1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 2001.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DURA OPERATING CORP.*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3714 38-2961431
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION NUMBER) IDENTIFICATION NO.)
------------------------
DURA AUTOMOTIVE SYSTEMS, INC.*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3714 38-3185711
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION NUMBER) IDENTIFICATION NO.)
4508 IDS CENTER, MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 342-2311
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
DAVID R. BOVEE
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND ASSISTANT SECRETARY
DURA AUTOMOTIVE SYSTEMS, INC.
2791 RESEARCH DRIVE, ROCHESTER HILLS, MI 48309
TELEPHONE: (248) 299-7500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
DENNIS M. MYERS, ESQ.
KIRKLAND & ELLIS
200 E. RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
TELEPHONE: (312) 861-2000
* The companies listed on the next page are also included in this Form S-4
Registration Statement as additional Registrants.
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: The exchange will occur as soon as practicable after the effective date
of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(2) REGISTRATION FEE(1)
- ------------------------------------------------------------------------------------------------------------------------
Series D 9% Senior Subordinated Notes due 2009..... $458,500,000 100% $114,625(1)
- ------------------------------------------------------------------------------------------------------------------------
Guarantees on Senior Subordinated Notes(2)......... -- -- (3)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
(1) Calculated in accordance with Rule 457 under the Securities Act of 1933, as
amended.
(2) All subsidiary guarantors are wholly owned subsidiaries of the Registrant
and have each guaranteed the Notes being registered.
(3) Pursuant to Rule 457(n), no separate fee is payable with respect to the
guarantees being registered hereby.
------------------------
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
JURISDICTION OF I.R.S. EMPLOYER
EXACT NAME OF ADDITIONAL REGISTRANTS* FORMATION IDENTIFICATION NO.
- ------------------------------------- --------------- ------------------
Adwest Electronics, Inc..................................... Delaware 38-3223055
Atwood Automotive Inc. ..................................... Michigan 38-2112709
Atwood Mobile Products, Inc. ............................... Illinois 38-4334203
Dura Automotive Systems Cable Operations, Inc............... Delaware 38-3383557
Dura Automotive Systems of Indiana, Inc..................... Indiana 35-1188181
Mark I Molded Plastics of Tennessee, Inc.................... Tennessee 62-1109669
Universal Tool & Stamping Company Inc....................... Indiana 35-0797817
- ---------------
* The address for each of the additional Registrants is c/o Dura Automotive
Systems, Inc., 2791 Research Drive, Rochester Hills, Michigan 48309. The
primary standard industrial classification number for each of the additional
Registrants is 3714.
3
THIS INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT AN OFFER TO BUY
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 19, 2001
PROSPECTUS [DURA LOGO]
DURA OPERATING CORP.
EXCHANGE OFFER FOR
$300,000,000
SERIES B 9% SENIOR SUBORDINATED NOTES DUE 2009
AND
$158,500,000
SERIES C 9% SENIOR SUBORDINATED NOTES DUE 2009
- --------------------------------------------------------------------------------
WE ARE OFFERING TO EXCHANGE AN AGGREGATE PRINCIPAL AMOUNT OF UP TO:
- - $300,000,000 OF OUR NEW SERIES D 9% SENIOR SUBORDINATED NOTES DUE 2009 FOR A
LIKE AMOUNT OF OUR OUTSTANDING SERIES B 9% SENIOR SUBORDINATED NOTES DUE 2009;
AND
- - $158,500,000 OF OUR NEW SERIES D 9% SENIOR SUBORDINATED NOTES DUE 2009 FOR A
LIKE AMOUNT OF OUR OUTSTANDING SERIES C 9% SENIOR SUBORDINATED NOTES DUE 2009.
MATERIAL TERMS OF EXCHANGE OFFER
- - The terms of the exchange notes to be issued in the exchange offer are
substantially identical to the outstanding series B notes. The terms of the
exchange notes are also substantially identical to the outstanding series C
notes, except that certain transfer restrictions and registration rights
relating to the outstanding series C notes will not apply to the exchange
notes.
- - Expires 5:00 p.m., New York City time, , 2001, unless extended.
- - We believe that, subject to certain exceptions, the exchange notes may be
offered for resale, resold and otherwise transferred by you without compliance
with the registration and prospectus delivery provisions of the Securities
Act.
- - Based on the advice of counsel, the exchange of the outstanding notes will not
be a taxable exchange for U.S. federal income tax purposes.
- - The exchange offer is subject to customary conditions, including the condition
that the exchange offer will not violate applicable law or any applicable
interpretation of the Staff of the SEC.
- - We will not receive any proceeds from the exchange offer.
- - We intend to apply to list the exchange notes on the Luxembourg Stock Exchange
in accordance with the rules of such exchange.
- --------------------------------------------------------------------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 8 OF
THIS PROSPECTUS.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES
TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
, 2001
4
UNTIL , 2001, ALL DEALERS THAT BUY, SELL OR TRADE THE EXCHANGE
NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS'
OBLIGATIONS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS AND SUBSCRIPTIONS.
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT
RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL OR
SOLICIT ANY OFFER TO BUY ANY NOTES IN ANY JURISDICTION WHERE THE OFFER,
SOLICITATION OR SALE IS UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT
AS OF THE DATE IT BEARS.
------------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.......................................... 1
Risk Factors................................................ 8
Use of Proceeds............................................. 16
The Exchange Offer.......................................... 17
Capitalization.............................................. 25
Selected Historical Financial Data.......................... 26
Description of Notes........................................ 28
Certain United States Federal Tax Considerations............ 66
Plan of Distribution........................................ 70
Legal Matters............................................... 72
Independent Public Accountants.............................. 72
General Information......................................... 72
In this prospectus, unless the context otherwise requires, we refer to Dura
Operating Corp. as the "issuer." Dura Operating Corp. is a wholly owned
subsidiary of Dura Automotive Systems, Inc., which we refer to in this
prospectus as "Parent." The terms "the Company," "Dura," "we," "us" and "our"
and other similar terms mean Parent and all of its subsidiaries, including the
issuer.
i
5
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including information we have incorporated into this
prospectus by reference, contains forward-looking statements that are subject to
risks and uncertainties. You should not place undue reliance on those statements
because they speak only as of the date of this prospectus. Forward-looking
statements include information concerning our possible or assumed future results
of operations. These statements often include words such as "believe," "expect,"
"anticipate," "intend," "plan," "estimate," or similar expressions. These
statements are based on assumptions that we have made in light of our experience
in the industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we believe are
appropriate in the circumstances. As you read and consider this prospectus, you
should understand that these statements are not guarantees of performance or
results. They involve risks, uncertainties and assumptions. Although we believe
that these forward-looking statements are based on reasonable assumptions, you
should be aware that many factors could affect our actual financial results or
results of operations and could cause actual results to differ materially from
those in the forward-looking statements. These factors include:
- general economic or business conditions affecting the automotive industry
(which is dependent on consumer spending), either nationally or
regionally, being less favorable than expected;
- our failure to develop or successfully introduce new products;
- increased competition in the automotive components supply market;
- unforeseen problems associated with international sales, including gains
and losses from foreign currency exchange;
- implementation of or changes in the laws, regulations or policies
governing the automotive industry that could negatively affect the
automotive components supply industry;
- changes in general economic conditions in the United States and Europe;
- exposure to product liability claims; and
- various other factors beyond our control.
All future written and oral forward-looking statements made by us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to above. Except for our ongoing
obligations to disclose material information as required by the federal
securities laws, we do not have any obligation or intention to release publicly
any revisions to any forward-looking statements to reflect events or
circumstances in the future or to reflect the occurrence of unanticipated
events. YOU SHOULD ALSO READ CAREFULLY THE FACTORS DESCRIBED IN THE "RISK
FACTORS" SECTION OF THIS PROSPECTUS.
MARKET, RANKING AND OTHER DATA
The data included in this prospectus regarding markets and ranking,
including the size of certain product markets and our position and the position
of our competitors within these markets, are based on independent industry
publications, reports from government agencies or other published industry
sources and our estimates based on our management's knowledge and experience in
the markets in which we operate. Our estimates have been based on information
obtained from our customers, distributors, suppliers, trade and business
organizations and other contacts in the markets in which we operate. We believe
these estimates to be accurate as of the date of this prospectus. However, this
information may prove to be inaccurate because of the method by which we
obtained some of the data for our estimates or because this information cannot
always be verified with complete certainty due to the limits on the availability
and reliability of raw data, the voluntary nature of the data gathering process
and other limitations and uncertainties inherent in a survey of market size. In
addition, consumption patterns and consumer preferences can and do change. As a
result, you should be aware that market, ranking and other similar data included
in this prospectus, and estimates and beliefs based on such data, may not be
reliable.
ii
6
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities and
Exchange Act of 1934 and file periodic reports and other information with the
SEC. These reports and other information may be inspected and copied at
prescribed rates at the Public Reference Room of the SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549 and should be available for inspection and copying
at the regional offices of the SEC located at 7 World Trade Center, Suite 1375,
New York, New York 10048 and at Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Information on the operation of the Public Reference
Room of the SEC may be obtained by calling the SEC at 1-800-SEC-0330. The SEC
also maintains a Web site that contains reports and other information that we
have filed electronically. The address of the site is http://www.sec.gov.
We will provide you without charge a copy of the exchange notes, the
indenture governing the exchange notes and the registration rights agreement
relating to our outstanding series C notes. You may request copies of these
documents by contacting us at: Dura Automotive Systems, Inc., 4508 IDS Center,
Minneapolis, Minnesota 55402 or calling us at (612) 342-2311, Attention:
Investor Relations.
INCORPORATION BY REFERENCE
This prospectus represents only a summary of the information presented in
this prospectus, and incorporates by reference certain documents we have filed
with the SEC.
The following documents are incorporated by reference into this prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 2000;
2. Proxy Statement on Schedule 14A filed with the SEC on April 17, 2001;
3. Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2001;
4. the audited financial statements as of and for the fiscal year ended
January 2, 1999 of Excel Industries, Inc., filed as Exhibit 99.A to the
Current Report on Form 8-K/A, filed with the SEC on June 18, 1999;
5. the audited financial statements as of and for the year ended June 30,
1998 and the unaudited financial statements as of and for the period
ended December 31, 1998 of Adwest Automotive Plc, filed as Exhibit 99.B
to the Current Report on Form 8-K/A, filed with the SEC on June 18,
1999; and
6. all documents filed by us with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
and before termination of the exchange offer.
References in this prospectus to this prospectus will be deemed to include
the documents incorporated by reference, which are an integral part of this
prospectus. You should obtain and review carefully copies of the documents
incorporated by reference. Any statement contained in the documents incorporated
by reference will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in a subsequently dated
document incorporated by reference or in this prospectus modifies or supersedes
the statement. Information that we file later with the SEC will automatically
update the information incorporated by reference and the information in this
prospectus. Any statement so modified or superseded will not be deemed, except
as so modified or superseded, to constitute a part of this prospectus. Any
person obtaining a copy of this prospectus may obtain without charge, upon
written request, a copy of the documents incorporated by reference. See "Where
You Can Find More Information."
iii
7
[THIS PAGE INTENTIONALLY LEFT BLANK]
8
PROSPECTUS SUMMARY
This summary contains basic information about our company and this exchange
offer. This summary does not contain all of the information that may be
important to you in deciding whether to participate in the exchange offer. We
encourage you to read the entire prospectus, including the financial data and
the information described under the heading "Risk Factors" and the other
documents to which we have referred you, prior to deciding whether to
participate in the exchange offer.
