Securities (whether such assets have been distributed to it by the Company or
any other obligor on the Securities), and shall notify the Trustee in writing of
any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed.
Upon distribution to the Trustee of all assets that shall have been delivered by
the Company to the Paying Agent, the Paying Agent (if other than the Company or
an Affiliate of the Company) shall have no further liability for such assets.
SECTION 2.5. 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. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment Date
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 reasonably may require of the names and
addresses of Holders.
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Registrar or a co-Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for transfer or
exchange:
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(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Transfer Restricted Securities that are Definitive
Securities, shall be accompanied by the following additional information and
documents, as applicable:
(A) if such Transfer Restricted Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially
the form set forth on the reverse of the Security); or
(B) if such Transfer Restricted Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act, a
certification to that effect (in substantially the form set forth on the
reverse of the Security); or
(C) if such Transfer Restricted Security is being transferred in
accordance with Regulation S under the Securities Act, a certification to
that effect (in substantially the form set forth on the reverse of the
Security);
(D) if such Transfer Restricted Security is being transferred to an
institutional investor that is an "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, a
certification to that effect (in substantially the form set forth on the
reverse of the Security) accompanied by a certificate in the form of
Exhibit B to the Indenture to the Trustee; or
(E) if such Transfer Restricted Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the form
set forth on the reverse of the Security) accompanied by a customary
opinion of counsel substantially to the effect that such transfer may be
effected in reliance upon such exemption.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer in
form reasonably satisfactory to the Company and the Registrar or Co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing,
together with:
(i) if such Definitive Security is a Transfer Restricted Security,
certification, substantially in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (x) to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or
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(y) to an institutional investor that is an "accredited investor" (within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or
(z) in accordance with Regulation S under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the applicable Global Security;
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the appropriate Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and the Trustee shall authenticate an
appropriate new Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary from the Depositary
or its nominee on behalf of any Person having a beneficial interest in a
Global Security and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depositary or the Person
designated by the Depositary as having such a beneficial interest in a
Transfer Restricted Security only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act,
a certification to that effect from the transferor (in substantially
the form set forth on the reverse of the Security); or
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(C) if such beneficial interest is being transferred in
accordance with Regulation S under the Securities Act, a certification
to that effect (in substantially the form set forth on the reverse of
the Security);
(D) if such Transfer Restricted Security is being
transferred to an institutional investor that is an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, a certification to that effect (in substantially
the form set forth on the reverse of the Security) accompanied by a
certificate in the form of Exhibit B to the Indenture to the Trustee;
or
(E) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect from the transferee
or transferor (in substantially the form set forth on the reverse of
the Security) accompanied by a customary opinion of counsel
substantially to the effect that such transfer may be effected in
reliance upon such exemption;
then the Trustee or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an authentication order
in the form of an Officers' Certificate, the Trustee will authenticate and make
available for delivery to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
make such Definitive Securities available for delivery to the persons in
whose names such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITARY.
If at any time:
(i) the Depositary for the Securities notifies the Company and
the Company notifies the Trustee in writing that the Depositary is no
longer willing or able to continue as Depositary for the Global
Securities and a successor Depositary for the Global
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Securities is not appointed by the Company within 90 days after delivery
of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities under
this Indenture;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will authenticate and make available for delivery Definitive Securities, in an
aggregate principal amount equal to the principal amount of the Global
Securities, in exchange for such Global Securities.
(g) LEGENDS.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE THIRD SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT)(A "QIB"), (B) IT IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
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AGGREGATE PRINCIPAL AMOUNT OF NOTES, OR COMMON STOCK HAVING A MARKET VALUE,
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security or that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a Definitive Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security in the case of a sale or transfer
pursuant to Rule 144 under the Securities Act, after delivery of a
customary opinion of counsel; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only to the
provisions of Section 2.6(c) hereof).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such time
as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or cancelled, such Global Security
shall be returned to or retained and cancelled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
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(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments,
or similar governmental charge payable upon exchanges or transfers pursuant
to Section 2.2 (fourth paragraph), 2.10, 3.7, 9.5, or 11.1 (final
paragraph)).
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Definitive Security being redeemed in part,
or (b) any Security for a period beginning 15 days before the mailing of a
notice of an offer to repurchase pursuant to Article XI hereof or the
mailing of a notice of redemption of Securities pursuant to Article III
hereof and ending at the close of business on the day of such mailing.
SECTION 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims and submits an affidavit or other evidence, satisfactory to the
Trustee, to the Trustee to the effect that the Security has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Security if the Trustee's requirements are met. If required by
the Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge such Holder for
its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee (including any Security represented by a Global
Security) except those cancelled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Security effected by the Trustee
hereunder and those described in this Section 2.8 as not outstanding. A
Security does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Security, except as provided in Section 2.9.
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If a Security is replaced pursuant to Section 2.7 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Security is held by
a BONA FIDE purchaser. A mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate of the Company) holds Cash or U.S. Government Obligations sufficient
to pay all of the principal and interest due on the Securities payable on that
date in accordance with Section 3.6 hereof and payment of the Securities called
for redemption is not otherwise prohibited pursuant to Article XII hereof or
otherwise, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company reasonably and in good faith considers appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Securities in exchange for
temporary Securities. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as permanent
Securities authenticated and delivered hereunder.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration, transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and return all Securities surrendered for transfer, exchange,
payment or cancellation to the Company. Subject to Section 2.7, the Company may
not issue new Securities to replace Securities that have been paid or delivered
to the Trustee for cancellation. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section 2.11,
except as expressly permitted in the form of Securities and as permitted by this
Indenture.
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SECTION 2.12. DEFAULTED INTEREST.
Interest on any 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 Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date plus, to the extent lawful,
any interest payable on the defaulted interest (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities (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
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of Cash 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 Cash when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as provided in this clause (1). 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 at his 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 mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective predecessor Securities) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the 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 shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section 2.12, each Security
delivered under this Indenture upon 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.
ARTICLE III.
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by any provision of this Indenture,
shall be made in accordance with Paragraph 5 of the Securities and this Article
III. The Company will not have the right to redeem any Securities prior to
August 1, 2000. On or after August 1, 2000, the Company will have the right to
redeem all or any part of the Securities at the Redemption Prices specified in
Paragraph 5 therein under the caption "Redemption," in each case including
accrued and unpaid interest to the Redemption Date.
SECTION 3.2. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
principal amount of Securities to be redeemed, the Redemption Price and whether
it wants the Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to be
redeemed pursuant to Paragraph 5 of the Securities by crediting against any such
redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee of the amount of the reduction and
deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee). Any such notice may be cancelled at any
time prior to notice of such redemption being mailed to any Holder and shall
thereby be void and of no effect.
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to Paragraph
5 thereof, the Trustee shall select the Securities to be redeemed on a PRO RATA
basis, by lot or by such other method as the Trustee shall determine to be fair
and appropriate.
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in
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whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.4. NOTICE OF REDEMPTION.
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 the Trustee and each Holder whose Securities are to be redeemed at such
Holder's address as it appears on the security register maintained by the
Registrar. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date, and that the Securities called for
redemption may not be converted after the fifth Business Day prior to the
Redemption Date;
(2) the Redemption Price, including the amount of accrued and unpaid
interest and Liquidated Damages, if any, to be paid upon such redemption;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless (a) the Company defaults in its obligation to
deposit Cash with the Paying Agent in accordance with Section 3.6 hereof or
(b) such redemption payment is prohibited pursuant to Article XII hereof or
otherwise, interest on, and Liquidated Damages with respect to, Securities
called for redemption ceases to accrue on and after the Redemption Date and
the only remaining right of the Holders of such Securities is to receive
payment of the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, upon surrender to the
Paying Agent of the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Security to be redeemed and that, on or after the Redemption Date, upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
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(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4 and
pursuant to the redemption provisions of Paragraph 5 of the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price, including accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date; PROVIDED that if the Redemption Date is
after a regular Record Date and on or prior to the corresponding Interest
Payment Date or Damage Payment Date, the accrued interest and Liquidated
Damages, if any, shall be payable to the Holder of the redeemed Securities
registered on the relevant Record Date; and PROVIDED, FURTHER, that if a
Redemption Date is a Legal Holiday, payment shall be made on the next succeeding
Business Day and no interest or Liquidated Damages shall accrue for the period
from such Redemption Date to such succeeding Business Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) Cash
sufficient to pay the Redemption Price of, including accrued and unpaid interest
on, and Liquidated Damages with respect to, all Securities to be redeemed on
such Redemption Date (other than Securities or portions thereof called for
redemption on that date that have been delivered by the Company to the Trustee
for cancellation). The Paying Agent shall promptly return to the Company any
Cash so deposited which is not required for that purpose upon the written
request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or otherwise, interest and
Liquidated Damages on the Securities to be redeemed will cease to accrue on the
applicable Redemption Date, whether or not such Securities are presented for
payment. Notwithstanding anything herein to the contrary, if any Security
surrendered for redemption in the manner provided in the Securities shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, Liquidated Damages shall continue to accrue
and be paid from the Redemption Date in accordance with Section 4 of the
Registration Rights Agreement and interest shall continue to accrue and be paid
from the Redemption Date until such payment is made on the unpaid principal,
and, to the extent lawful, on any interest not paid on such unpaid principal, in
each case at the rate and in the manner provided in Section 4.1 hereof and the
Security.
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SECTION 3.7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the Holder, without service charge to the Holder, a new Security or
Securities equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of, interest on, and Liquidated Damages
with respect to, the Securities on the dates and in the manner provided in the
Securities and the Registration Rights Agreement, as applicable. An installment
of principal of, interest on, or Liquidated Damages with respect to, the
Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, Cash deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange and for conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
14.2.
The Company may also from time to time designate one or more other offices
or agencies where the Securities 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 the Borough of
Manhattan, The City of New York, for such purposes. The Company shall 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. The Company
hereby initially designates the corporate trust office of the Trustee as such
office.
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SECTION 4.3. CORPORATE EXISTENCE.
Subject to Article V, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate or other existence of each of its Subsidiaries in accordance
with the respective organizational documents of each of them and the rights
(charter and statutory) and corporate franchises of the Company and each of its
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to
preserve, with respect to itself, any right or franchise, and with respect to
any of its Subsidiaries, any such existence, right or franchise, if (a) the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of such entity and (b) the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 4.4. PAYMENT OF TAXES AND OTHER CLAIMS.
Except with respect to immaterial items, the Company shall, and shall cause
each of its Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or any of their respective properties and assets and (ii) all
lawful claims, whether for labor, materials, supplies, services or anything
else, which have become due and payable and which by law have or may become a
Lien upon the property and assets of the Company or any of its Subsidiaries;
PROVIDED, HOWEVER, that neither the Company nor any Subsidiary shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been established in accordance with GAAP.
SECTION 4.5. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in their reasonable judgment may be necessary, so
that the business carried on in connection therewith may be properly conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section 4.5 shall prevent
the Company or any Subsidiary from discontinuing any operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is (a), in the judgment of the Company, desirable in the conduct of the
business of such entity and (b) not disadvantageous in any material respect to
the Holders.
The Company shall provide, or cause to be provided, for itself and each of
its Subsidiaries, insurance (including appropriate self-insurance) against loss
or damage of the kinds that, in the reasonable, good faith opinion of the
Company is adequate and appropriate for the conduct of the business of the
Company and such Subsidiaries in a prudent manner, with (except
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for self-insurance) reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be customary, in the reasonable,
good faith opinion of the Company and adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner for
entities similarly situated in the industry, unless failure to provide such
insurance (together with all other such failures) would not have a material
adverse effect on the financial condition or results of operations of the
Company or such Subsidiary.
SECTION 4.6. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company or
any Subsidiary of the Company to comply with any conditions or covenants in this
Indenture and, if such signor does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers'
Certificate shall also notify the Trustee should the relevant fiscal year end on
any date other than the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default, Event of Default or fact which would prohibit the making of any payment
to or by the Trustee in respect of the Securities, an Officers' Certificate
specifying such Default, Event of Default or fact and what action the Company is
taking or proposes to take with respect thereto. The Trustee shall not be
deemed to have knowledge of any Default, any Event of Default or any such fact
unless one of its Trust Officers receives notice thereof from the Company or any
of the Holders.
SECTION 4.7. REPORTS.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee, within 15 days after it is or would have been required to file such
with the SEC, annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the SEC if the Company was subject to the requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual
information only, a report thereon by the Company's certified independent public
accountants as such would be required in such reports to the SEC and, in each
case, together with a management's discussion and analysis of financial
condition and results of operations which would be so required.
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SECTION 4.8. LIMITATION ON STATUS AS INVESTMENT COMPANY.