THE COMPANY
We are the world's largest independent designer and manufacturer of cockpit
sub-systems for the global automotive industry. We are also a leading global
supplier of seat mechanisms and structures, engineered assemblies, glass
systems, door modules and mobile products. Our products include:
- Cockpit Sub-Systems -- light duty and heavy duty automotive cables,
transmission gear shifter systems (manual and automatic), electronic and
traditional park brake systems, adjustable and traditional pedal systems,
electronic throttle controls, steering columns and components and cross
car beams;
- Seat Mechanisms -- 2, 4, 6 and 8-way power and manual seat adjusters,
complete seat structures and seat recliner assemblies;
- Engineered Assemblies -- underbody spare tire carriers, jacks and stowage
systems, hood and tailgate latch systems, hood/deck and door hinges,
engine control products, injection molded plastic products and
thixomolded magnesium components;
- Glass Systems -- glass encapsulated windows, manual and power backlite
assemblies, roof and side trim, 1, 2 or 3-sided glass modules, liftgate
modules, drop-door glass, hidden hardware glass and integrated greenhouse
systems;
- Door Modules -- door hardware modules, aluminum and steel body-in-white
door structures, side impact beams, power and manual window lift systems
and anti-pinch window systems; and
- Mobile Products -- components and systems for the recreational vehicle
market, including water heaters, heating systems, cooking appliances,
window systems, seating, doors and other hardware.
We sell our products to every major North American, Japanese and European
automotive original equipment manufacturer, or "OEM," including Ford, GM,
DaimlerChrysler, Volkswagen, BMW, PSA (Peugeot and Citroen), Renault, Toyota,
Nissan and Honda. We have 77 manufacturing and product development facilities
located in the United States, Australia, Brazil, Canada, the Czech Republic,
France, Germany, Mexico, Portugal, Spain and the United Kingdom. We also have a
presence in China, India and Japan through alliances, joint ventures or
technical licenses.
Our revenues have increased from $129.3 million in 1993 to $2.6 billion in
2000, representing a compound annual growth rate of approximately 54%. Over this
same period, our operating income margin has improved from 2.8% of revenues to
7.1% of revenues. This is the result of our successful acquisition strategy,
organic growth and disciplined manufacturing efficiency and productivity
initiatives related to both existing and acquired operations.
1
9
COMPETITIVE STRENGTHS
We believe that we possess a number of competitive strengths, including:
- Well Positioned to Take Advantage of Market Trends: We believe that we
are well positioned to meet the demands of OEMs for fewer, full-service
and globally positioned suppliers due to our advanced design
capabilities, ability to supply complete systems and integrated modules,
and our global production capabilities.
- Strong OEM Partnerships: We have formed strong partnerships with our
major OEM customers due to our high level of product quality, customer
service and product design and engineering capabilities.
- Well Positioned on Popular Product Platforms: We manufacture products
for many of the most popular car, light truck and sport utility vehicle
models, including all of the top ten selling vehicles in North America
for 2000.
- Significant Acquisition Experience: Our leadership team, the members of
which have an average of 20 years of experience in the automotive supply
industry, has successfully completed 15 acquisitions and two joint
ventures over the last five years.
BUSINESS STRATEGY
Our primary business objective is to capitalize on the consolidation,
system sourcing and globalization trends in the automotive supply industry in
order to continue to be the leading provider of the component parts and systems
that we supply to OEMs worldwide. Our operating strategy includes implementing
strategic initiatives designed to improve on operations, capitalizing on
opportunities to reduce costs and improve operational efficiency from prior
acquisitions and fostering a decentralized, participatory management system. We
believe that we can continue to grow by increasing our ability to provide
complete systems and modules to our OEM customers, increasing volume by adding
new customers and strengthening existing customer relationships by broadening
our range of products, continuing to expand our manufacturing operations into
new geographic markets and continuing to pursue selective acquisitions, joint
ventures and strategic alliances.
COMPANY BACKGROUND
Parent is a corporation organized under the laws of Delaware. Our principal
executive offices are located at 4508 IDS Center, Minneapolis, Minnesota 55402,
and our telephone number is (612) 342-2311.
2
10
PURPOSE OF THE EXCHANGE OFFER
On June 22, 2001, we sold, through a private placement exempt from the
registration requirements of the Securities Act of 1933, $158.5 million in
aggregate principal amount of our Series C Senior Subordinated Notes due 2009,
which we refer to in this prospectus as the outstanding series C notes. We had
previously sold on April 22, 1999 $300.0 million in aggregate principal amount
of our Series A Senior Subordinated Notes due 2009, all of which were
subsequently exchanged for a like principal amount of our registered Series B
Senior Subordinated Notes due 2009, which we refer to in this prospectus as our
outstanding series B notes. We refer to our outstanding series B notes and our
outstanding series C notes collectively as the outstanding notes in this
prospectus.
Simultaneously with the private placement of our outstanding series C
notes, we entered into a registration rights agreement with the initial
purchasers of the outstanding series C notes. Under the registration rights
agreement, we are required to use our reasonable best efforts to cause a
registration statement for substantially identical notes to become effective on
or before November 19, 2001. We refer to the notes to be registered under this
exchange offer registration statement as exchange notes in this prospectus. The
registration rights agreement requires us to pay liquidated damages to the
holders of the outstanding series C notes from December 19, 2001 until the
exchange offer is consummated. The exchange offer is intended to satisfy the
rights of holders of our outstanding series C notes under the registration
rights agreement. After the exchange offer, holders of outstanding series C
notes will no longer be entitled to any exchange or registration rights with
respect to their outstanding series C notes.
Holders of our outstanding series B notes may also exchange their
outstanding series B notes in the exchange offer. We have agreed to permit the
exchange of our outstanding series B notes for exchange notes in order to create
a single series of debt securities having a total outstanding principal amount
that is greater than that of either the outstanding series B notes or the
outstanding series C notes.
SUMMARY OF THE EXCHANGE OFFER
The Exchange Offer............ We are offering to exchange $458.5 million of
the exchange notes, which have been registered
under the Securities Act, for the $458.5
million in aggregate principal amount of our
outstanding notes. In order to be exchanged, an
outstanding note must be properly tendered and
accepted. All outstanding notes that are
validly tendered and not validly withdrawn will
be exchanged. We will issue the exchange notes
promptly after the expiration of the exchange
offer.
Resales....................... We believe that the exchange notes issued in
the exchange offer may be offered for resale,
resold and otherwise transferred by you without
compliance with the registration and prospectus
delivery provisions of the Securities Act
provided that:
- the exchange notes are being acquired in the
ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the exchange notes
issued to you in the exchange offer; and
- you are not an affiliate of ours.
If any of these conditions are not satisfied
and you transfer any exchange notes issued to
you in the exchange offer without delivering a
prospectus meeting the requirements of the
Securities Act or without an exemption from
registration of your exchange
3
11
notes from these requirements, you may incur
liability under the Securities Act. We will not
assume, nor will we indemnify you against, any
such liability.
Each broker-dealer that is issued exchange
notes in the exchange offer for its own account
in exchange for outstanding notes that were
acquired by that broker-dealer as a result of
market-making or other trading activities, must
acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act
in connection with any resale of the exchange
notes. A broker-dealer may use this prospectus
for an offer to resell, resale or other
transfer of the exchange notes issued to it in
the exchange offer. See "Plan of Distribution."
Record Date................... We mailed this prospectus and the related
exchange offer documents to registered holders
of outstanding notes on , 2001.
Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time, , 2001, unless
we decide to extend the expiration date.
Conditions to the Exchange
Offer......................... The exchange offer is not subject to any
condition other than that the exchange offer
not violate applicable law or any applicable
interpretation of the Staff of the SEC.
Procedures for Tendering
Outstanding Securities........ If the notes you own are held of record by Cede
& Co., as nominee of The Depositary Trust
Company, or "DTC", in book-entry form, you may
tender your outstanding notes in accordance
with DTC's Automated Tender Offer Program,
known as "ATOP". In so doing, you will be
agreeing to be bound by the terms of the letter
of transmittal. ATOP allows you to
electronically transmit your acceptance of the
exchange offer to DTC instead of physically
completing and delivering a letter of
transmittal to the exchange agent. As part of
the book-entry transfer, DTC will facilitate
the exchange of your notes and update your
account to reflect the issuance of the exchange
notes to you.
To tender your outstanding notes by a means
other than book-entry transfer, a letter of
transmittal must be completed and signed
according to the instructions contained in the
letter of transmittal. The letter of
transmittal and any other documents required by
the letter of transmittal must be delivered to
the exchange agent by mail, facsimile, hand
delivery or overnight carrier. In addition, you
must deliver the outstanding notes to the
exchange agent or comply with the procedures
for guaranteed delivery. See "The Exchange
Offer -- Procedures for Tendering Outstanding
Notes" for more information.
Do not send letters of transmittal and
certificates representing outstanding notes to
us. Send these documents only to the exchange
agent. See "The Exchange Offer -- Exchange
Agent" for more information.
Special Procedures for
Beneficial Owners............. If you are the beneficial owner of book-entry
interests and your name does not appear on a
security position listing of DTC as the holder
of the book-entry interests or if you are a
beneficial owner
4
12
of outstanding notes that are registered in the
name of a broker, dealer, commercial bank,
trust company or other nominee and you wish to
tender the book-entry interests or outstanding
notes in the exchange offer, you should contact
the person in whose name your book-entry
interests or outstanding notes are registered
promptly and instruct that person to tender on
your behalf.
Withdrawal Rights............. You may withdraw the tender of your outstanding
notes at any time prior to 5:00 p.m., New York
City time on , 2001.
Federal Income Tax
Considerations................ Based on the advice of counsel, the exchange of
outstanding notes will not be a taxable event
for United States federal income tax purposes.
Use of Proceeds............... We will not receive any proceeds from the
issuance of exchange notes pursuant to the
exchange offer. We will pay all of our expenses
incident to the exchange offer.
Exchange Agent................ U.S. Bank Trust National Association is serving
as the principal exchange agent in connection
with the exchange offer. Kredietbank S.A.
Luxembourgeoise Societe Anonyme is serving as
Luxembourg exchange agent in connection with
the exchange offer.
5
13
SUMMARY OF TERMS OF THE EXCHANGE NOTES
The form and terms of the exchange notes are the same as the form and terms
of the outstanding series B notes. The form and terms of the exchange notes are
also the same as the form and terms of the outstanding series C notes, except
that the exchange notes will be registered under the Securities Act. As a
result, unlike the outstanding series C notes, the exchange notes will not bear
legends restricting their transfer and will not contain the registration rights
and liquidated damage provisions contained in the outstanding series C notes.
The exchange notes will represent the same debt as the outstanding notes. The
exchange notes will be governed by the indenture under which the series C notes
were issued. We use the term notes in this prospectus to refer collectively to
the outstanding notes and the exchange notes.
Issuer........................ Dura Operating Corp., a Delaware corporation.
Securities.................... $458.5 million in principal amount of Series D
9% Senior Subordinated Notes due 2009.
Maturity...................... May 1, 2009.
Interest...................... Annual rate: 9%.
Payment frequency: every six months on May 1
and November 1.
First payment: November 1, 2001.
Ranking....................... The exchange notes will be senior subordinated
debt of the issuer. Accordingly, they will
rank:
- behind all of the senior debt of the issuer;
- equally with all existing and future
subordinated, unsecured debt of the issuer
that does not expressly provide that it is
subordinated to the exchange notes;
- ahead of all future debt of the issuer that
expressly provides that it is subordinated to
the exchange notes; and
- behind all of the liabilities (including
trade payables) of the issuer's non-guarantor
subsidiaries.
As of March 31, 2001, after giving effect to
the offering of the outstanding series C notes
and the application of the net proceeds of that
offering, the exchange notes would have been
subordinated to approximately $627.7 million of
senior debt of the issuer and would have been
effectively subordinated to approximately
$950.2 million of liabilities of the issuer's
non-guarantor subsidiaries.
Guarantees.................... The exchange notes will be unconditionally
guaranteed on a senior subordinated basis by
Parent and by each material existing and future
domestic subsidiary of the issuer.
As of March 31, 2001, after giving effect to
the offering of the outstanding series C notes
and the application of the net proceeds of that
offering, the guarantees would have been
subordinated to approximately $627.7 million of
senior debt of Parent and the subsidiary
guarantors as a result of their respective
guarantees of our existing senior credit
facility.
Optional Redemption........... On or after May 1, 2004, the issuer may redeem
some or all of the exchange notes at any time
at the redemption prices described in the
section "Description of Notes" under the
heading "Optional Redemption."
6
14
Prior to May 1, 2002, the issuer may redeem up
to 35% of the notes with the proceeds of
certain public offerings of the common equity
of Parent at the price listed in the section
"Description of Notes" under the heading
"Optional Redemption."
Mandatory Offer to
Repurchase.................... If the issuer sells certain assets or if the
issuer or Parent experience specific kinds of
changes in control, the issuer must offer to
repurchase the exchange notes at the prices
listed in the section "Description of Notes."
Basic Covenants of
Indenture..................... The issuer issued the outstanding series C
notes, and will issue the exchange notes, under
an indenture, dated June 22, 2001, with U.S.
Bank Trust National Association, as trustee.
The outstanding series B notes were issued
under a prior indenture with the trustee, dated
April 22, 1999, which is the same in all
material respects as the indenture under which
the exchange notes will be issued. The
indenture, among other things, restricts the
ability of the issuer and its restricted
subsidiaries to:
- borrow money;
- pay dividends on stock or repurchase stock;
- make investments;
- use assets as security in other transactions;
and
- sell certain assets or merge with or into
other companies.
The covenants are subject to certain
significant exceptions. See "Description of
Notes -- Certain Covenants."
YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION OF
CERTAIN RISKS OF PARTICIPATING IN THE EXCHANGE OFFER.
7
15
RISK FACTORS
You should read and consider carefully each of the following factors, as
well as the other information contained in or incorporated by reference into
this prospectus, before making a decision to participate in the exchange offer.
RISKS RELATING TO THE EXCHANGE OFFER
BECAUSE THERE IS NO PUBLIC MARKET FOR THE NOTES, YOU MAY NOT BE ABLE TO SELL
YOUR NOTES
The exchange notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:
- the liquidity of any trading market that may develop;
- the ability of holders to sell their exchange notes; or
- the price at which the holders would be able to sell their exchange
notes.
If a trading market were to develop, the exchange notes might trade at higher or
lower prices than their principal amount or purchase price, depending on many
factors, including prevailing interest rates, the market for similar securities
and our financial performance.
We do not intend to list the notes on any trading exchange or to do
anything to facilitate the development of a trading market for the notes. We
understand that the initial purchasers presently intend to make a market in the
notes. However, they are not obligated to do so, and any market-making activity
with respect to the notes may be discontinued at any time without notice. In
addition, any market-making activity will be subject to the limits imposed by
the Securities Act and the Securities Exchange Act, and may be limited during
the exchange offer or the pendency of an applicable shelf registration
statement.
In addition, any outstanding note holder who tenders in the exchange offer
for the purpose of participating in a distribution of the exchange notes may be
deemed to have received restricted securities, and if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
YOUR OUTSTANDING NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW
THE EXCHANGE OFFER PROCEDURES
We will issue exchange notes pursuant to this exchange offer only after a
timely receipt of your outstanding notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your outstanding notes, please allow sufficient time to ensure timely
delivery. If we do not receive your outstanding notes, letter of transmittal and
other required documents by the expiration date of the exchange offer, we will
not accept your outstanding notes for exchange. We are under no duty to give
notification of defects or irregularities with respect to the tenders of
outstanding notes for exchange. If there are defects or irregularities with
respect to your tender of outstanding notes, we will not accept your outstanding
notes for exchange.
IF YOU DO NOT EXCHANGE YOUR OUTSTANDING SERIES C NOTES, YOUR OUTSTANDING SERIES
C NOTES WILL CONTINUE TO BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND
YOU MAY BE UNABLE TO SELL YOUR OUTSTANDING SERIES C NOTES
We did not register the outstanding series C notes, nor do we intend to do
so following the exchange offer. Outstanding series C notes that are not
tendered will therefore continue to be subject to the existing transfer
restrictions and may be transferred only in limited circumstances under the
securities laws. If you do not exchange your outstanding series C notes, you
will lose your right to have your outstanding series C notes registered under
the federal securities laws. As a result, if you hold outstanding series C notes
after the exchange offer, you may be unable to sell your outstanding series C
notes.
8
16
THE EXCHANGE OFFER WILL REDUCE THE NUMBER OF OUTSTANDING SERIES B NOTES TRADED
IN THE MARKET, WHICH MAY REDUCE THE LIQUIDITY AND MARKET VALUE OF YOUR
OUTSTANDING SERIES B NOTES
Any exchange of outstanding series B notes pursuant to the exchange offer
will reduce the number of outstanding series B notes that would otherwise trade
in the market. Depending on the number of outstanding series B notes exchanged,
this could reduce the liquidity and market value of any outstanding series B
notes that remain outstanding after the exchange offer.
YOUR INDIVIDUAL VOTING INTEREST AS A NOTE HOLDER UNDER THE INDENTURE MAY BE
DILUTED FOLLOWING THE EXCHANGE OFFER
In the event all of our outstanding series B notes and all of our
outstanding series C notes are exchanged for exchange notes, there would be
$458.5 million in aggregate principal amount of exchange notes outstanding. The
exchange notes will be governed by the indenture that currently governs our
outstanding series C notes. Following the exchange offer, any action under this
indenture requiring the consent of a majority of the note holders will require
the consent of the majority of all holders of exchange notes, as well as the
holders of any of our outstanding series C notes that are not exchanged in the
exchange offer. As a holder of outstanding notes, your individual voting
interest may therefore be diluted following the exchange offer.
RISKS RELATED TO THE NOTES
OUR BUSINESS MAY BE ADVERSELY IMPACTED AS A RESULT OF OUR SUBSTANTIAL LEVERAGE
We have a significant amount of indebtedness. As of March 31, 2001, after
giving effect to the offering of our outstanding series C notes and the
application of the net proceeds of that offering, we would have had
approximately $1,174.5 million of outstanding debt, $55.3 million of outstanding
Trust Preferred Securities and approximately $442.1 million of stockholders'
investment. Our ratio of earnings to fixed charges for the twelve months ended
March 31, 2001 was 1.4 to 1.0. In addition, both the issuer and Parent are able
to incur substantial additional indebtedness in the future. The terms of the
indenture do not fully prohibit them from doing so. Our existing senior credit
facility provides for revolving credit borrowings of up to $400 million, subject
to certain financial covenants.
Our indebtedness could have several important consequences to you,
including but not limited to the following:
- it may be difficult for the issuer to satisfy its obligations with
respect to the notes;
- our ability to obtain additional financing in the future for working
capital, capital expenditures, potential acquisition opportunities,
general corporate purposes or other purposes may be impaired;
- a substantial portion of our cash flow from operations must be dedicated
to the payment of principal and interest on our indebtedness;
- we may be more vulnerable to economic downturns, may be limited in our
ability to withstand competitive pressures and may have reduced
flexibility in responding to changing business, regulatory and economic
conditions; and
- fluctuations in market interest rates will affect the cost of our
borrowings to the extent not covered by interest rate hedge agreements
because a portion of our indebtedness is payable at variable rates.
Our ability to service our indebtedness will depend on our future
performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors. Certain of these factors are
beyond our control. We believe that, based upon current levels of operations, we
will be able to meet our debt service obligations when due. Significant
assumptions underly this belief, including, among other things, that we will
continue to be successful in implementing our business strategy and that there
will be no material adverse developments in our business, liquidity or capital
requirements. If we cannot generate sufficient cash flow from operations to
service our indebtedness and to meet our other obligations and
9
17
commitments, we might be required to refinance our debt or to dispose of assets
to obtain funds for such purpose. There is no assurance that refinancings or
asset dispositions could be effected on a timely basis or on satisfactory terms,
if at all, or would be permitted by the terms of the indenture or the existing
senior credit facility. In the event that we are unable to refinance the
existing senior credit facility or raise funds through asset sales, sales of
equity or otherwise, the issuer's ability to pay principal of, and interest on,
the notes would be impaired.
WE ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS AND COVENANTS UNDER OUR FINANCING
ARRANGEMENTS
The indentures governing the notes and our existing senior credit facility
contain numerous restrictive covenants, including, but not limited to, covenants
that restrict the issuer's ability to incur indebtedness, pay dividends, create
liens, sell assets and engage in certain mergers and acquisitions. In addition,
the existing senior credit facility also requires us to maintain certain
financial ratios. Our ability to comply with the covenants and other terms of
the existing senior credit facility and the indentures and to satisfy our other
respective debt obligations (including, without limitation, borrowings and other
obligations under the existing senior credit facility) and the issuer's ability
to make cash payments with respect to the notes will depend on our future
operating performance. In the event that we fail to comply with the various
covenants contained in the existing senior credit facility and the indentures
governing the notes, as applicable, we would be in default thereunder, and in
any such case, the maturity of substantially all of our long-term indebtedness
could be accelerated.
A default under the indentures governing the notes would also constitute an
event of default under our existing senior credit facility. In the event of a
default under our existing senior credit facility, the lenders under the
existing senior credit facility could elect to declare all amounts borrowed
under that facility, together with accrued interest, to be due and payable. If
we were unable to repay those borrowings, these lenders could proceed against
the assets of the issuer, which secure its borrowings under the existing senior
credit facility. If the indebtedness under the existing senior credit facility
were to be accelerated, the assets of the issuer might not be sufficient to
repay that indebtedness and the notes in full. The existing senior credit
facility prohibits the repayment, purchase, redemption, defeasance or other
payment of any of the principal of the notes at any time prior to their stated
maturity other than as described herein. See "Description of Notes."
THE NOTES AND GUARANTEES ARE UNSECURED SENIOR SUBORDINATED OBLIGATIONS
The indebtedness evidenced by the notes is an unsecured obligation of the
issuer and the indebtedness evidenced by the parent guaranty and the subsidiary
guarantees are unsecured obligations of Parent and the subsidiary guarantors, as
the case may be. The payment of principal of, premium (if any), and interest on
the notes is subordinated in right of payment to all senior indebtedness of the
issuer, including the payment of the existing senior credit facility, and the
payment of the parent guaranty and the subsidiary guarantees are subordinated in
right of payment to all senior indebtedness of Parent and the subsidiary
guarantors, as the case may be, including Parent's and the subsidiary
guarantors' respective guarantees of the existing senior credit facility. As of
March 31, 2001, after giving effect to the offering and the application of the
net proceeds of the offering, senior indebtedness of the issuer would have been
approximately $627.7 million and, as a result of their respective guarantees of
the existing senior credit facility, senior indebtedness of Parent and the
subsidiary guarantors would have been approximately $627.7 million.
By reason of the subordination provisions of the indenture(s) governing the
notes, in the event of insolvency, liquidation, reorganization, dissolution or
other winding-up of the issuer, Parent or any of the subsidiary guarantors,
holders of senior indebtedness of the issuer, Parent or any of the subsidiary
guarantors, as the case may be, will have to be paid in full before the Issuer
makes payments in respect of the notes, before Parent makes payments in respect
of the parent guaranty or any of the subsidiary guarantors makes payment in
respect of the subsidiary guarantees. In addition, no payment will be able to be
made in respect of the notes during the continuance of a payment default under
any "designated senior indebtedness" (as defined in the indentures). Therefore,
if certain non-payment defaults exist with respect to designated senior
10
18
indebtedness, the holders of such designated senior indebtedness will be able to
prevent payments on the notes for certain periods of time. See "Description of
Notes -- Subordination."
PARENT'S SOLE SOURCE OF OPERATING INCOME IS DERIVED FROM THE ISSUER; YOU SHOULD
NOT RELY ON THE PARENT GUARANTY IN EVALUATING AN INVESTMENT IN THE NOTES
Parent has unconditionally guaranteed the notes on an unsecured, senior
subordinated basis. Parent is a holding company whose sole source of operating
income and cash flow is derived from the issuer and whose only material asset is
the issuer's capital stock. Accordingly, Parent is dependent upon the earnings
and cash flow of, and dividends and distributions from, the issuer to perform on
the parent guaranty. As a result, the parent guaranty provides little, if any,
additional credit support for the notes and investors should not rely on the
parent guaranty in evaluating whether to invest in the notes.
THE ISSUER CONDUCTS CERTAIN OF ITS OPERATIONS THROUGH SUBSIDIARIES AND NOT ALL
OF THE ISSUER'S SUBSIDIARIES ARE SUBSIDIARY GUARANTORS
The issuer conducts some of its domestic and substantially all of its
international operations through subsidiaries. Distributions and intercompany
transfers from the issuer's subsidiaries to the issuer may be restricted by
covenants contained in debt agreements and other agreements to which these
subsidiaries may be subject and may be restricted by other agreements entered
into in the future and by applicable law. There can be no assurance that the
operating results of the issuer's subsidiaries at any given time will be
sufficient to make distributions to the issuer. In addition, the issuer does not
own all of the equity interests of certain of its foreign subsidiaries, and
consequently must share profits with certain minority shareholders.