Neither the Company nor any of its Subsidiaries shall become an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment Company
Act.
SECTION 4.9. 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, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of, premium of, interest on, or Liquidated Damages with
respect to, the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company 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.
SECTION 4.10. RULE 144A INFORMATION REQUIREMENT.
The Company shall furnish, within a reasonable period of time, to the
Holders or beneficial holders of the Securities or the underlying Common Stock
and prospective purchasers of Securities or the underlying Common Stock
designated by the Holders of Transfer Restricted Securities, upon their written
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act until such time as the Shelf Registration Statement has
become effective under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of the Shelf
Registration Statement.
ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
(a) The Company shall not, directly or indirectly, consolidate with
or merge with or into another Person or sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons (other than to its wholly-owned subsidiaries),
unless (i) either (a) in the case of a merger or consolidation, the Company is
the surviving entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and the
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately before or after giving effect on a PRO FORMA basis to such
transaction; and (iii) the
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Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and, if a
supplemental indenture is required, such supplemental indenture comply with the
Indenture and that all conditions precedent relating to such transactions have
been satisfied.
(b) For purposes of clause (a) of this Section 5.1, the sale, lease,
conveyance, assignment, transfer, or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any sale, lease, conveyance or transfer
of all or substantially all of the assets of the Company in accordance with the
foregoing, the successor corporation formed by such consolidation or into which
the Company is merged or to which such sale, lease, conveyance or transfer is
made, shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under the Indenture with the same effect as if such
successor corporation had been named therein as the Company, and when a
successor corporation duly assumes all of the obligations of the Company
pursuant hereto and pursuant to the Securities, the predecessor shall be
released from such obligations (except with respect to any obligations that
arise from or as a result of such transaction).
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay any installment of interest on, or Liquidated
Damages with respect to, the Securities as and when the same becomes due
and payable, or to perform any conversion of the Securities required under
this Indenture, and the continuance of such default for a period of 30
days, whether or not such payment is prohibited by Article XII;
(2) failure to pay all or any part of the principal of, or premium,
if any on the Securities when and as the same become due and payable at
maturity, redemption, by acceleration or otherwise, including, without
limitation, failure to pay all or any part of
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the Repurchase Price on the Repurchase Date in accordance with Article XI,
whether or not such payment is prohibited by Article XII;
(3) failure by the Company to observe or perform any covenant or
agreement contained in the Securities or this Indenture (other than a
default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section 6.1), and continuance of
such failure for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by Holders of at least 25% in aggregate principal
amount of the then outstanding Securities, a written notice specifying such
default or breach, requesting it to be remedied and stating that such
notice is a "Notice of Default" hereunder;
(4) failure by the Company or any Significant Subsidiary to pay
principal, premium or interest when due (after giving effect to any
applicable period of grace) at maturity of any Indebtedness (other than
non-recourse obligations), in an amount in excess of $25,000,000 and the
continuance of such failure for 30 days after there has been given, by
registered or certified mail, to the Company or to the Trustee by the
Holders of at least 25% in aggregate principal amount of the then
outstanding Securities, a written notice specifying such default,
requesting that it be remedied and stating that such notice is a "Notice of
Default" hereunder;
(5) default by the Company or any Significant Subsidiary with respect
to any Indebtedness (other than non-recourse obligations), which default
results in the acceleration of Indebtedness having a principal amount in
excess of $25,000,000 without such Indebtedness having been discharged or
such acceleration having been rescinded or annulled for 30 days after there
has been given, by registered or certified mail, to the Company or to the
Trustee by the Holders of at least 25% in aggregate principal amount of the
then outstanding Securities, a written notice specifying such default,
requesting that it be remedied and stating that such notice is a "Notice of
Default" hereunder;
(6) a decree, judgment, or order by a court of competent jurisdiction
shall have been entered adjudging the Company or any of its Significant
Subsidiaries as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company or any of its Significant
Subsidiaries under any bankruptcy or similar law, and such decree or order
shall have continued undischarged and unstayed for a period of 60 days; or
a decree or order of a court of competent jurisdiction over the appointment
of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency
of the Company, any of its Significant Subsidiaries, or of the property of
any such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of 60
days;
(7) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking
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reorganization under any bankruptcy or similar law or similar statute, or
shall consent to the filing of any such petition, or shall consent to the
appointment of a Custodian, receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of it or any of its assets or property, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or
shall, within the meaning of any Bankruptcy Law, become insolvent, fail
generally to pay its debts as they become due, or take any corporate action
in furtherance of or to facilitate, conditionally or otherwise, any of the
foregoing; or
(8) final unsatisfied judgments not covered by insurance, or the
issuance of any warrant of attachment against any portion of the property
or assets of the Company or any of its Significant Subsidiaries,
aggregating in excess of $25,000,000 at any one time shall have been
rendered against the Company or any of its Significant Subsidiaries and not
have been stayed, bonded or discharged for a period (during which execution
shall not be effectively stayed) of 60 days (or, in the case of any such
final judgment which provides for payment over time, which shall so remain
unstayed, unbonded or undischarged beyond any applicable payment date
provided therein).
Notwithstanding the 60-day period and notice requirement contained in
Section 6.1(3) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(3) shall be deemed to have begun as of the
date the Change of Control notice is required to be sent in the event that the
Company has not complied with the provisions of Section 11.1 and the Trustee or
Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the Notice of Default referred to in Section 6.1(3) to the
Company and, if applicable, the Trustee; PROVIDED, HOWEVER, that if the breach
or default is a result of a default in the payment when due of the Repurchase
Price on the Repurchase Date, such Event of Default shall be deemed, for
purposes of this Section 6.1, to arise no later than on the final Repurchase
Payment Date.
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
6.1(6) or (7) relating to the Company) occurs and is continuing, then in every
such case, unless the principal of all of the Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of then outstanding Securities, by a notice in
writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Securities (or
the Repurchase Price if the Event of Default includes failure to pay the
Repurchase Price, determined as set forth below), including in each case accrued
interest thereon and Liquidated Damages with respect thereto, to be due and
payable immediately. If an Event of Default specified in Section 6.1(6) or (7)
relating to the Company occurs, all principal, accrued interest thereon and
Liquidated Damages with respect thereto will be immediately due and payable on
all outstanding Securities without any declaration or other act on the part of
Trustee or the Holders.
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At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of no less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on, and Liquidated Damages with respect
to, all Securities,
(B) the principal of (and premium, if any, applicable to) any
Securities which would then be due otherwise than by such declaration
of acceleration, and interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest and Liquidated Damages at the rate
borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, interest on and Liquidated Damages with
respect to Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12,
including, if applicable, any Event of Default relating to the covenants
contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent Default or Event of
Default or impair any right consequent thereon.
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of principal,
premium, interest or Liquidated Damages specified in clause (1) or (2) of
Section 6.1 occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal, premium (if any),
interest, Liquidated Damages and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium, if
any), Liquidated Damages and on any overdue interest, at the rate borne by the
Securities, and, in
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addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. 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, interest or Liquidated
Damages) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any), interest and Liquidated Damages 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 agent and counsel) and of
the Holders allowed in such judicial proceeding, and
(2) 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
other similar official in any such judicial proceeding is hereby authorized by
each Holder 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, to
pay to 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.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium (if
any), interest or Liquidated Damages, upon presentation of the Securities and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the extent
provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any), interest on and Liquidated Damages with respect
to, the Securities in respect 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 for principal, premium (if any),
interest and Liquidated Damages, respectively; and
FOURTH: To whomsoever may be lawfully entitled thereto, the remainder, if
any.
SECTION 6.7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
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(B) the Holders of not less than 25 % in principal amount of then
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred or
reasonably probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(E) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of then outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, INTEREST AND LIQUIDATED DAMAGES.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, and premium (if any), interest on and Liquidated
Damages with respect to, such Security when due (including, in the case of
redemption, the Redemption Price on the applicable Redemption Date, and in the
case of the Repurchase Price, on the applicable Repurchase Date) and to
institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 2.7, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.11. CONTROL BY HOLDERS.
The Holder or Holders of no less than a majority in aggregate principal
amount of then outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee, PROVIDED,
that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction,
and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. WAIVER OF PAST DEFAULT.
Subject to Section 6.8, the Holder or Holders of not less than a majority
in aggregate principal amount of then outstanding Securities may, on behalf of
all Holders, prior to the declaration of acceleration of the maturity of the
Securities, waive any past default hereunder and its consequences, except a
default
(A) in the payment of the principal of, premium, if any,
interest on, or Liquidated Damages with respect to, any Security not
yet cured as specified in clauses (1) and (2) of Section 6.1, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the
Holder of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair the exercise of any right arising therefrom.
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SECTION 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of then outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, premium
(if any), interest on or Liquidated Damages with respect to, any Security on or
after the respective Stated Maturity of such Security (including, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
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(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no others, and no covenants or obligations
shall be implied in or read into this Indenture which are adverse to the
Trustee.
(2) 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,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) 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 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 by it pursuant to Section 7.1.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) 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.
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(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 14.4 and 14.5. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) 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 conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as to the performance
of the Company's covenants in Article IV hereof. In addition, the Trustee shall
not be deemed to have knowledge of any Default or Event of Default except (i)
any Event of Default occurring pursuant to Sections 6.1(1), 6.1(2) or 5. 1, or
(ii) any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company, any of its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent 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 Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities and it shall not be accountable for the Company's
use of the proceeds from the
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Securities, and it shall not be responsible for any statement in the Securities,
other than the Trustee's certificate of authentication, or the use or
application of any funds received by a Paying Agent other than the Trustee.
SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any) of, interest on or Liquidated
Damages with respect to, any Security (including the payment of the Repurchase
Price on the Repurchase Date and the payment of the Redemption Price on the
Redemption Date), the Trustee may withhold the notice if and so long as a Trust
Officer in good faith determines that withholding the notice is in the interest
of the Securityholders.
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, if required by law, mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Securities are listed.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company agrees to pay to the Trustee from time to time such
compensation for its services as the parties shall agree from time to time. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances incurred or made
by it. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as Trustee)
and each of its officers, directors, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by it without negligence or bad faith on
its part, arising out of or in connection with the administration of this trust
and its rights or duties hereunder including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or
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duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall provide reasonable cooperation at the
Company's expense in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel; PROVIDED,
that the Company will not be required to pay such fees and expenses if it
assumes the Trustee's defense and there is no conflict of interest between the
Company and the Trustee in connection with such defense. The Company need not
pay for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal and premium, if any, of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The Holder
or Holders of a majority in principal amount of then outstanding Securities may
remove the Trustee by so notifying the Company and the Trustee in writing and
may appoint a successor trustee with the Company's consent. The Company may
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, Custodian, or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of then
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outstanding Securities may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that and provided
that all sums owing to the retiring Trustee provided for in Section 7.7 have
been paid, the retiring Trustee shall transfer all property held by it as
trustee to the successor Trustee, subject to the lien provided in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA Section 310(b).
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.
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ARTICLE VIII.
SATISFACTION AND DISCHARGE
SECTION 8.1. SATISFACTION AND DISCHARGE OF INDENTURE.
The Company may terminate its obligations under this Indenture (subject to
the provisions of this Article VIII) when it shall have delivered to the Trustee
for cancellation all Securities theretofore authenticated (other than any
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Article II hereof) and the following
conditions shall be satisfied:
(1) The Company has paid all sums payable under the Indenture;
and
(2) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent have been complied with as contemplated by this Section
8. 1.
SECTION 8.2. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, for the payment of the principal of, premium, if any, interest on
or Liquidated Damages with respect to any Security and remaining unclaimed for
two years after such principal, premium, if any, interest or Liquidated Damages
has become due and payable shall be paid to the Company on its request; and the
Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company, when authorized by Board
Resolutions, 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:
(1) to cure any ambiguity, defect, or inconsistency, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture, PROVIDED,
that such action pursuant to this clause (1) does not adversely affect the
interests of any Holder in any respect;
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(2) to create additional covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company or
to make any other change that does not adversely affect the rights of any
Holder, provided, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change pursuant to this clause (2) does not adversely
affect the rights of any Holder;
(3) to provide for collateral for or guarantors of the Securities;
(4) to evidence the succession of another Person to the Company and the
assumption by any such successor of the obligations of the Company herein and in
the Securities in accordance with Article V; or
(5) to comply with the TIA.
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT
OF HOLDERS.