The subsidiary guarantors will include only the issuer's material domestic
subsidiaries. As a result, the notes will be effectively subordinated to all
existing and future liabilities (including trade payables) of our non-guarantor
subsidiaries. As a result, any right of the issuer to participate in any
distribution of assets of its non-guarantor subsidiaries upon the liquidation,
reorganization or insolvency of any such subsidiary (and the consequential right
of the holders of the notes to participate in the distribution of those assets)
will be subject to the prior claims of such subsidiary's creditors. As of March
31, 2001, after giving effect to the offering of the outstanding series C notes
and the application of the net proceeds of that offering, the notes would have
been effectively subordinated to approximately $950.2 million of liabilities of
the issuer's non-guarantor subsidiaries. For condensed consolidated guarantor
and non-guarantor financial information, see note 15 to our 2000 consolidated
financial statements and note 10 to our first quarter 2001 consolidated
financial statements, each incorporated by reference in this prospectus.
THE INTERNAL REVENUE SERVICE MAY ASSERT THAT THE OUTSTANDING SERIES C NOTES
WERE ISSUED WITH ORIGINAL ISSUE DISCOUNT, WHICH COULD AFFECT THE VALUE OF THE
EXCHANGE NOTES RECEIVED IN EXCHANGE FOR BOTH THE OUTSTANDING SERIES C NOTES AND
THE OUTSTANDING SERIES B NOTES.
We intend to take the position that the outstanding series C notes were not
issued with original issue discount for federal income tax purposes and
therefore that any exchange notes received in exchange for outstanding series C
notes also will not have original issue discount. We cannot assure you, however,
that the Internal Revenue Service, or "IRS", will not assert a contrary
position. Each initial purchaser of the outstanding series C notes received a
delayed draw special payment of 3.635% of the principal amount of such notes.
The IRS may take a position that the issue price of the outstanding series C
notes equaled the offering price reduced by the delayed draw special payment and
the actual 1.75% issue discount (which actual discount would, standing alone,
qualify for the de minimis exception), and, accordingly, the outstanding series
C notes were issued with original issue discount. If the IRS were to take this
position, the holders of the outstanding series C notes and any exchange notes
received in exchange for the outstanding series C notes would be required to
include the amount of original issue discount in gross income over the term of
the notes based on a constant yield method. This means that the holders would be
required to include amounts in gross income without a corresponding receipt of
cash and that such notes would not be fungible for federal income tax purposes
with our outstanding series B notes even after the exchange offer. In addition,
a subsequent purchaser of an exchange note from a holder that participates in
the exchange (or any further
11
19
subsequent purchaser) would likely not be able to determine whether the
purchased exchange note has original issue discount (since there is not likely
to be any way to "trace" the exchange note to a particular outstanding note),
which could adversely affect the value of the notes received in exchange for
outstanding series B notes as well as for outstanding series C notes. We have
not obtained any ruling from the IRS or any opinion of counsel on this matter.
You are strongly urged to consult your own advisors regarding the determination
of the original issue price of the outstanding series C notes and the federal,
state, and foreign tax consequences of holding or disposing of a debt security
issued with original issue discount.
THERE IS NO ASSURANCE THAT THE ISSUER WILL BE ABLE TO PURCHASE THE NOTES UPON A
CHANGE OF CONTROL
If either the issuer or Parent undergoes a "change of control" (as defined
in the indentures), we may need to refinance large amounts of our debt,
including the debt under the notes and the existing senior credit facility. If a
change of control occurs, we must offer to buy back the notes for a price equal
to 101% of the notes' principal amount, plus any interest which has accrued and
remains unpaid as of the repurchase date. We would fund any repurchase
obligation with our available cash, cash generated from other sources such as
borrowings, sales of equity, or funds provided by a new controlling person.
However, we cannot assure you that there will be sufficient funds available for
any required repurchases of the notes if a change of control occurs. In
addition, the existing senior credit facility prohibits us from repurchasing the
notes after a change of control until we first repay our debt to the existing
senior credit facility in full. If we fail to repurchase the notes in that
circumstance, we will go into default under both the notes and the existing
senior credit facility. Any future debt which we incur may also contain
restrictions on repayment which come into effect upon a change of control. If a
change of control occurs, we cannot assure you that we will have sufficient
funds to satisfy all of our debt obligations. These buyback requirements may
also delay or make it harder for others to obtain control of Dura. In addition,
certain important corporate events, such as leveraged recapitalizations, that
would increase the level of our indebtedness, would not constitute a change of
control under the indenture. See "Description of Notes -- Repurchase at the
Option of Holders -- Change of Control."
IF A COURT WERE TO FIND THAT THE ISSUANCE OF THE SUBSIDIARY GUARANTEES
CONSTITUTED A FRAUDULENT CONVEYANCE, THAT COURT COULD AVOID THE SUBSIDIARY
GUARANTORS' OBLIGATIONS UNDER THE SUBSIDIARY GUARANTEES
Although standards may vary depending on the applicable law, generally
under federal bankruptcy law and comparable provisions of state fraudulent
transfer laws, if a court were to find that, among other things, at the time any
subsidiary guarantor incurred the debt evidenced by the guarantee of the notes,
such subsidiary guarantor:
- intended to hinder, delay or defraud any present or future creditor or
received less than reasonably equivalent value or fair consideration for
the incurrence of such debt; and
- the guarantor:
- was insolvent or rendered insolvent by reason of such incurrence; or
- was engaged in a business or transaction for which its remaining assets
constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by a subsidiary guarantor could be voided and required
to be returned to the subsidiary guarantor or to a fund for the benefit of the
creditors of the subsidiary guarantor.
12
20
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a debtor would be
considered insolvent if:
- the sum of its debts, including allowance for contingent liabilities,
were greater than the fair saleable value of all of its assets; or
- if the present fair saleable value of its assets were less than the
amount that would be required to pay the probable liability on its
existing debts, including allowance for contingent liabilities, as they
become absolute and mature; or
- it could not pay its debts as they became due.
RISKS RELATING TO DURA AND THE AUTOMOTIVE SUPPLY INDUSTRY
WE ARE DEPENDENT ON FORD, GM, DAIMLERCHRYSLER AND LEAR CORPORATION AS OUR
LARGEST CUSTOMERS
Our revenues from Ford, GM, DaimlerChrysler and Lear Corporation
represented approximately 26%, 13%, 10% and 10%, respectively, of our revenues
in 2000. The loss of Ford, GM, DaimlerChrysler, Lear Corporation or any other
significant customer could have a material adverse effect on us. The contracts
we have entered into with many of our customers provide for supplying the
customers' requirements for a particular model, rather than for manufacturing a
specific quantity of products. Such contracts range from one year to the life of
the model, usually three to seven years, and do not require the purchase by the
customer of any minimum number of parts. Therefore, the loss of any one of such
customers or a significant decrease in demand for certain key models or group of
related models sold by any of our major customers could have a material adverse
effect on us. We are involved in claims relating to our products with certain of
our significant customers. As a result of these claims, it is possible that our
relationship with these customers could be adversely affected.
CYCLICALITY AND SEASONALITY COULD ADVERSELY AFFECT US
The automotive and recreational vehicle markets are highly cyclical and
both markets are dependent on consumer spending. Economic factors adversely
affecting automotive production and consumer spending could adversely impact us.
The current weakness in the North American automotive and recreational vehicle
markets has adversely affected our recent operating results. Recent production
cuts announced by GM, Ford and DaimlerChrysler have adversely affected us. As a
result, we expect to report lower operating results for the second quarter of
2001 as compared to the second quarter of 2000. In addition, our business is
somewhat seasonal. We typically experience decreased revenues and operating
income during the third calendar quarter of each year due to the impact of
scheduled OEM plant shutdowns in July and August for vacations and new model
changeovers.
WE MAY BE UNABLE TO COMPLETE ADDITIONAL STRATEGIC ACQUISITIONS AND ALLIANCES
The automotive component supply industry has undergone, and is likely to
continue to experience, consolidation as OEMs seek to reduce costs and reduce
their supplier base. In the near term, we intend to focus our efforts on making
acquisitions and establishing strategic alliances that do not significantly
increase our leverage position. There can be no assurance that we will find
attractive acquisition candidates or successfully integrate acquired businesses
into our existing business. If the expected synergies from such acquisitions do
not materialize or we fail to successfully integrate new businesses into our
existing businesses, our results of operations could be adversely affected. To
the extent that we may be considered as an acquisition candidate by a third
party, certain provisions in our restated certificate of incorporation and our
amended and restated by-laws may inhibit a change in control.
13
21
WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS
We have significant operations in Europe, Canada and Latin America. Certain
risks are inherent in international operations, including:
- the difficulty of enforcing agreements and collecting receivables through
certain foreign legal systems;
- foreign customers may have longer payment cycles than customers in the
United States;
- tax rates in certain foreign countries may exceed those in the United
States and foreign earnings may be subject to withholding requirements or
the imposition of tariffs, exchange controls or other restrictions;
- general economic and political conditions in countries where we operate
may have an adverse effect on our operations in those countries;
- the difficulties associated with managing a large organization spread
throughout various countries; and
- required compliance with a variety of foreign laws and regulations.
As we continue to expand our business globally, our success will be
dependent, in part, on our ability to anticipate and effectively manage these
and other risks. We cannot assure you that these and other factors will not have
a material adverse effect on our international operations or our business as a
whole. In addition, we generate a significant portion of our revenues and incur
a significant portion of our expenses in currencies other than U.S. dollars. To
the extent that we are unable to match revenues received in foreign currencies
with costs paid in the same currency, exchange rate fluctuations in any such
currency could have an adverse effect on our financial results. The weakening of
the European currencies in relation to the U.S. dollar had a negative impact on
our revenues in 2000 and the first quarter of 2001.
WE MAY BE ADVERSELY IMPACTED BY WORK STOPPAGES AND OTHER LABOR MATTERS
As of March 31, 2001, approximately 53% of our employees were unionized. We
cannot assure you that we will not encounter strikes, further unionization
efforts or other types of conflicts with labor unions or our employees. Any of
these factors may have an adverse effect on us or may limit our flexibility in
dealing with our workforce.
In addition, many OEMs and their suppliers have unionized work forces. Work
stoppages or slow-downs experienced by OEMs or their suppliers could result in
slow-downs or closures of assembly plants where our products are included in
assembled vehicles. In the event that one or more of our customers experiences a
material work stoppage, such work stoppage could have a material adverse effect
on our business.
WE MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL AND SAFETY REGULATIONS TO WHICH
WE ARE SUBJECT
We are subject to the requirements of federal, state, local and foreign
environmental and occupational health and safety laws and regulations. We cannot
assure you that we operate at all times in complete compliance with all such
requirements. We could be subject to potentially significant fines and penalties
for any noncompliance that may occur. We have made and will continue to make
capital and other expenditures to comply with environmental requirements. We are
also subject to laws requiring the cleanup of contamination. Some of our
operations generate hazardous substances. If a release of hazardous substances
occurs at or from any of our current or former properties or at a landfill or
another location where we have disposed of wastes, we may be held liable for the
contamination, and the amount of such liability could be material. We are
currently addressing environmental contamination matters at certain facilities,
including facilities in Mancelona, Michigan, Butler, Indiana, and Rotenberg,
Einbeck and Dusseldorf, Germany, which could result in material expenditures.
CERTAIN STOCKHOLDERS CURRENTLY CONTROL ALL MATTERS SUBMITTED TO A STOCKHOLDER
VOTE
Onex Corporation, Alkin Co. and certain other stockholders associated with
Dura or Hidden Creek beneficially own all of our outstanding shares of Class B
common stock, representing approximately 69% of
14
22
the combined voting power of our outstanding common stock as of May 31, 2001.
Each share of Class B common stock has ten votes, as compared to one vote for
each share of Class A common stock. As a result of such stock ownership, these
stockholders are able to control the vote on all matters submitted to a vote of
the holders of our common stock, including the election of directors, amendments
to our restated certificate of incorporation and by-laws and approval of
significant corporate mergers. Such consolidation of voting power could also
have the effect of delaying, deterring or preventing a change in control of Dura
that might be otherwise beneficial to you as a debtholder.
WE MAY BE ADVERSELY AFFECTED BY PRODUCT LIABILITY CLAIMS
We face an inherent business risk of exposure to product liability claims
in the event that the failure of our products results, or is alleged to result,
in property damage, bodily injury and/or death. We cannot assure you that we
will not experience any material product liability losses in the future or that
we will not incur significant costs to defend these claims. In addition, if any
Dura-designed products are or are alleged to be defective, we may be required to
participate in a recall involving those products. Each OEM has its own policy
regarding product recalls and other product liability actions relating to its
suppliers. However, as suppliers become more integrally involved in the vehicle
design process and assume more vehicle assembly functions, OEMs are increasingly
looking to their suppliers for contribution when faced with product recalls,
product liability or warranty claims. We cannot assure you that the future costs
associated with providing product warranties will not be material. A successful
product liability claim brought against us in excess of available insurance
coverage or a requirement to participate in any product recall may have a
material adverse effect on our results of operations or financial condition.
In late 1994, Ford issued a recall of a series of manual-transmission Ford
vehicles, including F-Series pickups, Broncos, Rangers and Explorers, to repair
the self-adjust parking brakes originally manufactured by the brake and cable
business of Alkin Co. The types of alleged failures that prompted the F-Series
recall have also led to a number of claims and lawsuits filed against Ford. Ford
has maintained that Dura or Alkin Co. is responsible for all damages or
liabilities incurred by Ford as a result of these claims and lawsuits. One
lawsuit filed against Ford and Alkin Co. resulted in a July 1998 award of
punitive damages against Ford of more than $151 million (which has subsequently
been reduced to $69 million). Ford is appealing this decision. If Ford is
unsuccessful on appeal, Ford may seek contribution from Dura for all or part of
any final judgment against it. We are not presently aware of any other open
self-adjust parking brake claims against Ford with respect to which Ford may
elect to seek contribution from Dura. The agreement relating to the acquisition
of Alkin's brake and cable business provides that we are liable for claims
arising out of accidents that take place on or after August 31, 1994 and that we
will be liable for other claims only to the extent any losses by Alkin relating
to such claims are not paid by Alkin's insurance policies (either because they
are not over the deductible amount, because Alkin's policy limits have been
exceeded or because they are not covered by Alkin's insurance policies for other
reasons). We maintain insurance against product liability claims, but there can
be no assurance that such coverage will be adequate for liabilities ultimately
incurred or that it will continue to be available on terms acceptable to us. In
November 1996, one of our insurance carriers brought a declaratory judgment that
the umbrella and excess liability policies that it had issued to Onex did not
provide coverage for an allegedly defective parking brake manufactured prior to
August 31, 1994.
In March 1999, we were notified by Ford of its decision to institute a
recall of certain of its vehicles, including Explorers, Mountaineers, Rangers,
Mustangs and F-Series pickups, relating to the speed control cable. Ford has
reported that certain of such vehicles could be equipped with a speed control
cable that could interfere with the speed control pulley and thus result in a
"stuck" throttle. In June 1999, Ford notified us that as many as 987,839
vehicles could be affected at an alleged cost of up to $60 per vehicle. In
October 1999, Ford announced that it was voluntarily recalling all 1998-1999
Ford Explorers and Mountaineers (approximately 972,000 vehicles) to replace the
auxiliary hood latches. Ford contends that we failed to provide adequate
corrosion protection, thereby allowing the secondary latch to remain open, which
may potentially lead to hoods flying open. Ford projects that the recall will
cost Ford approximately $23 million. Although we deny full liability related to
the speed control and secondary hood latch recalls, in June 2000, we settled the
two product recall matters through a cost sharing agreement with Ford. We agreed
15
23
to pay $40 million ($20 million in July 2000, followed by three equal payments
totaling $20 million in July 2001, July 2002 and July 2003) to resolve Ford's
claims relating to these recalls.
WE OPERATE IN THE HIGHLY COMPETITIVE AUTOMOTIVE SUPPLY INDUSTRY
The automotive component supply industry is highly competitive. Some of our
competitors are companies, or divisions or subsidiaries of companies, that are
larger and have greater financial and other resources than we do. In addition,
with respect to certain of our products, some of our competitors are divisions
of our OEM customers. There can be no assurance that our products will be able
to compete successfully with the products of these other companies.
We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models by our major
customers. New model development generally begins two to five years prior to the
marketing of such models to the public. The failure to obtain new business on
new models or to retain or increase business on redesigned existing models could
adversely affect our business.
In addition, there is substantial and continuing pressure from the major
OEMs to reduce costs, including the cost of products purchased from outside
suppliers such as Dura. If we are unable to generate sufficient production cost
savings in the future to offset price reductions, our gross margin could be
adversely affected.
TECHNOLOGICAL AND REGULATORY CHANGES MAY ADVERSELY AFFECT US
Changes in legislative, regulatory or industry requirements or competitive
technologies may render certain of our products obsolete. Our ability to
anticipate changes in technology and regulatory standards and to develop and
introduce new and enhanced products successfully on a timely basis will be a
significant factor in our ability to grow and to remain competitive. We cannot
assure you that we will be able to achieve the technological advances that may
be necessary for us to remain competitive or that certain of our products will
not become obsolete. We are also subject to the risks generally associated with
new product introductions and applications, including lack of market acceptance,
delays in product development and failure of products to operate properly.
USE OF PROCEEDS
This exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any cash proceeds from
the issuance of the exchange notes. In consideration for issuing the exchange
notes contemplated in this prospectus, we will receive outstanding notes in like
principal amount, the form and terms of which are the same as the form and terms
of the exchange notes, except as otherwise described in this prospectus.
We used all of the approximately $147.1 million of net proceeds from the
sale of the outstanding series C notes to reduce the borrowings outstanding
under the revolving credit facility of our existing senior credit facility.
16
24
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
Simultaneously with the sale of the outstanding series C notes, we entered
into a registration rights agreement with the initial purchasers of the
outstanding series C notes. Under this registration rights agreement, we agreed
to file a registration statement that, when effective, would enable the holders
of the outstanding notes to exchange the outstanding notes for registered notes
with terms identical in all material respects. We also agreed to use our
reasonable best efforts to cause that registration statement to become effective
with the SEC within 150 days of the issuance of the outstanding series C notes.
A copy of the registration rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part.
We are conducting the exchange offer to satisfy our contractual obligations
under the registration rights agreement. The form and terms of the exchange
notes are the same as the form and terms of the outstanding series B notes. The
form and terms of the exchange notes are also the same as the form and terms of
the outstanding series C notes, except that the registered securities will be
registered under the Securities Act, and holders of the exchange notes will not
be entitled to the payment of any additional amounts pursuant to the terms of
the registration rights agreement, as described below.
The registration rights agreement provides that, promptly after the
registration statement has been declared effective, we will offer to holders of
outstanding notes the opportunity to exchange their outstanding notes for
exchange notes having a principal amount, interest rate, maturity date and other
terms substantially identical to the principal amount, interest rate, maturity
date and other terms of their outstanding notes. We will keep the exchange offer
open for at least 20 business days (or longer if we are required to by
applicable law) after the date notice of the exchange offer is mailed to the
holders of securities and use our reasonable best efforts to complete the
exchange offer no later than 30 days after the effective date of the
registration statement. The exchange notes will be accepted for clearance
through The Depository Trust Company ("DTC"), Clearstream, Luxembourg and the
Euroclear System with new CUSIP and ISIN numbers.
Based on existing interpretations of the Securities Act by the staff of the
SEC, we believe that the holders of the exchange notes (other than holders who
are broker-dealers) may freely offer, sell and transfer the exchange notes.
However, holders of outstanding notes who are affiliates of Dura, who intend to
participate in the exchange offer for the purpose of distributing the exchange
notes, or who are broker-dealers who purchased the notes from us for resale, may
not freely offer, sell or transfer the exchange notes, may not participate in
the exchange offer and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any offer, sale or
transfer of the exchange notes.
Each holder of outstanding notes who is eligible to and wishes to
participate in the exchange offer will be required to represent that it is not
an affiliate of Dura, that it is not a broker-dealer tendering outstanding notes
directly acquired from us for its own account and that it acquired the
outstanding notes and will acquire the exchange notes in the ordinary course of
its business and that it has no arrangement with any person to participate in
the distribution of the exchange notes. In addition, any broker-dealer who
acquired the outstanding notes for its own account as a result of market-making
or other trading activities must deliver a prospectus (which may be the
prospectus contained in the registration statement if the broker-dealer is not
reselling an unsold allotment of outstanding notes) meeting the requirements of
the Securities Act in connection with any resales of the exchange notes. We will
agree to allow such broker-dealers and the initial purchasers, if subject to
similar prospectus delivery requirements, to use the prospectus contained in the
registration statement or a similar prospectus in connection with the resale of
exchange notes for a period of 180 days from the issuance of the exchange notes.
We will promptly notify the holders of outstanding series C notes if we are
not permitted to conduct the exchange offer because of a change in SEC rules,
the exchange offer is not completed within 180 days of the issuance of the
outstanding series C notes or the exchange notes issued in the exchange offer in
exchange for outstanding series C notes are not freely tradeable (other than
because the holder is an affiliate of Dura or is a person that must deliver a
prospectus in connection with the resale). In any of these cases, we will file a
shelf registration covering resales of such affected outstanding series C notes
(or the affected exchange notes
17
25
issued in exchange for outstanding series C notes) on or prior to the later of
the 60th day after the issuance of the outstanding series C notes or the 30th
day after such filing obligation arises, use our reasonable best efforts to
cause the shelf registration statement to be declared effective on or prior to
the 90th day after such filing obligation arises and use our reasonable best
efforts to keep effective the shelf registration statement until the earlier of
two years from issuance of the outstanding series C notes or the time when all
of such securities have been sold thereunder. Holders of outstanding series B
notes, or exchange notes received in exchange for outstanding series B notes,
will not in any event be entitled to sell such securities pursuant to a shelf
registration statement.
In the event that a shelf registration statement is filed, we will provide
to each affected holder copies of the prospectus that is a part of the shelf
registration statement, notify each affected holder when the shelf registration
statement has become effective and take certain other actions as are required to
permit unrestricted resales of the affected securities. A holder that sells
notes pursuant to the shelf registration statement will be required to be named
as a selling security holder in the prospectus and to deliver a prospectus to
purchasers. A selling holder will also be subject to certain of the civil
liability provisions under the Securities Act in connection with sales and will
be bound by the provisions of the registration rights agreement that are
applicable to it, including certain indemnification rights and obligations.
If:
(1) we are permitted under SEC rules to conduct the exchange offer and
the exchange offer registration statement is not declared effective on or
prior to the 150th day following our issuance of the outstanding series C
notes; or
(2) the exchange offer is not consummated on or prior to the 180th day
following our issuance of the outstanding series C notes; or
(3) the shelf registration statement is not declared effective on or
prior to the required dates; or
(4) the shelf registration statement or the exchange offer
registration statement is declared effective but thereafter ceases to be
effective or useable in connection with resales during the period specified
in the registration agreement;
(any of such dates in clauses (1) through (4) being referred to a "registration
default"), additional amounts will accrue on the affected outstanding series C
notes (or the affected exchange notes issued in exchange for outstanding series
C notes) from and including the day immediately following the date of such
registration default until it is cured, in each case at a rate equal to 0.50%
per year. The additional amount payable will increase by an additional .50% over
the stated rate on such notes at the beginning of each subsequent 90-day period
until all registration defaults have been cured. However, the aggregate
additional amounts payable will in no event be more than 1.0% per year. Upon the
filing of the registration statement, the effectiveness of the exchange offer
registration statement, the consummation of the exchange offer or the
effectiveness of the shelf registration statement, as the case may be, the
additional amounts will cease to accrue from the date of filing, effectiveness
or consummation, as the case may be. If and for so long as the exchange notes
are listed on the Luxembourg Stock Exchange and the rules of such exchange so
require, the Luxembourg Stock Exchange will be notified in the case of any
increase in the rate of interest on the outstanding series C notes (or the
affected exchange notes issued in exchange for the outstanding series C notes),
and such notice will be published in a daily newspaper of general circulation in
Luxembourg (which is expected to the Luxembourg Wort). Holders of outstanding
series B notes, or exchange notes received in exchange for outstanding series B
notes, shall not in any event be entitled to receive any additional amounts.