Subject to Section 6.8 and the last sentence of this paragraph, with the
consent of the Holders of not less than a majority in aggregate principal amount
of then outstanding Securities, by written act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by Board Resolutions, and
the Trustee may amend or supplement this Indenture or the Securities or 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 the Securities or of modifying in any manner the rights of
the Holders under this Indenture or the Securities. Subject to Section 6.8,
Section 11.2 and the last sentence of this paragraph, the Holder or Holders of
not less than a majority in aggregate principal amount of then outstanding
Securities may, in writing, waive compliance by the Company with any provision
of this Indenture or the Securities. Notwithstanding any of the above, however,
no such amendment, supplemental indenture or waiver shall, without the consent
of the Holder of each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Security or any premium or
the interest thereon or Liquidated Damages with respect thereto is payable, or
impair the right to institute suit for the conversion of any Security or the
enforcement of any such payment on or after the due date thereof (including, in
the case of redemption, on or after the Redemption Date), or reduce the
Repurchase Price, or alter the Repurchase Offer or redemption provisions in a
manner adverse to the Holders;
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or waiver provided for in the Indenture;
(3) adversely affect the right of such Holder to convert Securities;
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(4) modify the provisions of Article 11 or the definition of Change of
Control, extent to the extent permitted by Section 11.2;
or
(5) modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the Holder of each outstanding
Security affected thereby.
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, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or Section
9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment, supplement
or waiver.
SECTION 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of his Security by written notice to the Company
or the Person designated by the Company as the Person to whom consents should be
sent if such revocation is received by the Company or such Person before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
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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,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), 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.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (1)
through (4) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; PROVIDED, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal and
premium of and interest on and Liquidated Damages with respect to a Security, on
or after the respective dates set for such amounts to become due and payable
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Security. The Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Any failure
to make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment, supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX; PROVIDED, that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article IX is authorized or permitted by this
Indenture.
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ARTICLE X.
MEETINGS OF SECURITYHOLDERS
SECTION 10.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article X for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Securityholders pursuant to any of the
provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal amount of
the Securities under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
SECTION 10.2. MANNER OF CALLING MEETINGS.
The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 10.1, to be held at such time and at such place in
the City of New York, New York or elsewhere as the Trustee shall determine.
Notice of every meeting of Securityholders, setting forth the time and place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed by the Trustee, first-class postage prepaid, to the
Company and to the Holders at their last addresses as they shall appear on the
registration books of the Registrar, not less than 10 nor more than 60 days
prior to the date fixed for a meeting.
Any meeting of Securityholders shall be valid without notice if the Holders
of all Securities then outstanding are present in Person or by proxy, or if
notice is waived before or after the meeting by the Holders of all Securities
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
SECTION 10.3. CALLING OF MEETINGS BY THE COMPANY OR HOLDERS.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a
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meeting of Securityholders to take any action specified in Section 10.1, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the Company or the
Holders of Securities in the amount above specified may determine the time and
place in the City of New York, New York or elsewhere for such meeting and may
call such meeting for the purpose of taking such action, by mailing or causing
to be mailed notice thereof as provided in Section 10.2, or by causing notice
thereof to be published at least once in each of two successive calendar weeks
(on any Business Day during such week) in a newspaper or newspapers printed in
the English language, customarily published at least five days a week of a
general circulation in the City of New York, State of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date fixed
for the meeting.
SECTION 10.4. WHO MAY ATTEND AND VOTE AT MEETINGS.
To be entitled to vote at any meeting of Securityholders, a Person shall
(a) be a registered Holder of one or more Securities, or (b) be a Person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Securities. The only Persons who shall be entitled to be present or
to speak at any meeting of Securityholders shall be the Persons entitled to vote
at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company, and its counsel.
SECTION 10.5. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING;
VOTING RIGHTS; ADJOURNMENT.
Notwithstanding any other provision of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any action by or any
meeting of Securityholders, in regard to proof of the holding of Securities and
of the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and 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 think appropriate. Such regulations may fix
a record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those Persons who
are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
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 Securityholders as provided in Section 10.3, in which case the
Company or the Securityholders 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 Holders of a majority
in principal amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Securityholder or proxy shall be entitled to one vote
for each $1,000 principal amount of Securities held or represented by him;
PROVIDED, HOWEVER, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and
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ruled by the chairman of the meeting to be not then outstanding. The chairman
of the meeting shall have no right to vote other than by virtue of Securities
held by him or instruments in writing as aforesaid duly designating him as the
proxy to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 10.2 or
Section 10.3 may be adjourned from time to time by vote of the Holder or Holders
of a majority in aggregate principal amount of the Securities represented at the
meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
SECTION 10.6. VOTING AT THE MEETING AND RECORD TO BE KEPT.
The vote upon any resolution submitted to any meeting of Securityholders
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their representatives by proxy and the principal
amount of the Securities voted by the ballot. 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 in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to such 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 such notice was mailed as provided in Section 10.2 or published
as provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other 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 10.7. EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE
HINDERED OR DELAYED BY CALL OF MEETING.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Securityholders or
any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Securityholders under any of the provisions of
this Indenture or of the Securities.
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ARTICLEXI.
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
CHANGE OF CONTROL.
(a) Subject to Section 11.2, in the event that a Change of Control
occurs, the Company shall offer, subject to the terms and conditions of this
Indenture, to purchase all or any part of each Holder's Securities (PROVIDED,
that the principal amount of such Securities must be $1,000 or an integral
multiple thereof) on the date (the "Repurchase Date") that is no later than 45
Business Days after the occurrence of such Change of Control, at a cash price
(the "Repurchase Price") equal to 100% of the principal amount thereof, together
with accrued and unpaid interest and Liquidated Damages, if any, to the
Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Securities (a "Repurchase
Offer"), the Company shall follow the procedures set forth in this Section 11.1
as follows:
(1) the Repurchase Offer shall commence within 25 Business Days
following a Change of Control;
(2) the Repurchase Offer shall remain open for 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law, but in any case not more than 60 Business Days
following the Change of Control (the "Repurchase Offer Period");
(3) upon the expiration of a Repurchase Offer, the Company shall
purchase all Securities tendered in response to the Repurchase Offer;
(4) if the Repurchase Date is on or after an interest payment
record date and on or before the related Interest Payment Date and Damage
Payment Date, any accrued interest and Liquidated Damages will be paid to the
Person in whose name a Security is registered at the close of business on such
record date, and no additional interest or Liquidated Damages will be payable to
Securityholders who tender Securities pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee with notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer (or such shorter period that is satisfactory to the Trustee);
and
(6) on or before the commencement of any Repurchase Offer, the
Company or the Trustee (upon the request and at the expense of the Company)
shall send, by first-class mail, a notice to each of the Securityholders, which
(to the extent consistent with this Indenture) shall govern the terms of the
Repurchase Offer and shall state:
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(i) that the Repurchase Offer is being made pursuant to such
notice and this Section 11.1 and that all Securities, or portions thereof,
tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of accrued and
unpaid interest and Liquidated Damages, if any), the Repurchase Date and
the Repurchase Put Date;
(iii) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest and Liquidated
Damages, if any;
(iv) that, unless the Company defaults in depositing Cash with the
Paying Agent in accordance with the last paragraph of this clause (b) or
such payment is prevented pursuant to Article XII, any Security, or portion
thereof, accepted for payment pursuant to the Repurchase Offer shall cease
to accrue interest and Liquidated Damages after the Repurchase Date;
(v) that Holders electing to have a Security, or portion thereof,
purchased pursuant to a Repurchase Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security completed, to the Paying Agent (which may not
for purposes of this Section 11.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the Company)
at the address specified in the notice prior to the close of business on
the earlier of (a) the third Business Day prior to the Repurchase Date and
(b) the third Business Day following the expiration of the Repurchase Offer
(such earlier date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their election, in
whole or in part, if the Paying Agent (which may not for purposes of this
Section 11.1, notwithstanding anything in this Indenture to the contrary,
be the Company or any Affiliate of the Company) receives, up to the close
of business on the Repurchase Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased; and
(vii) a brief description of the events resulting in such Change of
Control.
Any such Repurchase Offer shall comply with all applicable provisions of
Federal and state laws, including those regulating tender offers, if applicable,
and any provisions of this Indenture which conflict with such laws shall be
deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Repurchase
Offer on or before the Repurchase Put Date, (ii) deposit with the Paying Agent
Cash sufficient to pay the Repurchase Price (together
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with accrued and unpaid interest and Liquidated Damages, if any) of all
Securities or portions thereof so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate listing the
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to Holders of Securities so accepted payment in an amount
equal to the Repurchase Price (together with accrued and unpaid interest and
Liquidated Damages, if any), and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security or Securities equal in principal
amount to any unpurchased portion of the Securities surrendered. Any Securities
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the
Repurchase Offer on or as soon as practicable after the Repurchase Date.
SECTION 11.2. RESCISSION OF CHANGE OF CONTROL DETERMINATION.
At any time prior to the close of business on the Business day immediately
preceding the Repurchase Date, the Holders of more than 66-2/3% in aggregate
principal amount of the then outstanding Securities, by written act of said
Holders delivered to the Company and the Trustee, may determine that the event
giving rise to the Change of Control shall not be treated as a Change of Control
for purposes of Section 11.1, in which event:
(1) the provisions of Section 11.1(a) shall not apply;
(2) if a Repurchase Offer has been made by the Company pursuant to Section
11.1(b), such Repurchase Offer shall be deemed revoked; and
(3) if any Securities have been tendered in response to the revoked
Repurchase Offer, such tenders shall be deemed rescinded and the Securities
promptly returned to the Holders thereof.
Following a determination by the Holders pursuant to this Section 11.2, the
Company shall mail to all Holders a notice briefly describing such
determination. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such determination. An effective determination under this Section 11.2 shall be
binding on all holders
ARTICLE XII.
SUBORDINATION
SECTION 12.1. SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS.
The Company and each Holder, by its acceptance of Securities, agree that
(a) the payment of the principal of and interest on the Securities and (b) any
other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company (including, without
limitation, pursuant to Article XI) is subordinated, to the extent and in the
manner provided in this Article XII, to the prior payment in full of all Senior
Indebtedness
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of the Company, whether outstanding at the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, and that these subordination
provisions are for the benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
SECTION 12.2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment may be made by the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages with respect
to, the Securities, or to acquire any of the Securities (including repurchases
of Securities at the option of the Holder) for cash or property (other than
Junior Securities), or on account of the redemption provisions of the
Securities, (i) upon the maturity of any Senior Indebtedness of the Company by
lapse of time, acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and interest on such Senior Indebtedness are
first paid in full (or such payment is duly provided for), or (ii) in the event
of default in the payment of any principal of, premium, if any, or interest on
any Senior Indebtedness of the Company when it becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or otherwise
(collectively, a "Payment Default"), unless and until such Payment Default has
been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits, or would permit, with (w) the passage of time,
(x) the giving of notice, (y) the making of any payment of the Securities then
required to be made, or (z) any combination thereof (collectively, a
"Non-Payment Default"), the holders of Senior Indebtedness having a principal
amount then outstanding in excess of $10,000,000 (or with respect to which
Senior Indebtedness the holders are obligated to lend the Company in excess of
$10,000,000 principal amount) or their representative immediately to accelerate
its maturity and (ii) written notice of such Non-Payment Default given to the
Company and the Trustee by the holders of an aggregate of at least $10,000,000
principal amount outstanding of such Senior Indebtedness (or holders of
commitments to lend an aggregate of at least $10,000,000 principal amount of
Senior Indebtedness) or their representative (a "Payment Notice"), then, unless
and until such Non-Payment Default has been cured or waived or otherwise has
ceased to exist, no payment (by set-off or otherwise) may be made by or on
behalf of the Company on account of the principal of, premium, if any, interest
on, or Liquidated Damages with respect to, the Securities, or to acquire or
repurchase any of the Securities for cash or property, or on account of the
redemption provisions of the Securities, in any such case other than payments
made with Junior Securities. Notwithstanding the foregoing, unless (i) the
Senior Indebtedness in respect of which such Non-Payment Default exists has been
declared due and payable in its entirety within 179 days after the Payment
Notice is delivered as set forth above (the "Payment Blockage Period"), and (ii)
such declaration has not been rescinded or waived, at the end of the Payment
Blockage Period, the Company shall be required to pay all sums not paid to the
Holders of the Securities during the
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Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Securities. Not more than one Payment
Notice may be given in any 365-day period, irrespective of the number of
defaults with respect to Senior Indebtedness during such period. In no event,
however, may the total number of days during which any Payment Blockage Period
or Payment Blockage Periods are in effect exceed 179 days in the aggregate
during any consecutive 365-day period.