Following the consummation of the exchange offer, holders of outstanding
series C notes who were eligible to participate in the exchange offer, but who
did not tender their outstanding notes, will not have any further registration
rights and the outstanding series C notes will continue to be subject to
restrictions on transfer. Accordingly, the liquidity of the market for the
outstanding series C notes could be adversely affected.
18
26
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all outstanding notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date of the exchange offer. We will issue $1,000 principal amount
of exchange notes in exchange for each $1,000 principal amount of outstanding
notes accepted in the exchange offer. Holders may tender some or all of their
outstanding notes pursuant to the exchange offer. However, outstanding notes may
be tendered only in integral multiples of $1,000.
The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes except that:
(1) the exchange notes bear a Series D designation and a different
CUSIP number from the outstanding series B notes and the outstanding series
C notes;
(2) unlike the outstanding series C notes, the exchange notes have
been registered under the Securities Act and will therefore not bear
legends restricting their transfer; and
(3) the holders of the exchange notes will be deemed to have agreed to
be bound by the provisions of the registration rights agreement and each
exchange note will bear a legend to that effect.
The exchange notes will evidence the same debt as the outstanding notes and will
be entitled to the benefits of the indenture.
As of the date of this prospectus, $300.0 million aggregate principal
amount of the outstanding series B notes were outstanding and $158.5 million
aggregate principal amount of the outstanding series C notes were outstanding.
We have fixed the close of business on , 2001 as the record date for
the exchange offer for purposes of determining the persons to whom this
prospectus and the letter of transmittal will be mailed initially.
Holders of outstanding notes do not have any appraisal or dissenters'
rights under the General Corporation Law of Delaware, or the indentures
governing the outstanding notes in connection with the exchange offer. We intend
to conduct the exchange offer in accordance with the applicable requirements of
the Exchange Act and the rules and regulations of the SEC.
We will be deemed to have accepted validly tendered outstanding notes when,
as and if we have given oral or written notice of our acceptance to the exchange
agent. The exchange agent will act as agent for the tendering holders for the
purpose of receiving the exchange notes from us.
If any tendered outstanding notes are not accepted for exchange because of
an invalid tender, the occurrence of specified other events set forth in this
prospectus or otherwise, the certificates for any unaccepted outstanding notes
will be returned, without expense, to the tendering holder as promptly as
practicable after the expiration date of the exchange offer.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" will mean 5:00 p.m., New York City time, on
, 2001, unless we, in our sole discretion, extend the exchange offer,
in which case the term "expiration date" will mean the latest date and time to
which the exchange offer is extended.
In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral or written notice and will mail to the registered holders
an announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.
19
27
We reserve the right, in our sole discretion, (1) to delay accepting any
outstanding notes, to extend the exchange offer or to terminate the exchange
offer if any of the conditions set forth below under "-- Conditions" have not
been satisfied, by giving oral or written notice of any delay, extension or
termination to the exchange agent or (2) to amend the terms of the exchange
offer in any manner. Any delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
to the registered holders.
INTEREST ON THE EXCHANGE NOTES
The exchange notes will bear interest from their date of issuance. Holders
of outstanding notes that are accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the date of issuance of the
exchange notes. Such interest will be paid with the first interest payment on
the exchange notes on November 1, 2001. Interest on the outstanding notes
accepted for exchange will cease to accrue upon issuance of the exchange notes.
Interest on the exchange notes is payable semi-annually on each May 1 and
November 1, commencing on November 1, 2001.
PROCEDURES FOR TENDERING
Only a holder of outstanding notes may tender outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must complete, sign
and date the letter of transmittal, or a facsimile of the letter of transmittal,
have the signatures on the letter of transmittal guaranteed if required by the
letter of transmittal or transmit an agent's message in connection with a
book-entry transfer, and mail or otherwise deliver the letter of transmittal or
the facsimile, together with the outstanding notes and any other required
documents, to the exchange agent prior to 5:00 p.m., New York City time, on the
expiration date. To be tendered effectively, the outstanding notes, letter of
transmittal or an agent's message and other required documents must be completed
and received by the exchange agent at the address set forth below under
"Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date.
Delivery of the outstanding notes may be made by book-entry transfer in
accordance with the procedures described below. Confirmation of the book-entry
transfer must be received by the exchange agent prior to the expiration date.
The term "agent's message" means a message, transmitted by a book-entry
transfer facility to, and received by, the exchange agent forming a part of a
confirmation of a book-entry, which states that the book-entry transfer facility
has received an express acknowledgment from the participant in the book-entry
transfer facility tendering the outstanding notes that the participant has
received and agrees: (1) to participate in ATOP; (2) to be bound by the terms of
the letter of transmittal; and (3) that we may enforce the agreement against the
participant.
By executing the letter of transmittal, each holder will make to us the
representations set forth above in the fifth paragraph under the heading
"-- Purpose of the Exchange Offer."
The tender by a holder and our acceptance thereof will constitute agreement
between the holder and us in accordance with the terms and subject to the
conditions set forth in this prospectus and in the letter of transmittal or
agent's message.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
OR AGENT'S MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT
THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD
BE SENT TO US. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.
20
28
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member of the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (the "Medallion System") unless the
outstanding notes tendered pursuant to the letter of transmittal are tendered
(1) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the letter of
transmittal or (2) for the account of a member firm of the Medallion System. In
the event that signatures on a letter of transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, the guarantee must be by a
member firm of the Medallion System.
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed in this prospectus, the
outstanding notes must be endorsed or accompanied by a properly completed bond
power, signed by the registered holder as the registered holder's name appears
on the outstanding notes with the signature thereon guaranteed by a member firm
of the Medallion System.
If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations or others acting in a fiduciary or representative
capacity, the person signing should so indicate when signing, and evidence
satisfactory to us of its authority to so act must be submitted with the letter
of transmittal.
We understand that the exchange agent will make a request promptly after
the date of this prospectus to establish accounts with respect to the
outstanding notes at DTC for the purpose of facilitating the exchange offer, and
subject to the establishment of this account, any financial institution that is
a participant in DTC's system may make book-entry delivery of outstanding notes
by causing DTC to transfer the outstanding notes into the exchange agent's
account with respect to the outstanding notes in accordance with DTC's
procedures for the transfer. Although delivery of the outstanding notes may be
effected through book-entry transfer into the exchange agent's account at DTC,
unless an agent's message is received by the exchange agent in compliance with
ATOP, an appropriate letter of transmittal properly completed and duly executed
with any required signature guarantee and all other required documents must in
each case be transmitted to and received or confirmed by the exchange agent at
its address set forth below on or prior to the expiration date, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under the procedures. Delivery of documents to DTC does not
constitute delivery to the exchange agent.
All questions as to the validity, form, eligibility, including time of
receipt, acceptance of tendered outstanding notes and withdrawal of tendered
outstanding notes will be determined by us in our sole discretion, which
determination will be final and binding. We reserve the absolute right to reject
any and all outstanding notes not properly tendered or any outstanding notes our
acceptance of which would, in the opinion of our counsel, be unlawful. We also
reserve the right in our sole discretion to waive any defects, irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer, including the instructions in
the letter of transmittal, will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within the time we determine. Although we intend to notify
holders of defects or irregularities with respect to tenders of outstanding
notes, neither we, the exchange agent nor any other person will incur any
liability for failure to give the notification. Tenders of outstanding notes
will not be deemed to have been made until the defects or irregularities have
been cured or waived. Any outstanding notes received by the exchange agent that
are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the exchange agent to the tendering
holders, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and (1) whose
outstanding notes are not immediately available, (2) who cannot deliver their
outstanding notes, the letter of transmittal or any other required
21
29
documents to the exchange agent or (3) who cannot complete the procedures for
book-entry transfer, prior to the expiration date, may effect a tender if:
(A) the tender is made through a member firm of the Medallion System;
(B) prior to the expiration date, the exchange agent receives from a
member firm of the Medallion System a properly completed and duly executed
Notice of Guaranteed Delivery by facsimile transmission, mail or hand
delivery setting forth the name and address of the holder, the certificate
number(s) of the outstanding notes and the principal amount of outstanding
notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days after
the expiration date, the letter of transmittal or facsimile thereof
together with the certificate(s) representing the outstanding notes or a
confirmation of book-entry transfer of the outstanding notes into the
exchange agent's account at DTC, and any other documents required by the
letter of transmittal will be deposited by the member firm of the Medallion
System with the exchange agent; and
(C) the properly completed and executed letter of transmittal or
facsimile of the letter of transmittal, as well as the certificate(s)
representing all tendered outstanding notes in proper form for transfer or
a confirmation of book-entry transfer of the outstanding notes into the
exchange agent's account at DTC, and all other documents required by the
letter of transmittal are received by the exchange agent within five New
York Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, tenders of outstanding
notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the expiration date.
To withdraw a tender of outstanding notes in the exchange offer, a
telegram, telex, letter or facsimile transmission notice of withdrawal must be
received by the exchange agent at its address set forth in this prospectus prior
to 5:00 p.m., New York City time, on the expiration date of the exchange offer.
Any notice of withdrawal must:
(1) specify the name of the person having deposited the outstanding
notes to be withdrawn;
(2) identify the outstanding notes to be withdrawn, including the
certificate number(s) and principal amount of the outstanding notes, or, in
the case of outstanding notes transferred by book-entry transfer, the name
and number of the account at DTC to be credited;
(3) be signed by the holder in the same manner as the original
signature on the letter of transmittal by which the outstanding notes were
tendered, including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee with respect to the
outstanding notes register the transfer of the outstanding notes into the
name of the person withdrawing the tender; and
(4) specify the name in which any outstanding notes are to be
registered, if different from that of the person depositing the outstanding
notes to be withdrawn.
All questions as to the validity, form and eligibility, including time of
receipt, of the notices will be determined by us, and our determination will be
final and binding on all parties. Any outstanding notes so withdrawn will be
deemed not to have been validly tendered for purposes of the exchange offer and
no exchange notes will be issued with respect to withdrawn securities unless the
outstanding notes so withdrawn are validly retendered. Any outstanding notes
which have been tendered but which are not accepted for exchange will be
returned to the holder without cost to the holder as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. Properly
withdrawn outstanding notes may be retendered by following one of the procedures
described above under "-- Procedures for Tendering" at any time prior to the
expiration date.
22
30
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or issue exchange notes for, any outstanding
notes, and may terminate or amend the exchange offer as provided in this
prospectus before the acceptance of the outstanding notes, if:
(1) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might materially impair our ability to proceed
with the exchange offer or any material adverse development has occurred in
any existing action or proceeding with respect to us or any of our
subsidiaries; or
(2) any law, statute, rule, regulation or interpretation by the Staff
of the SEC is proposed, adopted or enacted, which, in our sole judgment,
might materially impair our ability to proceed with the exchange offer or
materially impair the contemplated benefits of the exchange offer to us; or
(3) any governmental approval has not been obtained, which approval we
will, in our sole discretion, deem necessary for the consummation of the
exchange offer as contemplated by this prospectus.
If we determine in our sole discretion that any of the conditions are not
satisfied, we may (1) refuse to accept any outstanding notes and return all
tendered outstanding notes to the tendering holders, (2) extend the exchange
offer and retain all outstanding notes tendered prior to the expiration of the
exchange offer, subject, however, to the rights of holders to withdraw the
outstanding notes (see "-- Withdrawal of Tenders") or (3) waive the unsatisfied
conditions with respect to the exchange offer and accept all properly tendered
outstanding notes that have not been withdrawn.