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any payment
or distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders or any Paying Agent at a time when such
payment or distribution is prohibited by the provisions of this Section 12.2,
then such payment or distribution (subject to the provisions of Section 12.7)
shall be received and held in trust by the Trustee or such Holder or Paying
Agent for the benefit of the holders of Senior Indebtedness of the Company, and
shall be paid or delivered by the Trustee or such Holders or such Paying Agent,
as the case may be, to the holders of Senior Indebtedness of the Company
remaining unpaid or unprovided for or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness of the Company may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness of the Company held or represented by each,
for application to the payment of all Senior Indebtedness of the Company in full
after giving effect to any concurrent payment and distribution, or provision
therefor, to the holders of such Senior Indebtedness.
SECTION 12.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payments in full (or have such payment duly
provided for) before the Holders are entitled to receive any payment on account
of the principal of, premium, if any, interest on, and Liquidated Damages with
respect to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by setoff or otherwise), except for the provisions of this Article
XII, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness of
the Company or their representative to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
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(c) 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 Junior Securities), shall be received
by the Trustee or the Holders or any Paying Agent (or, if the Company or any
Affiliate of the Company is acting as its own Paying Agent, money for any such
payment or distribution shall be segregated or held in trust) on account of the
principal of or interest on the Securities before all Senior Indebtedness of the
Company is paid in full, such payment or distribution (subject to the provisions
of Section 12.7) shall be received and held in trust by the Trustee or such
Holder or Paying Agent for the benefit of the holders of such Senior
Indebtedness, or their respective representative, ratably according to the
respective amounts of such Senior Indebtedness held or represented by each, to
the extent necessary to make payment as provided herein of all such Senior
Indebtedness remaining unpaid after giving effect to all concurrent payments and
distributions and all provisions therefor to or for the holders of such Senior
Indebtedness, but only to the extent that as to any holder of such Senior
Indebtedness, as promptly as practical following notice from the Trustee to the
holders of such Senior Indebtedness that such prohibited payment has been
received by the Trustee, Holder(s) or Paying Agent (or has been segregated as
provided above), such holder (or a representative therefor) notifies the Trustee
of the amounts then due and owing on such Senior Indebtedness, if any, held by
such holder and only the amounts specified in such notices to the Trustee shall
be paid to the holders of such Senior Indebtedness.
SECTION 12.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF
SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness of the Company as
provided herein, the Holders of Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders by virtue of this
Article XII, which otherwise would have been made to the Holders shall, as
between the Company and the Holders, be deemed to be payment by the Company or
on account of such Senior Indebtedness, it being understood that the provisions
of this Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
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SECTION 12.5. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair as between the Company and the
Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, interest
on, and Liquidated Damages with respect to, the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder 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 in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Notwithstanding anything to the contrary in this
Article XII or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company referred to in this Article XII, the
Trustee, subject to the provisions of Sections 7.1 and 7.2, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or 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 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 so long as such court has been apprised of the provisions
of, or the order, decree or certificate makes reference to, the provisions of
this Article XII. Nothing in this Section 12.5 shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
SECTION 12.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment,
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any representative therefor and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
fact exists.
SECTION 12.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article VIII shall be for the sole benefit of Securityholders and, to the
extent allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article XII. Otherwise, any deposit of assets
with the Trustee or the Agent (whether or not in trust) for the payment of
principal of or interest on any Securities shall be subject to the provisions of
Sections 12.1, 12.2, 12.3 and 12.4; PROVIDED THAT, if prior to one Business Day
preceding the date on which by the
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terms of this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of either principal of or interest
on any Security) the Trustee or such Paying Agent shall not have received with
respect to such assets the written notice provided for in Section 12.6, then the
Trustee or such Paying Agent shall have full power and authority to receive such
assets 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 date.
SECTION 12.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article XII 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 of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
SECTION 12.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of 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 of the Company),
the immediate filing of a claim for the unpaid balance of his Securities in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of the Senior Indebtedness or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
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SECTION 12.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if any,
interest on, or Liquidated Damages with respect to, the Securities by reason of
any provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
prevent the Holders from exercising any right hereunder other than the right to
receive payment on the Securities.
SECTION 12.12. NO FIDUCIARY DUTY OF TRUSTEE TO 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 (other than for
its willful misconduct or negligence) if it shall in good faith mistakenly pay
over or distribute to the Holders of Securities or the Company or 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. Nothing in this
Section 12.12 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their representative.
ARTICLE XIII.
CONVERSION OF SECURITIES
SECTION 13.1. CONVERSION PRIVILEGE.
Subject to and upon compliance with the provisions of this Article XIII, at
the option of the Holder thereof, any Security may at any time, on or after the
90th date following the latest date of initial issuance of the Securities, be
converted, in whole, or in part in multiples of $1,000 principal amount, into
fully paid and non-assessable shares of Common Stock issuable upon conversion of
the Securities, at the conversion price in effect at the Date of Conversion,
until and including, but not after the close of business on the Stated Maturity,
or unless such Security or some portion thereof shall have been called for
redemption or delivered for repurchase prior to such date and no default is made
in making due provision for the payment of the redemption price in accordance
with the terms of this Indenture, in which case, with respect to such Security
or portion thereof as has been so called for redemption or delivered for
repurchase, such Security or portion thereof may be so converted until and
including, but not after, the close of business on the fifth Business Day prior
to the Redemption Date or Repurchase Date, as applicable, for such
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Security, unless the Company subsequently fails to pay the applicable Redemption
Price or Repurchase Price, as the case may be.
SECTION 13.2. EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security to the Company at any time during
usual business hours at its office or agency maintained for the purpose as
provided in this Indenture, accompanied by a fully executed written notice, in
substantially the form set forth on the reverse of the Security, that the Holder
elects to convert such Security or a stated portion thereof constituting a
multiple of $1,000 principal amount, and, if such Security is surrendered for
conversion during the period between the close of business on any Record Date
and the opening of business on the next following Interest Payment Date and has
not been called for redemption on a Redemption Date which occurs within such
period or within five Business Days followin such Interest Payment Date,
accompanied (except in the case of the Interest Payment Date occurring on August
1, 2000) also by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of the Security being surrendered
for conversion, notwithstanding such conversion. Such notice of conversion
shall also state the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued. Securities surrendered
for conversion shall (if reasonably required by the Company or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company duly executed by, the Holder or his
attorney duly authorized in writing. As promptly as practicable after the
receipt of such notice and the surrender of such Security as aforesaid, the
Company shall, subject to the provisions of Section 13.8 hereof, issue and
deliver at such office or agency to such Holder, or on his written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion of Securities in accordance with the provisions of
this Article XIII and Cash, as provided in Section 13.3 hereof, in respect of
any fraction of a share of Common Stock otherwise issuable upon such conversion.
Such conversion shall be deemed to have been effected immediately prior to the
close of business on the date (herein called the "Date of Conversion") on which
such Security shall have been surrendered as aforesaid, and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of record of the shares
represented thereby; PROVIDED, HOWEVER, that any such surrender on any date when
the stock transfer books of the Company shall be closed shall cause the person
or persons in whose name or names the certificate or certificates for such
shares are to be issued to be deemed to have become the record holder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open but such conversion shall
nevertheless be at the conversion price in effect at the close of business on
the date when such Security shall have been so surrendered with the conversion
notice. In the case of conversion of a portion, but less than all, of a
Security, the Company shall as promptly as practicable execute, and the Trustee
shall authenticate and deliver to the Holder thereof, at the expense of the
Company, a Security or Securities in the aggregate principal amount of the
unconverted portion of the Security surrendered. Except as otherwise expressly
provided in this Indenture, no payment or adjustment shall be made for interest
accrued on any Security (or portion thereof)
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converted or for dividends or distributions on any Common Stock issued upon
conversion of any Security.
SECTION 13.3. FRACTIONAL INTERESTS.
No fractions of shares or scrip representing fractions of shares shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities so surrendered. If
any fraction of a share of Common Stock would, except for the foregoing
provisions of this Section 13.3, be issuable on the conversion of any Security
or Securities, the Company shall make payment in lieu thereof in an amount of
Cash equal to the value of such fraction computed on the basis of the last sale
price of the Common Stock as reported on the New York Stock Exchange (or if not
listed for trading thereon, then on the principal national securities exchange
on which the Common Stock is listed or admitted to trading) at the close of
business on the Date of Conversion or if no such sale takes place on such day,
the last sale price for such day shall be the average of the closing bid and
asked prices regular way on the New York Stock Exchange (or if not listed for
trading thereon, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading) for such day (any such last sale
price being hereinafter referred to as the "Last Sale Price"). If on such
Trading Day the Common Stock is not quoted by any such organization, the fair
value of such Common Stock on such day, as reasonably determined in good faith
by the Board of Directors of the Company, shall be used.
SECTION 13.4. CONVERSION PRICE.
The conversion price per share of Common Stock issuable upon conversion of
the Securities shall initially be $51.75 (or $51.75 in principal amount of
Securities for each such share of Common Stock).
SECTION 13.5. ADJUSTMENT OF CONVERSION PRICE.
The conversion price (herein called the "Conversion Price") shall be
subject to adjustment from time to time as follows:
(a) In case the Company shall make or pay a dividend or make a
distribution in shares of Common Stock on any class of Capital Stock of the
Company, the Conversion Price in effect immediately following the record date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such date and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution. An adjustment made pursuant to this
subsection (a) shall become effective immediately, except as provided in
subsection (i) below, after such record date.
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(b) In case the Company shall (1) subdivide its outstanding shares
of Common Stock into a greater number of shares or (2) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately following the effectiveness of such
action shall be adjusted by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
immediately prior to such subdivision or combination and the denominator shall
be the number of shares outstanding immediately after giving effect to such
subdivision or combination. An adjustment made pursuant to this subsection (b)
shall become effective immediately, except as provided in subsection (i) below,
after the effective date of a subdivision or combination.
(c) In case the Company shall issue rights, options or warrants to
all or substantially all holders of Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the then
current market price per share of the Common Stock (as determined pursuant to
subsection (g) below) on the record date fixed for determination of the
stockholders entitled to receive such rights, option or warrants, the Conversion
Price in effect immediately following such record date shall be adjusted to a
price, computed to the nearest cent, so that the same shall equal the price
determined by multiplying:
(i) such Conversion Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of Common
Stock outstanding on such record date plus (B) the number of shares which
the aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such current market price), and of which
(iii) the denominator shall be (A) the number of shares of Common
Stock outstanding on such record date plus (B) the number of additional
shares of Common Stock which are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as provided in
subsection (i) below, after the record date for the determination of holders
entitled to receive such rights, options or warrants; PROVIDED, HOWEVER, that if
any such rights, options or warrants issued by the Company as described in this
subsection (b) are only exercisable upon the occurrence of certain triggering
events, then the Conversion Price will not be adjusted as provided in this
subsection (c) until such triggering events occur. Upon the expiration or
termination of any rights, options or warrants without the exercise of such
rights, options or warrants, the Conversion Price then in effect shall be
adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such rights, options or warrants,
to the extent outstanding immediately prior to such expiration or termination,
never been issued.
(d) In case the Company or any Subsidiary of the Company shall
distribute to all or substantially all holders of Common Stock, any of its
assets, evidences of indebtedness,
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cash or securities (other than (x) dividends or distributions exclusively in
cash or (y) any dividend or distribution for which an adjustment is required to
be made in accordance with subsection (a) or (c) above) then in each such case
the Conversion Price in effect immediately following the record date fixed for
the determination of the stockholders entitled to such distribution) shall be
adjusted so that the same shall equal the price determined by multiplying such
Conversion Price by a fraction of which the numerator shall be the then current
market price per share of the Common Stock (determined as provided in subsection
(g) below) on such record date less the then fair market value (as reasonably
determined in good faith by the Board of Directors of the Company) of the
portion of the assets so distributed applicable to one share of Common Stock,
and of which the denominator shall be such current market price per share of the
Common Stock. Such adjustment shall become effective immediately, except as
provided in subsection (i) below, after the record date for the determination of
stockholders entitled to receive such distribution.
(e) In case the Company or any Subsidiary of the Company shall
make any distribution consisting exclusively of cash (excluding any cash portion
of distributions for which an adjustment is required to be made in accordance
with subsection (d) above, or cash distributed upon a merger or consolidation to
which Section 13.6 applies) to all or substantially all holders of Common Stock
in an aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment pursuant to this subsection (e) has been made and (ii) any cash and
the fair market value of other consideration paid or payable in respect of any
tender or exchange offer by the Company or any of its Subsidiaries for Common
Stock concluded within the preceding 12 months in respect of which no adjustment
has been made, exceeds 15% of the Company's market capitalization (defined as
being the product of the then current market price of the Common Stock
(determined as provided in subsection (g) below) times the number of shares of
Common Stock then outstanding) on the record date fixed for the determination of
the stockholders entitled to such distribution, in each such case the Conversion
Price immediately following such record date shall be adjusted so that the same
shall equal the price determined by multiplying such Conversion Price by a
fraction of which the numerator shall be the then current market price per share
of the Common Stock on such record date less the amount of the cash and/or fair
market value (as reasonably determined in good faith by the Board of Directors
of the Company) of other consideration so distributed applicable to one share of
Common Stock, and of which the denominator shall be such current market price
per share of the Common Stock. Such adjustment shall become effective
immediately, except as provided in subsection (i) below, after the record date
for the determination of stockholders entitled to receive such distribution.
(f) In case the Company or any Subsidiary of the Company shall
complete a tender or exchange offer for all or any portion of the Common Stock
(any such tender or exchange offer being referred to as an "Offer") that
involves an aggregate consideration having a fair market value as of the
expiration of such Offer (the "Expiration Time") that, together with (i) any
cash and the fair market value of any other consideration payable in respect of
any other tender or exchange offer, as of the expiration of such other tender or
exchange offer, expiring within the 12 months preceding the expiration of such
Offer and in respect of which no Conversion Price adjustment pursuant to this
subsection (f) has been made and (ii) the aggregate
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amount of any all-cash distributions referred to in subsection (e) of this
Section 13.5 to all holders of Common Stock within the 12 months preceding the
expiration of such Offer for which no conversion price adjustment pursuant to
such subsection (e) has been made, exceeds 15% of the product of the then
current market price per share (determined as provided in subsection (g) below)
of the Common Stock on the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, the
Conversion Price in effect immediately following such Expiration Time shall be
reduced by multiplying such Conversion Price by a fraction of which the
numerator shall be (i) the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time minus (ii) the fair
market value of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the Offer) of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted being referred to as the "Purchased Shares") and the denominator
shall be the product of (i) such current market price per share on the
Expiration Time times (ii) such number of outstanding shares on the Expiration
Time less the number of Purchased Shares, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time.
For purposes of this subsection (f), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in good
faith by the Board of Directors of the Company and described in a Board
Resolution.
(g) For the purpose of any computation under subsections (c), (d),
(e) and (f) above, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Last Sale Prices of a share of
Common Stock for the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
earlier of the date in question and the date before the "'ex' date," with
respect to the issuance, distribution or Offer requiring such computation. If
on any such Trading Day the Common Stock is not quoted by any organization
referred to in the definition of Last Sale Price in Section 13.3 hereof, the
fair value of the Common Stock on such day, as reasonably determined in good
faith by the Board of Directors of the Company, shall be used. For purposes of
this paragraph, the term "'ex' date," when used with respect to any issuance,
distribution or payments with respect to an Offer, means the first date on which
the Common Stock trades regular way on the New York Stock Exchange (or if not
listed or admitted to trading thereon, then on the principal national securities
exchange or the Nasdaq Stock Market's National Market if the Common Stock is
listed or admitted to trading thereon) without the right to receive such
issuance, distribution or Offer.
(h) In addition to the foregoing adjustments in subsections (a),
(b), (c), (d), (e) and (f) above, the Company, from time to time and to the
extent permitted by law, may reduce the Conversion Price by any amount for at
least 20 Business Days, if the Board of Directors has made a determination,
which determination shall be conclusive, that such reduction would be in the
best interests of the Company. The Company shall cause notice of such reduction
to be mailed to each Holder of Securities, in the manner specified in
Section 13.7, at least 15 days
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prior to the date on which such reduction commences. The Company, at its
option, also may make such reductions in the Conversion Price as it considers to
be advisable in order that any event treated for Federal income tax purposes as
a dividend of stock or stock rights will not be taxable to the holders of the
shares of Common Stock.
(i) In any case in which this Section 13.5 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Security converted after such record
date and on and before such adjustment shall have become effective (i) defer
paying any Cash payment pursuant to Section 13.3 hereof or issuing to the Holder
of such Security the number of shares of Common Stock and other capital stock of
the Company (or other assets or securities) issuable upon such conversion in
excess of the number of shares of Common Stock and other Capital Stock of the
Company issuable thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five Business Days after such adjustment
shall have become effective, pay to such Holder the appropriate Cash payment
pursuant to Section 13.3 hereof and issue to such Holder the additional shares
of Common Stock and other Capital Stock of the Company issuable on such
conversion.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; PROVIDED, that any adjustments which by reason of this
subsection (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XIII shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly (i) file with the Trustee and each conversion agent
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness of
such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment
to each holder of Securities at his address as the same appears on the registry
books of the Company.
(l) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, the Company shall make proper provision so that the
Holder of any Note surrendered for conversion will be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of rights or warrants to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number of
rights or warrants to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the rights or
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warrants, and (ii) if such conversion occurs after such Distribution Date, the
same number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been entitled
on such Distribution Date in accordance with the terms and provisions of and
applicable to the rights or warrants.
SECTION 13.6. CONTINUATION OF CONVERSION PRIVILEGE IN CASE OF
RECLASSIFICATION, CHANGE, MERGER, CONSOLIDATION OR SALE OF ASSETS.
If any of the following shall occur, namely: (a) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of the
Securities (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), (b) any consolidation or merger of the Company with or into any
other Person, or the merger of any other Person with or into the Company (other
than a merger which does not result in any reclassification, change, conversion,
exchange or cancellation of outstanding shares of Common Stock) or (c) any sale,
transfer or conveyance of all or substantially all of the assets of the Company
(computed on a consolidated basis), then the Company, or such successor or
purchasing entity, as 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 providing that the Holder of
each Security then outstanding shall have the right to convert such Security
only into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale, transfer or conveyance by a holder of the number of
shares of Common Stock issuable upon conversion of such Security immediately
prior to such reclassification, change, consolidation, merger, sale, transfer or
conveyance assuming such holder of Common Stock of the Company failed to
exercise his rights of an election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, merger, sale, transfer or conveyance (PROVIDED that if
the kind or amount of securities, cash, and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance is
not the same for each share of Common Stock of the Company held immediately
prior to such reclassification, change, consolidation, merger, sale, transfer or
conveyance in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section 13.6 the
kind and amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article III. 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 shares of Common Stock includes shares of stock or other securities and
property (including cash) 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 Securities as the Board of Directors of the
Company shall reasonably consider necessary by reason of the
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foregoing. The provisions of this Section 13.6 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
Notice of the execution of each such supplemental indenture shall be mailed
to each Holder of Securities at his address as the same appears on the registry
books of the Company.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article VIII hereof, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
SECTION 13.7. NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall declare a dividend (or any other
distribution) payable to the holders of Common Stock (other than cash
dividends);
(b) the Company shall authorize the granting to the holders of
Common Stock of rights, warrants or options to subscribe for or purchase any
shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of
the Common Stock (including a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is required,
or the sale or conveyance of all or substantially all the property or business
of the Company;
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an
Offer;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 3.2 hereof,
and shall cause to be mailed to each Holder of Securities, at his address as it
shall appear on the registry books of the Company, at least 20 days before the
date hereinafter specified (or the earlier of the dates hereinafter specified,
in the event that more than one date is specified), a notice stating the date on
which (1) a record is expected to be taken for the purpose of such dividend,
distribution, rights, warrants or options or Offer, or if a record is not to be
taken, the date as of which the holders of Common
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Stock of record to be entitled to such dividend, distribution, rights,
warrants or options or to participate in such Offer are to be determined, or
(2) such reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up is expected to become effective and
the date, if any is to be fixed, as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up.
SECTION 13.8. TAXES ON CONVERSION.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; PROVIDED, HOWEVER,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or has established, to the satisfaction of the Company, that such tax has
been paid. The Company extends no protection with respect to any other taxes
imposed in connection with conversion of Securities.
SECTION 13.9. COMPANY TO PROVIDE STOCK.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Securities from time to time as such Securities are presented for
conversion, PROVIDED, that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible use its best efforts to
secure such registration or approval, as the case may be, PROVIDED, HOWEVER,
that nothing in this Section 13.9 shall be deemed to limit in any way the
obligations of the Company provided in this Article XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
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The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
by the Company and free of preemptive rights.
SECTION 13.10. DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.
Neither the Trustee nor any agent of the Trustee shall at any time be under
any duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the Officers' Certificate referred to in Section 13.5 hereof, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any agent
of the Trustee shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Common Stock, or of any securities or
property (including cash), which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
agent of the Trustee shall be responsible for any failure of the Company to
issue, register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the surrender
of any Security for the purpose of conversion or, subject to Article VIII
hereof, to comply with any of the covenants of the Company contained in this
Article XIII.
SECTION 13.11. RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF CONVERTED
SECURITIES.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other Paying Agent for the purpose of paying
the principal of and interest on any of the Securities and which shall not be
required for such purposes because of the conversion of such Securities, as
provided in this Article XIII, shall after such conversion be repaid to the
Company by the Trustee or such other Paying Agent.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of the TIA, the imposed duties, whether or not this
Indenture has been qualified under the TIA, shall control.
SECTION 14.2. NOTICES.
Any notices or other communications to the Company or the Trustee required
or permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery,
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by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Tower Automotive, Inc.
4508 IDS Center
Minneapolis, MN 55402
Attention: Scott D. Rued
Telecopy: (612) 332-2012
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-5915
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 14.3. COMMUNICATIONS 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, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
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SECTION 14.4. 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:
(1) An Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) 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
(2) an Opinion of Counsel (in form and substance reasonably satisfactory
to the Trustee) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 14.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; PROVIDED, HOWEVER,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 14.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 14.7. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
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SECTION 14.8. GOVERNING LAW.
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. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY 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 THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
SECTION 14.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 14.10. NO RECOURSE AGAINST OTHERS.
No direct or indirect partner, employee, stockholder, director or officer,
as such, past, present or future of the Company or any successor corporation,
shall have any personal liability in respect of the obligations of the Company
under the Securities or this Indenture by reason of his, her or its status as
such partner, stockholder, employee, director or officer. Each Securityholder
by accepting a Security waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Securities.
SECTION 14.11. 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.
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SECTION 14.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 14.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 14.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the Articles
and the Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.15. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay all
costs and expenses (including attorneys' fees for the Company and the Trustee)
incurred in connection therewith, including, but not limited to, costs and
expenses of qualification of the Indenture and the Securities and printing this
Indenture and the Securities. The Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 14.16. REGISTRATION RIGHTS.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms of,
the Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
TOWER AUTOMOTIVE, INC., a Delaware corporation
By: /s/ Carl E. Nelson
------------------------------------------
Title: Assistant Secretary
THE BANK OF NEW YORK, a New York banking
corporation, as Trustee
By: /s/ Thomas B. Zakrzewski
------------------------------------------
Title: Assistant Vice President
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EXHIBIT A
[FORM OF SECURITY]
TOWER AUTOMOTIVE, INC.
5% CONVERTIBLE SUBORDINATED NOTE
DUE 2004
No. CUSIP No. __________
$_______
Tower Automotive, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _____, or registered
assigns, the principal sum of ____________ Dollars, on August 1, 2004.
Interest Payment Dates: February 1 and August 1; commencing February 1,
1998.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Security on the reverse
side, which will, for all purposes, have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
TOWER AUTOMOTIVE, INC., a Delaware
corporation
[Seal]
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Attest:
------------------
Secretary
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
Dated:
A-2
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TOWER AUTOMOTIVE, INC.
5% CONVERTIBLE SUBORDINATED NOTE
DUE 2004
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
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 in 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.(1)
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THE SECURITIES EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF
AGREES THAT SUCH SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE MEANING
OF RULE 144 UNDER THE SECURITIES ACT AND THAT IT AND ANY SUBSEQUENT HOLDER
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) PURSUANT TO RULE 144A, FOR SO LONG AS IT IS
AVAILABLE, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS
- ---------------------
(1) This paragraph should only be added if the Security is issued in global
form.
A-3
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GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.(2)
1. INTEREST.
Tower Automotive, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 5% per annum. To the extent it is lawful, the Company promises
to pay interest on any interest payment due but unpaid on such principal amount
at a rate of 7% per annum compounded semi-annually.
The Company will pay interest semi-annually on February 1 and Auguat 1 of
each year (each, an "Interest Payment Date"), commencing February 1, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
July 29, 1997. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders
must surrender Securities to a Paying Agent to collect principal payments. Any
such interest not so punctually paid, and defaulted interest relating thereto,
may be paid to the Persons who are registered Holders at the close of business
on a Special Record Date for the payment of such defaulted interest, as more
fully provided in the
- ---------------------
(2) This paragraph should be included only for the Transfer Restricted
Securities.