EXCHANGE AGENT
U.S. Bank Trust National Association has been appointed as principal
exchange agent for the exchange offer. Questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for a Notice of Guaranteed Delivery should be directed
to the principal exchange agent or the Luxembourg exchange agent addressed as
follows:
U.S. BANK TRUST NATIONAL ASSOCIATION
180 E. 5th Street
St. Paul, MN 55101
Attn: Specialized Finance Department
Facsimile Transmission:
(651) 244-1537
For Information Telephone:
1 (800) 934-6802
KREDIETBANK S.A. LUXEMBOURGEOISE SOCIETE ANONYME
43, Boulevard Royal L-2955
Attn: Corporate Trust & Agencies
Luxembourg R.C. Luxembourg B 6395
Facsimile Transmission:
(352) 47 97 73 951
For Information Telephone:
(352) 74 97 39 33
DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telecopy, telephone or in person by our and our affiliates' officers
and regular employees.
23
31
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses incurred in connection with these services.
We will pay the cash expenses to be incurred in connection with the
exchange offer. Such expenses include fees and expenses of the exchange agent
and trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
outstanding notes, which is face value, as reflected in our accounting records
on the date of exchange. Accordingly, we will not recognize any gain or loss for
accounting purposes as a result of the exchange offer. The expenses of the
exchange offer will be deferred and charged to expense over the term of the
exchange notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The outstanding series C notes that are not exchanged for exchange notes
pursuant to the exchange offer will remain restricted securities. Accordingly,
the outstanding series C notes may be resold only:
(1) to us upon redemption thereof or otherwise;
(2) so long as the outstanding notes are eligible for resale pursuant
to Rule 144A, to a person inside the United States whom the seller
reasonably believes is a qualified institutional buyer within the meaning
of Rule 144A under the Securities Act in a transaction meeting the
requirements of Rule 144A, in accordance with Rule 144 under the Securities
Act, or pursuant to another exemption from the registration requirements of
the Securities Act, which other exemption is based upon an opinion of
counsel reasonably acceptable to us;
(3) outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act; or
(4) pursuant to an effective registration statement under the
Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of exchange notes, based on interpretations by the
Staff of the SEC set forth in no-action letters issued to third parties, we
believe that a holder or other person who receives exchange notes, whether or
not the person is the holder (other than a person that is our affiliate within
the meaning of Rule 405 under the Securities Act) in exchange for outstanding
notes in the ordinary course of business and who is not participating, does not
intend to participate, and has no arrangement or understanding with any person
to participate, in the distribution of the exchange notes, will be allowed to
resell the exchange notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the exchange notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act.
However, if any holder acquires exchange notes in the exchange offer for the
purpose of distributing or participating in a distribution of the exchange
notes, the holder cannot rely on the position of the Staff of the SEC expressed
in the no-action letters or any similar interpretive letters, and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction, unless an exemption from registration
is otherwise available. Further, each broker-dealer that receives exchange notes
for its own account in exchange for outstanding notes, where the outstanding
notes were acquired by the broker-dealer as a result of market-making activities
or other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of the exchange notes.
24
32
CAPITALIZATION
The following table sets forth as of March 31, 2001: (1) our actual
consolidated capitalization and (2) our as adjusted capitalization giving effect
to the offering of the outstanding series C notes and the application of the net
proceeds from that offering as set forth under "Use of Proceeds." This table
should be read in conjunction with the audited and unaudited consolidated
financial statements and related notes incorporated by reference in this
prospectus.
AS OF MARCH 31, 2001
----------------------------
ACTUAL AS ADJUSTED(1)
---------- --------------
(DOLLARS IN THOUSANDS)
Cash and cash equivalents................................... $ 10,080 $ 10,080
========== ==========
Long-term debt, including current maturities:
Existing Senior Credit Facility:
Revolving credit facility.............................. $ 261,863 $ 114,745
Tranche A term loan.................................... 216,804 216,804
Tranche B term loan.................................... 272,247 272,247
Other senior indebtedness................................. 23,914 23,914
---------- ----------
Total senior debt...................................... 774,828 627,710
9% senior subordinated notes due 2009(2).................. 388,308 388,308
Series C 9% senior subordinated notes due 2009............ -- 158,500
---------- ----------
Total subordinated debt................................ 388,308 546,808
---------- ----------
Total debt........................................ 1,163,136 1,174,518
---------- ----------
Trust Preferred Securities(3)............................... 55,250 55,250
Stockholders' investment:
Preferred Stock, $1.00 par value per share; 5,000,000
shares authorized; none issued or outstanding.......... -- --
Class A Common Stock, $0.01 par value per share;
30,000,000 shares authorized; 14,402,593 shares issued
and outstanding on an actual basis..................... 144 144
Class B Common Stock, $0.01 par value per share;
10,000,000 shares authorized; 3,312,354 shares issued
and outstanding on an actual basis..................... 33 33
Additional paid-in capital................................ 341,580 341,580
Treasury stock............................................ (1,383) (1,383)
Retained earnings......................................... 159,267 159,267
Accumulated other comprehensive income (loss)............. (57,565) (57,565)
---------- ----------
Total stockholders' investment......................... 442,076 442,076
---------- ----------
Total capitalization.............................. $1,660,462 $1,671,844
========== ==========
- ---------------
(1) As adjusted to give effect to the offering of the outstanding series C notes
and the application of the net proceeds from that offering as set forth
under "Use of Proceeds." Proceeds are net of discounts and commissions and
the estimated expenses of the offering.
(2) In April 1999, the issuer sold $300.0 million in aggregate principal amount
of its outstanding Series A 9% Senior Subordinated notes due 2009, which
were subsequently exchanged for the outstanding series B notes, and an
additional E100.0 million in aggregate principal of 9% senior subordinated
notes due 2009. The Euro-denominated notes were translated into U.S. dollars
as of March 31, 2001 using a rate of $.8831 = E1.00. On July 18, 2001, the
exchange rate was $.8588 = E1.00.
(3) Represents the Trust Preferred Securities issued by the Dura Trust in March
1998. The sole assets of the Dura Trust are approximately $57.0 million
principal amount of Parent's 7 1/2% Convertible Subordinated Debentures due
March 31, 2028, which amount is the sum of the stated liquidation preference
of the Trust Preferred Securities and the capital contributed by Parent in
exchange for the common securities of the Dura Trust. Parent has guaranteed,
on a subordinated basis, certain obligations of the Dura Trust under the
Trust Preferred Securities.
25
33
SELECTED HISTORICAL FINANCIAL DATA
The selected historical financial data set forth below as of December 31,
1996, 1997, 1998, 1999 and 2000 and for each of the years in the five-year
period then ended have been derived from our audited consolidated financial
statements. The summary historical financial data as of March 31, 2000 and 2001,
for each of the three-month periods then ended are unaudited. In the opinion of
management, the unaudited historical financial data below were prepared on the
same basis as the audited historical financial data, except as disclosed in
footnote 6 below, and include all adjustments, consisting only of normal,
recurring adjustments, necessary for fair statement of this information.
We have incorporated our consolidated financial statements as of December
31, 1999 and 2000 and for the years ended December 31, 1998, 1999 and 2000 by
reference to our Annual Report on Form 10-K for the fiscal year ended December
31, 2000 and our consolidated financial statements as of March 31, 2001 and for
the three-month periods ended March 31, 2000 and 2001 by reference to our
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001. You
should read the following selected financial data together with the
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and the audited and unaudited consolidated financial statements and
the related notes incorporated by reference into this prospectus.
DURA AUTOMOTIVE SYSTEMS, INC.
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
-------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenues..................... $245,329 $449,111 $739,467 $2,200,385 $2,633,084 $ 682,769 $ 661,853
Gross profit................. 37,519 74,025 130,949 345,680 396,540 109,115 91,907
Operating income............. 19,326 37,610 71,256 175,809 188,140 58,156 44,646
Net income................... 10,128 16,642 26,024 41,220 41,777 16,460 9,218
Basic earnings per
share(1)................... $ 1.57 $ 1.89 $ 2.43 $ 2.53 $ 2.39 $ .94 $ .52
======== ======== ======== ========== ========== ========== ==========
Diluted earnings per
share(1)................... $ 1.57 $ 1.88 $ 2.37 $ 2.46 $ 2.35 $ .90 $ .52
======== ======== ======== ========== ========== ========== ==========
OTHER FINANCIAL DATA:
Depreciation and
amortization............... $ 6,079 $ 12,303 $ 27,571 $ 76,654 $ 85,503 $ 21,788 $ 23,695
Capital expenditures, net.... 6,260 16,242 31,822 80,469 110,132 27,771 15,176
EBITDA(2).................... 25,405 49,913 98,827 252,463 273,643 79,944 68,341
Adjusted EBITDA(3)........... 25,405 49,913 98,827 268,709 289,004 79,944 70,970
Ratio of earnings to fixed
charges(4)................. 5.7x 3.7x 2.8x 1.9x 1.6x 1.9x 1.5x
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital.............. 27,528 50,304 $ 63,766 $ 162,949 $ 169,005 $ 188,680 $ 149,635
Total assets................. 246,129 419,264 929,383 2,444,867 2,357,047 2,507,355 2,304,614
Total debt................... 77,456 180,322 331,906 1,231,022 1,225,214 1,256,572 1,163,136
Total stockholders'
investment(5).............. 87,367 101,708 238,037 430,996 453,394 439,422 442,076
- ---------------
(1) Basic earnings per share were computed by dividing net income by the
weighted average number of common shares outstanding during the year.
Diluted earnings per share include (i) the effects of outstanding stock
options and warrants using the treasury stock method and (ii) the conversion
of the Trust Preferred Securities from their date of issuance on March 20,
1998.
(2) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We
26
34
believe that it is widely accepted that EBITDA provides useful information
regarding a company's ability to service and/or incur indebtedness. This
belief is based, in part, on our negotiations with our lenders who have
required that the interest payable under our existing senior credit facility
be based, in part, on our ratio of consolidated senior funded indebtedness
to EBITDA. EBITDA does not take into account our working capital
requirements, debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary use.
(3) "Adjusted EBITDA" equals EBITDA plus facility consolidation, product recall
and other charges incurred by us of $16,246 in 1999, $15,361 in 2000 and
$2,629 in the three months ended March 31, 2001.
(4) In calculating the ratio of earnings to fixed charges, earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense estimated to be
attributable to interest.
(5) Effective January 1, 2001, we adopted Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, which requires that all derivative instruments be
reported on the balance sheet at fair value and establishes criteria for
designation and effectiveness of transactions entered into for hedging
purposes. The cumulative effect of adopting SFAS No. 133 was to increase
other comprehensive income by $0.2 million, after tax. Comprehensive income
reflects the change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources.
27
35
DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions."
The issuer issued the outstanding series C notes, and will issue the
exchange notes, under an indenture, dated June 22, 2001 (the "Indenture"), among
itself, the guarantors and U. S. Bank Trust National Association, as trustee.
The terms of the exchange notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended. The issuer issued the outstanding series B notes under an indenture,
dated April 22, 1999 (the "Old Indenture"), among itself, the guarantors and the
trustee. The Old Indenture is substantially the same as the Indenture.
The following description is a summary of the material provisions of the
Indenture. It does not restate the Indenture in its entirety. We urge you to
read the Indenture because it, and not this description, will define your rights
as holders of the exchange notes. Copies of the Indenture and the registration
rights agreement are available as set forth above under "Where You Can Find More
Information." Certain defined terms used in this description but not defined
below under "-- Certain Definitions" have the meanings assigned to them in the
Indenture.
As of the date of the Indenture, all of the issuer's material domestic
subsidiaries will be "Restricted Subsidiaries." However, under the circumstances
described below under the subheading "-- Certain Covenants -- Designation of
Restricted and Unrestricted Subsidiaries," the issuer is permitted to designate
certain of its subsidiaries as "Unrestricted Subsidiaries." The Unrestricted
Subsidiaries will not be subject to many of the restrictive covenants in the
Indenture. The Unrestricted Subsidiaries will not guarantee the notes.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
The Notes
- are general unsecured obligations of the issuer;
- are subordinated in right of payment to all existing and future Senior
Debt of the issuer;
- are pari passu with all existing and future subordinated, unsecured
Indebtedness of the issuer that does not expressly provide that it is
subordinated to the notes; and
- are unconditionally guaranteed by the guarantors.
The Guarantees
The notes are guaranteed by the Parent and all of the material Domestic
Restricted Subsidiaries of the issuer.