A-4
<PAGE>
Indenture referred to below. Except as provided below, the Company shall pay
principal and interest in such coin or currency of the United States of America
as at the time of payment shall be legal tender for payment of public and
private debts ("U.S. Legal Tender"). The Securities will be payable as to
principal, premium, interest and Liquidated Damages at the office or agency of
the Company maintained for such purpose within or without the City and State of
New York, or at the option of the Company, payment of principal, premium,
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the registry of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of, premium and interest on and Liquidated Damages with respect to
Global Securities and all other Securities the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent.
3. PAYING AGENT AND REGISTRAR.
Bank of New York (the "Trustee") will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders. The Company or any of its Subsidiaries may, subject to
certain exceptions, act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of July 28,
1997 (the "Indenture"), between the Company and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act, as in effect on
the date of the Indenture. The Securities are subject to all such terms, and
Holders of Securities are referred to the Indenture and said Act for a statement
of them. The Securities are general unsecured obligations of the Company
limited in aggregate principal amount to $200,000,000.
5. REDEMPTION.
The Securities may be redeemed in whole or from time to time in part at any
time on and after August 1, 2000, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth below
with respect to the indicated Redemption Date, in each case, plus any accrued
but unpaid interest and Liquidated Damages to the Redemption Date. The
Securities may not be so redeemed prior to August 1, 2000.
A-5
<PAGE>
If redeemed during
the 12-month period
beginning on August 1 Redemption Price
--------------------- ----------------
2000 ............................. 102.857%
2001 ............................. 102.143%
2002 ............................. 101.429%
2003 ............................. 100.714%
2004 ............................. 100.000%
Any such redemption will comply with Article III of the Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be sent by first class mail, at least 30 days and
not more than 60 days prior to the Redemption Date to the Holder of each
Security to be redeemed at such Holder's last address as then shown upon the
registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall have
been deposited with the Paying Agent on such Redemption Date and payment of the
Securities called for redemption is not prohibited under Article XII of the
Indenture, the Securities called for redemption will cease to- bear interest and
the only right of the Holders of such Securities will be to receive payment of
the Redemption Price, plus any accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of,
or exchange Securities in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal, interest or Liquidated Damages
remains unclaimed for two years, the Trustee and the Paying Agent(s) will pay
the money back to the Company at its
A-6
<PAGE>
written request. After that, all liability of the Trustee and such Paying
Agent(s) with respect to such money shall cease.
10. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Default or Event of Default or
compliance with any provision may be waived, with the written consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Securities to, among other things,
cure any ambiguity, defect or inconsistency, or make any other change that does
not adversely affect the rights of any Holder of a Security.
11. CONVERSION RIGHTS.
Subject to the provisions of the Indenture, the Holders have the right to
convert the principal amount of the Securities into fully paid and nonassessable
shares of Common Stock of the Company at the initial conversion price per share
of Common Stock of $51.75 (or $51.75 in principal amount of Securities for each
such share of Common Stock), or at the adjusted conversion price then in effect,
if adjustment has been made as provided in the Indenture, upon surrender of the
Security to the Company, together with a fully executed notice in substantially
the form attached hereto and, if required by the Indenture, an amount equal to
accrued interest payable on such Security.
12. RANKING.
Payment of principal, premium, if any, interest on and Liquidated Damages
with respect to the Securities is subordinated, in the manner and to the extent
set forth in the Indenture, to the prior payment in full of all Senior
Indebtedness.
13. REPURCHASE AT OPTION OF HOLDER UPON A CHANGE OF CONTROL.
If there is a Change of Control, the Company shall be required to offer to
purchase on the Repurchase Date all outstanding Securities at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, to the Repurchase Date. Holders of Securities
will receive a Repurchase Offer from the Company prior to any related Repurchase
Date and may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
14. SUCCESSORS.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
15. DEFAULTS AND REMEDIES.
A-7
<PAGE>
If an Event of Default occurs and is continuing (other than as Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
then in every such case, unless the principal of all of the securities shall
have already become due and payable, either the Trustee or the Holders of 25 %
in aggregate principal amount of Securities then outstanding may declare all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of any continuing Default or Event of Default (except a Default in
payment of principal, interest or Liquidated Damages), if it determines that
withholding notice is in their interest.
16. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS.
No stockholder, director, officer or employee, as such, past, present or
future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Securities or
the Indenture by reason of his, her or its status as such stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
18. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Security.
19. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the
A-8
<PAGE>
Securities as a convenience to the Holders of the Securities. No representation
is made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
21. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Request may be made to:
Tower Automotive, Inc.
4508 IDS Center
Minneapolis, Minnesota 55402
Attention: Secretary
A-9
<PAGE>
[FORM OF] ASSIGNMENT
I or we assign this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
- -----------------------------
and irrevocably appoint _______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Dated: _______________________ Signed:
----------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guaranty:
----------------------------
Signatures must be guarantied by an "eligible guarantor instution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guaranty program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Article M of the Indenture, check the box: / /
If you want to elect to have only part of this Security purchased by the
Company pursuant to Article XI of the Indenture, state the amount you want to be
purchased: $__________
Date: _____________________ Signature:
----------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guaranty:
---------------------------
Signatures must be guarantied by an "eligible guarantor instution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guaranty program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES (3)
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
<TABLE>
<S> <C> <C> <C> <C>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer
Principal Amount Principal Amount Security following of Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(3) This schedule should only be added if the Security is issued in global
form.
A-12
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 5% CONVERTIBLE SUBORDINATED NOTES DUE 2004 OF TOWER AUTOMOTIVE, INC.
This Certificate relates to $______ principal amount of Securities held in
*_______ book-entry or * __________ definitive form by _________ (the
"Transferor").
1. The Transferor:(*)
/ / (a) has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depositary a Security
or Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
/ / (b) has requested the Trustee by written order to exchange or register
the transfer of a Security or Securities.
2. In connection with any such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act because:*
/ / (a) Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
/ / (b) Such Security is being transferred to a person who the Transferor
reasonably believes is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) purchasing for its own account or for the account
of a qualified institutional buyer over which it exercises sole investment
discretion that is aware that the transfer is being made in reliance on Rule
144A (in satisfaction of Section 2.6(a)(ii)(B), Section 2.6(b)(i)(x) or Section
2.6(d)(i)(B) of the Indenture).
/ / (c) Such Security is being transferred in accordance with Regulation S
under the Securities Act (in satisfaction of Section 2.6(a)(ii)(C), Section
2.6(b)(i)(y) or Section 2.6(d)(i)(C) of the Indenture).
- ---------------------
(*) Check applicable box.
A-13
<PAGE>
/ / (d) Such Security is being transferred to an institutional investor that is
an "accredited investor" within the meaning of Rule 501(a)(l),(2),(3) or (7)
under the Securities Act which delivers a certificate in the form of Exhibit B
to the Indenture to the Trustee (in satisfaction of Section 2.6(a)(ii)(D) or
Section 2.6(d)(i)(D) of the Indenture).
/ / (e) Such Security is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act.
An Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.6(a)(ii)(E) or Section 2.6(d)(i)(E) of the Indenture).
---------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------
Date:
---------------------------
3. Affiliation with the Company [check if applicable]
[ ] (a) The undersigned represents and warrants that it is, or at
some time during which it held this Security was, an
Affiliate of the Company.
(b) If 3(a) above is checked AND if the undersigned was not an
Affiliate of the Company at all times during which it held
this Security, indicate the periods during which the
undersigned was an Affiliate of the Company:
---------------------------------------------.
(c) If 3(a) above is checked AND if the Transferee will not pay
the full purchase price for the transfer of this Security on
or prior to the date of transfer indicate when such purchase
price will be paid:
---------------------------------------------.
A-14
<PAGE>
----------------------------------.
TO BE COMPLETED BY TRANSFEREE IF 2(b) ABOVE IS CHECKED AND THE TRANSFEROR IS NOT
A QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated:
------------------------ ---------------------------------------
NOTICE: To be executed by an officer.
TO BE COMPLETED BY TRANSFEREE IF 2(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S. Person" (as
defined in Regulation S under the Securities Act of 1933, as amended).
Dated:
------------------------ ---------------------------------------
NOTICE: To be executed by an officer.
If none of the boxes under Section 2 of this certificate is checked or if any of
the above representations required to be made by the Transferee is not made, the
Registrar shall not be obligated to register this Security in the name of any
person other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 3(a) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE
COMPANY.
Dated:
------------------------ ---------------------------------------------
NOTICE: The signature of the Holder to this
assignment must correspond with the
name as written upon the face of
this Security particular, without
alteration or enlargement or any
change whatsoever.
A-15
<PAGE>
EXHIBIT B
INVESTOR LETTER OF REPRESENTATION
Tower Automotive, Inc.
c/o the Trustee
Ladies and Gentlemen:
This letter is delivered by the undersigned to request a transfer of
$________ principal amount of the 5% Convertible Subordinated Notes due 2004
(the "Notes") of Tower Automotive, Inc. (the "Company"). The Notes are
described in that certain Offering Memorandum (the "Offering Memorandum") dated
July 23, 1997 relating to the offering of the Notes. We acknowledge receipt of
the Offering Memorandum and acknowledge that we have read the Offering
Memorandum, have had access to such financial and other information and have
been afforded the opportunity to ask such questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection with our
decision to purchase the Notes.
Upon transfer the Notes would be registered in the name of the undersigned:
Name:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------
Taxpayer ID Number:
-------------------------------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes for
investment purposes and not with a view to, or for offer or sale in connection
with any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risk of our investment in the Notes and invest in or
purchase securities similar to the Notes in the normal course of our business,
and we, and any accounts for which we are acting, are each able to bear the
economic risk of our or its investment. We confirm that neither the Company nor
any person acting on its behalf has offered to sell the Notes by, and that we
have not been made aware of the offering of the Notes by, any form of general
solicitation or general advertising,
B-1
<PAGE>
including, but not limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio.
2. We understand that the Notes and the Common Stock issuable upon
conversion of the Notes (the Notes and such Common Stock are collectively
referred to herein as "Restricted Securities") have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Notes are "restricted
securities" within the meaning of Rule 144 under the Securities Act and to
offer, sell or otherwise transfer such Notes prior to the date which is three
years after the later of the date of original issue (or any predecessor thereto)
(the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) pursuant to Rule 144A under the Securities Act, for so
long as it is available, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A under the Securities Act (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of an
institutional "accredited investor," in each case, with respect to the Notes, or
(f) pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed to
be made pursuant to clause (e) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Company and the trustee (the "Trustee") under the
indenture, dated as of July 28, 1997, between the Company and the Trustee
relating to the Notes, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is
acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer,
prior to the Resale Restriction Termination Date of the Restricted Securities
pursuant to clause (d), (e) or (f) above to require the delivery of an opinion
of counsel, certifications and/or other information satisfactory to the Company
and the Trustee.
3. We understand that the Notes will be in the form of definitive
physical certificates bearing the legend set forth in clause (4) in the "Notice
to Investors" section of the Offering Memorandum.
We acknowledge that you, the Initial Purchasers and others will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations and warranties
herein ceases to be accurate and complete.
B-2
<PAGE>
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
-----------------------------
By:
--------------------------
B-3
<PAGE>
EXHIBIT C
FORM OF CONVERSION NOTICE
TO: Tower Automotive, Inc.
The undersigned owner of this Security hereby: (i) irrevocably exercises
the option to convert this Security, or the portion hereof below designated, for
shares of Common Stock of Tower Automotive, Inc. in accordance with the terms of
this Indenture referred to in this Security and (ii) directs that such shares of
Common Stock deliverable upon the conversion, together with any check in payment
for fractional shares and any Security(ies) representing any unconverted
principal amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares are to be delivered
registered in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required
to be paid by the undersigned on account of interest accompanies this Security.
Dated:
----------------
-----------------------------
Signature
Fill in for registration of shares if to be delivered, and of Securities if
to be issued, otherwise than to and in the name of the registered holder.
-----------------------------
Social Security or other
Taxpayer Identifying Number
- --------------------------------
(Name)
- --------------------------------
(Street Address)
- --------------------------------
(City, State and Zip Code)
(Please print name and address)
Principal amount to be converted:
(if less than all)
$
---------------------------------
<PAGE>
Exhibit 4.6
-----------
REGISTRATION RIGHTS AGREEMENT
Dated as of July 29, 1997
by and among
Tower Automotive, Inc.
and
Donaldson, Lufkin & Jenrette
Securities Corporation
Robert W. Baird & Co. Incorporated
PaineWebber Incorporated
BT Securities Corporation
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of July 29, 1997 by and among Tower Automotive, Inc., a Delaware
corporation (the "COMPANY") and Donaldson, Lufkin & Jenrette Securities
Corporation, Robert W. Baird & Co. Incorporated, PaineWebber Incorporated and BT
Securities Corporation (each an "INITIAL PURCHASER" and, collectively, the
"INITIAL PURCHASERS"), each of whom has agreed to purchase the Company's 5%
Convertible Subordinated Notes due 2004 (the "NOTES") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated July 23,
1997 (the "PURCHASE AGREEMENT"), by and among the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the Notes,
the Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 9 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the City
of New York, or in the city of the corporate trust office of the Trustee, on
which banks are authorized to close.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
DAMAGES PAYMENT DATE: With respect to the Notes, each Interest Payment
Date.
DEFINITIVE SECURITIES: As defined in the Indenture.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FILING DATE: The 90th day after the Closing Date.
GLOBAL NOTEHOLDER: Means each holder of a Global Security (as defined in
the Indenture).
HOLDERS: As defined in Section 2 hereof.
<PAGE>
INDEMNIFIED HOLDER: As defined in Section 7(a) hereof.
INDENTURE: The Indenture, dated the Closing Date, between the Company and
Bank of New York, as trustee (the "TRUSTEE"), pursuant to which the Notes are to
be issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
NOTES: Up to $200,000,000 aggregate principal amount of 5% Convertible
Subordinated Notes due 2004 of the Company being issued (or authorized to be
issued) pursuant to the Indenture.
PERSON: An individual, partnership, corporation, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date, each Person who
is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 4 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company that
covers any of the Transfer Restricted Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
SHELF REGISTRATION STATEMENT: As defined in Section 3 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: The Notes and the shares of Common Stock
into which the Notes are convertible, upon original issuance thereof, and at all
times subsequent thereto, until in the case of any such Note or share, (a) the
date on which it has been registered effectively pursuant to the Securities Act
and disposed of in accordance with the Registration Statement relating to it,
(b) the date on which either such Note or the shares of Common Stock issued upon
conversion of such Note are distributed to the public pursuant to Rule 144 (or
any similar provisions then in effect) or are salable pursuant to Rule 144(k)
promulgated by the Commission pursuant to the Securities Act or (c) the date on
which it ceases to be outstanding.
2
<PAGE>
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) SHELF REGISTRATION. The Company agrees to file with the Commission as
promptly as reasonably practicable after the Closing Date, but in no event later
than the Filing Date, a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 under the Act covering all of the Transfer
Restricted Securities (the "Shelf Registration Statement"). The Company shall
use its best efforts to cause such Shelf Registration Statement to become
effective on or prior to 90 days after the Filing Date. The Company shall use
its best efforts to keep the Shelf Registration Statement discussed in this
Section 3(a) continuously effective, supplemented and amended as required by and
subject to the provisions of Sections 5(b) and (c) hereof to the extent
necessary to ensure that it is available for sales of Transfer Restricted
Securities by the Holders thereof entitled to the benefit of this Section 3(a),
and to ensure that it conforms with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of at least two years (as extended pursuant to Section
5(c)) following the Closing Date; provided, however, that the Company shall not
be required to maintain the effectiveness of such Shelf Registration Statement
beyond the period set forth in subparagraph (k) of Rule 144 under the Act.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to include any of its Transfer Restricted Securities in any Shelf
Registration Statement or receive Liquidated Damages pursuant to Section 4
hereof in the event that such Holder fails to deliver such information within
the specified period; provided, however, that when such Holder furnishes such
information to the Company, such Holder shall be entitled to receive Liquidated
Damages, if any, from the date such Holder furnished such information and shall
be entitled to include its Transfer Restricted Securities in the Registration
Statement. Notwithstanding the foregoing, the Company shall not be required to
file a post-effective amendment to its Registration Statement to permit a Holder
to include its Transfer Restricted Securities pursuant to the preceding sentence
more than twice annually. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in
3
<PAGE>
order to make the information previously furnished to the Company by such Holder
not materially misleading.
(c) Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities shall have the right to sell their transfer Restricted
Securities pursuant to an Underwritten Offering on one occasion.
SECTION 4. LIQUIDATED DAMAGES
If (i) any Shelf Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Shelf Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, or (iii) any Shelf Registration Statement
required by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose without
being succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective
immediately (each such event referred to in clauses (i) through (iii), a
"REGISTRATION DEFAULT"), then the Company agrees to pay liquidated damages to
each Holder of Transfer Restricted Securities with respect to the first 90-day
period immediately following the occurrence of such Registration Default, in an
amount equal to $.05 per week per $1,000 principal amount of Notes and, if
applicable, an equivalent amount per week per share (subject to adjustments in
the event of stock splits, stock recombinations, stock dividends and the like)
of Common Stock constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages shall increase by an additional $.05 per week
per $1,000 in principal amount of Notes and, if applicable, by an equivalent
amount per week per share (subject to adjustment as set forth above) of Common
Stock constituting Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.25 per week per $1,000 principal
amount of Notes or, if applicable, by an equivalent amount per week per share
(subject to adjustment as set forth above) of Common Stock constituting Transfer
Restricted Securities. Notwithstanding anything to the contrary set forth
herein, (1) upon filing of the Shelf Registration Statement, in the case of (i)
above, (2) upon the effectiveness of the Shelf Registration Statement, in the
case of (ii) above, or (3) upon the filing of a prospectus supplement, a
post-effective amendment to the Shelf Registration Statement, an additional
Registration Statement or any other document with the Commission that causes the
Shelf Registration Statement to again be declared effective or made usable in
the case of (iii) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), or (iii),
as applicable, shall cease. Notwithstanding the foregoing, Liquidated Damages
shall not accrue under (iii) above if management of the Company shall have in
good faith determined that there are valid business reasons to withdraw or
suspend the use of the Shelf Registration Statement for a period of no more than
90 days within any 365 day period and a new Registration Statement shall have
been declared effective or the use of the Shelf Registration Statement shall be
restored no later than the end of such period.
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All accrued liquidated damages shall be paid to the Global Noteholder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Definitive Securities by mailing checks to their registered addresses
on each Damages Payment Date. All obligations of the Company set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
(a) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 5(b) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 3(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(b) GENERAL PROVISIONS. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities, the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 of this Agreement, as applicable. Upon
the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement, (1) in the case of clause (A), correcting any such
misstatement or omission, and (2) in the case of clauses (A) and (B), use
its best efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter; provided,
however, that the Company may also file any other document with the
Commission that causes the Shelf Registration Statement to again be
declared effective or made usable for resale of Transfer Restricted
Securities.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 hereof, or such shorter period as will terminate when
all Transfer Restricted Securities covered by such Registration Statement
have been sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule
424
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under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company shall use its best efforts
to obtain the withdrawal or lifting of such order at the earliest possible
time;
(iv) furnish to the Initial Purchaser(s), each selling Holder
named in any Registration Statement or Prospectus and each of the
underwriter(s) in connection with such sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement
or Prospectus, which documents will be subject to the review and comment of
such Holders and underwriter(s) in connection with such sale, if any, for a
period of at least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement to
any such Registration Statement or Prospectus to which the selling Holders
of the Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such sale, if any, shall
reasonably object within five Business Days after the receipt thereof. A
selling Holder or underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed, contains
a material misstatement or omission or fails to comply with the applicable
requirements of the Act;
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(v) provide copies of any document that has been incorporated by
reference into a Registration Statement or Prospectus to the Initial
Purchasers and selling Holders;
(vi) make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders or any of such underwriter(s) in
connection with an Underwritten Offering, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and prior
to its effectiveness, subject to an undertaking to maintain the
confidentiality of such information;
(vii) if requested by any selling Holders or the underwriter(s) in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company hereby consents
to the use (in accordance with law) of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all such
other actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement as may be reasonably
requested by any underwriter in connection with any sale or resale pursuant
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to any Registration Statement contemplated by this Agreement in connection
with an Underwritten Offering, and in such connection, the Company shall:
(A) furnish (or in the case of paragraphs (2) and (3), use its best
efforts to furnish) to each underwriter, if any, upon the effectiveness of
the Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement signed on behalf of the Company by (x)
the President or any Vice President and (y) a principal financial or
accounting officer of the Company, confirming, as of the date thereof,
the matters set forth in paragraphs (a) through (d) of Section 9 of
the Purchase Agreement and such other similar matters as the
underwriter(s) may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Registration Statement of counsel for the Company covering matters
similar to those set forth in paragraph (e) of Section 9 of the
Purchase Agreement and such other matter as the underwriters may
reasonably request, and in any event including a statement to the
effect that such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
independent public accountants for the Company and have considered the
matters required to be stated therein and the statements contained
therein, although such counsel has not independently verified the
accuracy, completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing, no facts came to
such counsel's attention that caused such counsel to believe that the
Registration Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained in such
Registration Statement as of its date contained an untrue statement of
a material fact or omitted 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. Without limiting the
foregoing, such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration
Statement contemplated by this Agreement or the related Prospectus;
and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Registration Statement from the Company's
independent accountants, in the customary form and covering matters of
the type customarily covered in comfort letters to underwriters in
connection with primary underwritten offerings, and affirming the
matters set forth in the comfort letters delivered pursuant to Section
9 of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the underwriting
agreement, if any, in connection with any sale or resale pursuant to any
Registration Statement
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the indemnification provisions and procedures of Section 7 hereof with
respect to all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the underwriter(s), if any, to evidence compliance
with clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (x).
The above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company contemplated in (A)(1) above cease
to be true and correct, the Company shall so advise the underwriter(s) promptly
and if requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may reasonably request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; PROVIDED, HOWEVER, that the Company
shall not be required to register or qualify as a foreign corporation where
it is not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the Holders
or the underwriter(s), if any, may reasonably request at least two Business
Days prior to such sale of Transfer Restricted Securities;
(xiii) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi)
above;
(xiv) subject to Section 5(b)(i), if any fact or event
contemplated by Section 5(b)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not
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<PAGE>
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvi) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its best efforts to cause such Registration Statement to
become effective and approved by such governmental agencies or authorities
as may be necessary to enable the Holders selling Transfer Restricted
Securities to consummate the disposition of such Transfer Restricted
Securities;
(xvii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to any applicable Registration Statement,
as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a
twelve-month period beginning after the effective date of the Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under the
Act);
(xviii) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee and
the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use its best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner;
(xix) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act; and
(xx) concurrently with the effectiveness of the Shelf
Registration Agreement, list all Common Stock covered by such Registration
Statement on any securities exchange on which the Common Stock is then
listed.
(c) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 5(b)(i) or any notice from the Company of the existence of any fact of
the kind described in Section 5(b)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities
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pursuant to the Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 5(b)(xiv)
hereof, or until it is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (the
"Advice"). If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of either such
notice. In the event the Company shall give any such notice, the time period
regarding the effectiveness of such Registration Statement set forth in Section
3, as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 5(b)(i)
or Section 5(b)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 5(b)(xv) hereof
or shall have received the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made by any Holder
with the NASD (and, if applicable, the reasonable fees and expenses of any
"qualified independent underwriter") and its counsel that may be required by the
rules and regulations of the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing, messenger and delivery services and telephone; (iv) all
fees and disbursements of counsel for the Company and one designated counsel for
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Notes and Common Stock on a national securities
exchange pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with the Shelf Registration Statement required by this
Agreement, the Company will reimburse the Holders of Transfer Restricted
Securities being registered pursuant to the Shelf Registration Statement for the
reasonable fees and disbursements of not more than one counsel, who shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
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SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each Holder and
(ii) each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) any Holder (any of the persons referred
to in this clause (ii) being hereinafter referred to as a "controlling person")
and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"INDEMNIFIED HOLDER"), to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by an untrue statement or omission or alleged untrue statement or
omission that is made in reliance upon and in conformity with information
relating to any of the Holders furnished in writing to the Company by any of the
Holders expressly for use therein. No indemnification shall be made under this
Section 7(a) if the Prospectus is used after notice is given by the Company
pursuant to 5(c) or with respect to a preliminary Prospectus if a copy of the
final Prospectus was not sent or given by the Indemnified Holder or his agent if
required by law to be so delivered and if such final Prospectus had been
delivered, such delivery would have completely cured the defect giving rise to
such loss, claim, damage, liability, judgment, action or expense.
In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of the
Indemnified Holders with respect to which indemnity may be sought against the
Company, such Indemnified Holder (or the Indemnified Holder controlled by such
controlling person) shall promptly notify the Company in writing (PROVIDED, that
the failure to give such notice shall not relieve the Company of its obligations
pursuant to this Agreement). Such Indemnified Holder shall have the right to
employ its own counsel in any such action and the reasonable fees and expenses
of such counsel shall be paid, as incurred, by the Company. The Company shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for such Indemnified Holders, which
firm shall be designated by the Holders. The Company shall not be liable for
any settlement of any such action or proceeding effected without the Company's
prior written consent, which consent shall not be withheld unreasonably, and the
Company agrees to indemnify and hold harmless each Indemnified Holder from and
against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Company. The
Company shall not, without the prior written consent of each
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Indemnified Holder, settle or compromise or consent to the entry of judgment in
or otherwise seek to terminate any pending or threatened action, claim,
litigation or proceeding involving an Indemnified Holder unless such settlement,
compromise, consent or termination includes an unconditional release of such
Indemnified Holder from all liability arising out of such action, claim,
litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and its directors,
officers, and any person controlling (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company, and its officers, directors,
partners, employees, representatives and agents of each such person, to the same
extent as the foregoing indemnity from the Company to each of the Indemnified
Holders, but only with respect to claims and actions based on information
relating to such Holder furnished in writing by such Holder expressly for use in
any Registration Statement. In case any action or proceeding shall be brought
against the Company or its directors or officers or any such controlling person
in respect of which indemnity may be sought against a Holder of Transfer
Restricted Securities, such Holder shall have the rights and duties given the
Company, and the Company, such directors or officers or such controlling person
shall have the rights and duties given to each Holder by the preceding
paragraph. In no event shall any Holder be liable or responsible for any amount
in excess of the amount by which the total received by such Holder with respect
to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under Section 7(a) or Section 7(b) hereof (other than
by reason of exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the Holders, on the other hand, from
their sale of Transfer Restricted Securities or if such allocation is not
permitted by applicable law, the relative fault of the Company, on the one
hand, and of the Indemnified Holder, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of
the Indemnified Holder, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Indemnified Holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 7(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
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The Company and each Holder of Transfer Restricted Securities agree that it
would not be just and equitable if contribution pursuant to this Section 7(c)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no Holder or
its related Indemnified Holders shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Transfer Restricted Securities
pursuant to a Registration Statement exceeds the sum of (A) the amount paid by
such Holder for such Transfer Restricted Securities PLUS (B) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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 Holders' obligations to contribute
pursuant to this Section 7(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities and not joint.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, to make available, upon request of any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 9. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in customary underwriting arrangements entered into in
connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.
SECTION 10. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment bankers
and manager or managers for any Underwritten Offering that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering and must
be reasonably acceptable to the Company. Such investment bankers and managers
are referred to herein as the "underwriters."
14
<PAGE>
SECTION 11. MISCELLANEOUS
(a) REMEDIES. Each Holder, in addition to being entitled to exercise all
rights provided herein, in the Indenture, the Purchase Agreement or granted by
law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by them of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 4
hereof and this Section 11(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the then outstanding Transfer Restricted
Securities (on a fully diluted basis). Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Transfer Restricted Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders of Transfer
Restricted Securities may be given by Holders of a majority of the Transfer
Restricted Securities (on a fully converted basis) being sold by such Holders
pursuant to such Registration Statement; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar (as defined in the Indenture) under the Indenture, with a
copy to the Registrar under the Indenture; and
15
<PAGE>
(ii) if to the Company:
Tower Automotive, Inc.
4508 IDS Center
Minneapolis, Minnesota 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
With a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, Illinois 60601
Telecopier No.: 312-861-2200
Attention: Dennis M. Myers
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; PROVIDED, HOWEVER, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the
16
<PAGE>
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
17
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TOWER AUTOMOTIVE, INC.
By: /S/ CARL E. NELSON
---------------------------
Title: Assistant Secretary
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
PAINEWEBBER INCORPORATED
BT SECURITIES CORPORATION
- ------------------------------------
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: /S/ PATRICK J. FALLON
---------------------------------
Title: Managing Director
<PAGE>
KIRKLAND & ELLIS
PARTNERSHIPS INCLUDING PROFESSIONAL CORPORATIONS
200 East Randolph Drive EXHIBIT 5.1
Chicago, Illinois 60601
To Call Writer Direct: 312 861-2000 Facsimile:
312 861-2000 312 861-2200
October 24, 1997
Tower Automotive, Inc.
4508 IDS Center
Minneapolis, MN 55402
Re: Tower Automotive, Inc.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We are acting as special counsel to Tower Automotive, Inc., a Delaware
corporation (the "Company"), in connection with its registration statement on
Form S-3 (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission"), relating to resales of up to $200,000,000
aggregate principal amount of the Company's 5% Convertible Subordinated Notes
due 2004 (the "Notes") and the 3,864,734 shares (as such number may be adjusted
as set forth in the Indenture, dated as of July 28, 1997 (the "Indenture"),
between the Company and The Bank of New York, as trustee (the "Trustee")) of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
issuable upon conversion of the Notes in accordance with the Indenture. This
opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K in connection with the
Registration Statement
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. An executed copy of the Indenture.
3. Executed copies of the Notes, each dated as of July 29, 1997.
4. The Amended and Restated Certificate of Incorporation of the
Company, as certified by the Secretary of the State of the State
of Delaware on July 23, 1997.
<PAGE>
Tower Automotive, Inc.
October 24, 1997
Page 2
5. The Amended and Restated Bylaws of the Company.
6 Resolutions of the Board of Directors of the Company adopted at a
meeting of the Board of Directors of the Company on July 21,
1997, and resolutions adopted by the Pricing Committee of the
Board of Directors on July 23, 1997, relating to the offering of
the Notes and arrangements in connection therewith.
7. Copies of all certificates and other documents delivered at the
closing of the purchase and sale of the Notes.
For purposes of this opinion letter, we have assumed the authenticity
of all documents submitted to us as originals, the conformity to the originals
of all documents submitted to us as copies and the authenticity of the originals
of all documents submitted to us as copies. We have also assumed the legal
capacity of all natural persons, the genuineness of the signatures of persons
signing all documents in connection with which this opinion is rendered, the
authority of such persons signing on behalf of the parties thereto other than
the Company and the due authorization, execution and delivery of all documents
by the parties thereto other than the Company. As to any facts material to the
opinions expressed herein, we have relied upon the statements and
representations of officers and other representations of the Company and others.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal law of the United
States of America, and represents our opinion as to how that issue would be
resolved were it to be considered by the highest court in the jurisdiction which
enacted such law. The manner in which any particular issue would be treated in
any actual court case would depend in part on facts and circumstances particular
to the case, and this opinion letter is not intended to guarantee the outcome of
any legal dispute which may arise in the future.
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we hereby advise
you that in our opinion:
1. The Notes constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms.
<PAGE>
Tower Automotive, Inc.
October 24, 1997
Page 3
2. The shares of Common Stock issuable upon conversion of the Notes,
when issued in accordance with the terms of the Notes, will be validly issued,
fully paid and non-assessable.
Our opinion in paragraph 1 of this opinion letter is subject to: (i)
the effect of bankruptcy, insolvency, fraudulent conveyance and other similar
laws and judicially developed doctrines in this area such as substantive
consolidation and equitable subordination; (ii) the effect of general principles
of equity; and (iii) other commonly recognized statutory and judicial
constraints on enforceability including statutes of limitations. "General
principles of equity" include but are not limited to: principles which limit the
availability of specific performance and injunctive relief; principles which
limit the availability of a remedy under certain circumstances where another
remedy has been elected; principles requiring reasonableness, good faith and
fair dealing in the performance and enforcement of an agreement by the party
seeking enforcement; principles which may permit a party to cure a material
failure to perform its obligations; and principles affording equitable defenses
such as waiver, laches and estoppel. It is possible that some of the terms of
the Notes and the Indenture may not prove enforceable against the Company for
reasons other than those listed in this opinion letter should an actual
enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations in this letter) such
unenforceability would not in our opinion prevent the holders of the Notes from
realizing the principal benefits purported to be provided by the Notes and the
Indenture.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the Notes and the Common Stock
issuable upon conversion of the Notes.
This opinion letter is limited to the specific issues addressed
herein, and no opinion may be inferred or implied beyond that expressly stated
herein. We assume no obligation to revise or supplement this opinion should the
present laws of the State of New York, the General Corporation Law of the State
of Delaware or the federal law of the United States be changed by legislative
action, judicial decision or otherwise.
We hereby consent to the filing of this opinion letter with the
Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading
<PAGE>
Tower Automotive, Inc.
October 24, 1997
Page 4
"Legal Matters" in the Registration Statement. In giving this consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Commission.
Very truly yours,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS
<PAGE>
EXHIBIT 12.1
TOWER AUTOMOTIVE, INC.
STATEMENT AND COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
----------------------------------------------- ----------------------------------
Pro Forma Pro Forma
1994 1995 1996 1996 1996 1997 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Pre tax earnings $ 12,403 $ 20,121 $ 34,337 $ 80,061 $ 14,160 $ 33,157 $ 29,301
Fixed charges 2,351 3,658 8,551 44,879 3,863 11,839 22,069
Less: Capitalized interest - (1,157) - (1,670) - (709) (1,701)
--------- --------- --------- --------- --------- --------- ---------
Net fixed charges 2,351 2,501 8,551 43,209 3,863 11,130 20,368
--------- --------- --------- --------- --------- --------- ---------
EARNINGS $ 14,754 $ 22,622 $ 42,888 $ 123,270 $ 18,023 $ 44,287 $ 49,669
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
FIXED CHARGES:
Interest expense $ 1,956 $ 2,027 $ 7,636 $ 32,817 $ 3,405 $ 10,689 $ 15,741
Capitalized interest - 1,157 - 1,670 - 709 1,701
Interest factor of rental expense 271 311 660 10,137 330 297 4,483
Amortization of debt expense 124 163 255 255 128 144 144
--------- --------- --------- --------- --------- --------- ---------
TOTAL FIXED CHARGES $ 2,351 $ 3,658 $ 8,551 $ 44,879 $ 3,863 $ 11,839 $ 22,069
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
EARNINGS TO FIXED CHARGES 6.3 6.2 5.0 2.7 4.7 3.7 2.3
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE>
TOWER AUTOMOTIVE, INC.
STATEMENT AND COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
----------------------------------------------- ----------------------------------
Pro Forma Pro Forma
1994 1995 1996 1996 1996 1997 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Pre tax earnings $ 12,403 $ 20,121 $ 34,337 $ 80,061 $ 14,160 $ 33,157 $ 29,301
Fixed charges 2,351 3,658 8,551 44,879 3,863 11,839 22,069
Less: Capitalized interest - (1,157) - (1,670) - (709) (1,701)
--------- --------- --------- --------- --------- --------- ---------
Net fixed charges 2,351 2,501 8,551 43,209 3,863 11,130 20,368
--------- --------- --------- --------- --------- --------- ---------
EARNINGS $ 14,754 $ 22,622 $ 42,888 $ 123,270 $ 18,023 $ 44,287 $ 49,669
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
FIXED CHARGES:
Interest expense $ 1,956 $ 2,027 $ 7,636 $ 32,817 $ 3,405 $ 10,689 $ 15,741
Capitalized interest - 1,157 - 1,670 - 709 1,701
APC rental interest - - - 9,477 - - 4,186
Amortization of debt costs 124 163 255 255 128 144 144
Tower rental interest 271 311 660 660 330 297 297
--------- --------- --------- --------- --------- --------- ---------
TOTAL FIXED CHARGES $ 2,351 $ 3,658 $ 8,551 $ 44,879 $ 3,863 $ 11,839 $ 22,069
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
EARNINGS TO FIXED CHARGES 6.3 6.2 5.0 2.7 4.7 3.7 2.3
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 18, 1997
included in Tower Automotive, Inc.'s Form 10-K for the year ended December 31,
1996 and to all references to our Firm included in this Registration Statement.
Arthur Andersen LLP
Minneapolis, Minnesota
October 27, 1997
<PAGE>
Exhibit 25.1
=============================================================================
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)
--------------------------------------------------
TOWER AUTOMOTIVE, INC.
(Exact name of obligor as specified in its charter)
Delaware 41-1746238
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
4508 IDS Center
Minneapolis, Minnesota 55402
(Address of principal executive offices) (Zip code)
----------------------
5% Convertible Subordinated Notes due 2004
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of 2 Rector Street, New York,
the State of 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
(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.)
-2-
<PAGE>
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.
-3-
<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 21st day of October, 1997.
THE BANK OF NEW YORK
By: /s/WALTER N. GITLIN
--------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
- --------------------------------------------------------------------------------
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.
Dollar Amounts
ASSETS in Thousands
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
<PAGE>
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
-----------
-----------
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
- --------------------------------------------------------------------------------