Each guaranty of the notes:
- is a general unsecured obligation of the guarantor;
- is subordinated in right of payment to all existing and future Senior
Debt of the guarantor; and
- is pari passu in right of payment with any future senior subordinated
Indebtedness of the guarantor.
Not all of our subsidiaries guaranteed the notes. In the event of a
bankruptcy, liquidation or reorganization of any of these non-guarantor
subsidiaries, these non-guarantor subsidiaries will pay the holders of their
debts and their trade creditors before they will be able to distribute any of
their assets to us. See "Risk Factors -- The Issuer Conducts Certain of its
Operations Through Subsidiaries and Not All of the Issuer's Subsidiaries Are
Subsidiary Guarantors."
PRINCIPAL, MATURITY AND INTEREST
The Indenture provides for the issuance by the issuer of notes with a
maximum aggregate principal amount of $600.0 million, of which $458.5 million
will be issued in the exchange offer. The issuer may issue
28
36
additional notes from time to time. Any offering of additional notes is subject
to the covenant described below under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock." The
notes and any additional notes subsequently issued under the Indenture would be
treated as a single class for all purposes under the Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase. The
notes will be issued in fully registered form, without coupons, in denominations
of $1,000 and integral multiples thereof. The notes will mature on May 1, 2009.
Interest on the notes accrues at the rate of 9% per annum and will be
payable semi-annually in arrears on May 1 and November 1, commencing on November
1, 2001. The issuer will make each interest payment to the holders of record on
the immediately preceding April 15 and October 15.
Interest on the notes will accrue from May 1, 2001. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
Payments of principal, premium and liquidated damages, if any, and interest
will be made at the corporate trust office of the Paying Agent in New York City
by United States dollar check drawn on, or, if a holder has given wire
instructions to the issuer, by wire transfer to a United States dollar account
maintained by the holder with a bank located in New York City. If and for so
long as the exchange notes are listed on the Luxembourg Stock Exchange and the
rules of such stock exchange so require, the issuer will maintain a Paying Agent
in Luxembourg. If a payment date is not a business day (as defined in the
Indenture) at a place of payment, payment may be made at that place on the next
succeeding business day and no interest shall accrue for the intervening period.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as principal paying agent and registrar at
its corporate trust offices in the City of New York, State of New York.
Kredietbank S.A. Luxembourgeoise Societe Anonyme will initially act as an
additional paying agent in Luxembourg. The issuer may change the paying agent or
registrar without prior notice to the Holders, and the issuer or any of its
subsidiaries may act as paying agent or registrar; provided, however, that if
and for so long as the exchange notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the issuer will publish
notice of the change in the Transfer Agent in Luxembourg in a daily newspaper
with general circulation in Luxembourg (which is expected to be the Luxembourg
Wort).
TRANSFER AND EXCHANGE
A holder may transfer or exchange notes in accordance with the Indenture.
The registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and the issuer may
require a holder to pay any taxes and fees required by law or permitted by the
Indenture. The issuer is not required to transfer or exchange any note selected
for redemption. Also, the issuer is not required to transfer or exchange any
note for a period of 15 days before a selection of notes to be redeemed.
The registered holder of a note will be treated as the owner of it for all
purposes.
SUBSIDIARY GUARANTEES
The guarantors will jointly and severally guarantee the issuer's
obligations under the notes. Each subsidiary guaranty will be subordinated to
the prior payment in full of all Senior Debt of that guarantor. The obligations
of each guarantor under its subsidiary guaranty are limited as necessary to
prevent that subsidiary guaranty from constituting a fraudulent conveyance under
applicable law. See "Risk Factors -- If a Court Were to Find That the Issuance
of the Subsidiary Guarantees Constituted a Fraudulent Conveyance, That Court
Could Avoid the Subsidiary Guarantors' Obligations under the Subsidiary
Guarantees."
29
37
A guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not such
guarantor is the surviving person), another person, other than the issuer or
another guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either:
(a) the person acquiring the property in any such sale or
disposition or the person formed by or surviving any such consolidation
or merger assumes all the obligations of that guarantor under the
Indenture, its subsidiary guaranty and the registration rights
agreements pursuant to supplemental indenture and appropriate collateral
documents satisfactory to the Trustee; or
(b) the Net Proceeds of such sale or other disposition are applied
in accordance with the "Asset Sale" provisions of the Indenture.
The subsidiary guaranty of a guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that guarantor (including by way of
merger or consolidation) to a person that is not (either before or after
giving effect to such transaction) a Restricted Subsidiary of the issuer,
if the guarantor applies the Net Proceeds of that sale or other disposition
in accordance with the "Asset Sale" provisions of the Indenture;
(2) in connection with any sale of all of the Capital Stock of a
guarantor to a person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary of the issuer, if the issuer
applies the Net Proceeds of that sale in accordance with the "Asset Sale"
provisions of the Indenture; or
(3) if the issuer properly designates any Restricted Subsidiary that
is a guarantor as an Unrestricted Subsidiary.
See "-- Repurchase at the Option of Holders -- Asset Sales."
PARENT GUARANTY
The notes will be unconditionally guaranteed by Parent. The parent guaranty
is subordinated to the prior payment in full of all Senior Debt of Parent.
Parent may not sell or otherwise dispose of all or substantially all of its
assets to, or consolidate or merge with or into (whether or not Parent is the
Surviving Person) another person unless immediately after giving effect to that
transaction, no Default or Event of Default exists and the person acquiring the
property in any such sale or disposition or the person formed by or surviving
any such consolidation or merger assumes all obligations of Parent under the
Indenture and the registration rights agreement pursuant to a supplemental
indenture and appropriate collateral documents satisfactory to the Trustee.
SUBORDINATION
The payment of principal, interest and premium and liquidated damages, if
any, on the notes is subordinated to the prior payment in full of all Senior
Debt of the issuer, including Senior Debt incurred after the date of the
Indenture. As of March 31, 2001, after giving effect to the offering of the
outstanding series C notes and the application of the net proceeds of that
offering, the notes would have been subordinated to approximately $627.7 million
of Senior Debt of the issuer.
The holders of Senior Debt will be entitled to receive payment in full of
all Obligations due in respect of Senior Debt (including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt) before the holders of notes will be entitled to receive
any payment with respect to the notes (except that holders of notes may receive
and retain Permitted Junior Securities and payments made
30
38
from the trust described under "-- Legal Defeasance and Covenant Defeasance"),
in the event of any distribution to creditors of the issuer:
(1) in a liquidation or dissolution of the issuer;
(2) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the issuer or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of the issuer's assets and liabilities.
The issuer also may not make any payment in respect of the notes (except in
Permitted Junior Securities or from the trust described under "-- Legal
Defeasance and Covenant Defeasance") if:
(1) a payment default on Designated Senior Debt occurs and is
continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on any series of
Designated Senior Debt that permits holders of that series of Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the issuer or the holders
of any Designated Senior Debt.
Payments on the notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such
default is cured or waived; and
(2) in case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the
maturity of any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice; and
(2) all scheduled payments of principal, interest and premium and
liquidated damages, if any, on the notes that have come due have been paid
in full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 days.
If the Trustee or any holder of the notes receives a payment in respect of
the notes (except in Permitted Junior Securities or from the trust described
under "-- Legal Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Trustee or the holder has actual knowledge that the payment is
prohibited;
the Trustee or the holder, as the case may be, shall hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the Trustee or the holder, as the case may be,
shall deliver the amounts in trust to the holders of Senior Debt or their proper
representative.
The issuer must promptly notify holders of Senior Debt if payment of the
notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event
of a bankruptcy, liquidation or reorganization of the issuer, holders of notes
may recover less ratably than creditors of the issuer who are holders of Senior
Debt. See "Risk Factors -- The Notes and Guarantees are Unsecured Senior
Subordinated Obligations."
31
39
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) after payment in full of all Obligations under the Credit
Agreement, any other Senior Debt of the issuer permitted under the
Indenture the principal amount of which is $20.0 million or more and which
has been designated by the issuer as "Designated Senior Debt."
"Permitted Junior Securities" means:
(1) Equity Interests in the issuer, Parent or any guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any
debt securities issued in exchange for Senior Debt to substantially the
same extent as, or to a greater extent than, the notes, the Parent Guaranty
and the subsidiary guarantees are subordinated to Senior Debt under the
Indenture.
"Senior Debt" means:
(1) all Indebtedness of the issuer, any guarantor, or Parent
outstanding under Credit Facilities and all Hedging Obligations with
respect thereto;
(2) any other Indebtedness of the issuer or any guarantor permitted to
be incurred under the terms of the Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the notes or any of the
guarantees; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include:
(1) any liability for federal, state, local or other taxes owed or
owing by the issuer;
(2) any Indebtedness of the issuer or Parent to any of its
subsidiaries or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of
the Indenture.
OPTIONAL REDEMPTION
At any time prior to May 1, 2002, the issuer may redeem up to 35% of the
aggregate principal amount of the notes (calculated after giving effect to any
issuance of additional notes under the Indenture) at a redemption price of 109%
of the principal amount thereof, plus accrued and unpaid interest and liquidated
damages, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of the notes remain
outstanding immediately after the occurrence of each such redemption
(excluding notes held by Parent, the issuer and their respective
subsidiaries); and
(2) the redemption must occur within 90 days of the date of the
closing of any such Equity Offering.
Except pursuant to the preceding paragraph, the notes will not be
redeemable at the issuer's option prior to May 1, 2004. The issuer is not
prohibited, however, from acquiring the notes by means other than a redemption,
whether pursuant to an issuer tender or otherwise, assuming such acquisition
does not otherwise violate the terms of the Indenture.
After May 1, 2004, the issuer may redeem all or a part of the notes upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus
32
40
accrued and unpaid interest and liquidated damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on May 1 of the years indicated below:
YEAR PERCENTAGE
- ---- ----------
2004........................................................ 104.50%
2005........................................................ 103.00%
2006........................................................ 101.50%
2007 and thereafter......................................... 100.00%
If and for so long as the exchange notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the issuer will cause a
notice of redemption of the exchange notes to be published in a daily newspaper
with general circulation in Luxembourg (which is expected to be the Luxembourg
Wort).
MANDATORY REDEMPTION
The issuer is not required to make mandatory redemption or sinking fund
payments with respect to the notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
If a Change of Control occurs, each holder of notes will have the right to
require the issuer to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of that holder's notes pursuant to a Change of Control Offer
on the terms set forth in the Indenture. In the Change of Control Offer, the
issuer will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of notes repurchased plus accrued and unpaid interest
and liquidated damages, if any, thereon, to the date of purchase. Within 30 days
following any Change of Control, unless the issuer has exercised its right to
redeem the notes as described under "-- Optional Redemption," the issuer will
mail a notice to each holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase notes on the Change
of Control Payment Date specified in such notice, which date shall be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the Indenture and described in such
notice. The issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change of
Control provisions of the Indenture, the issuer will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Change of Control provisions of the Indenture by virtue of
such conflict.
On the Change of Control Payment Date, the issuer will, to the extent
lawful:
(1) accept for payment all notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Trustee the notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of notes or portions thereof being purchased by the
issuer.
The Paying Agent will promptly mail to each holder of notes so tendered the
Change of Control Payment for such notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new note equal in principal amount to any unpurchased portion of the notes
surrendered, if any; provided that each such new note will be in a principal
amount of $1,000 or an integral multiple thereof.
33
41
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control, the
issuer will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of notes required by this covenant. If the issuer does not
obtain such consents or repay such borrowings, the issuer will be prohibited
from purchasing the notes. The issuer will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The provisions described above that require the issuer to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the holders of the notes to require that the
issuer repurchase or redeem the notes in the event of a takeover,
recapitalization or similar transaction.
The issuer will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the issuer and
purchases all notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of the issuer and its
subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of notes to require the issuer to repurchase such notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of the issuer and its subsidiaries taken as a whole to another person or
group may be uncertain.
ASSET SALES
The issuer will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) the issuer (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of (as determined in good faith by the issuer);
(2) such fair market value is determined by the issuer's Board of
Directors and evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the issuer
or such Restricted Subsidiary is in the form of cash or cash equivalents.
For purposes of this provision, each of the following shall be deemed to be
cash:
(a) any liabilities (as shown on the issuer's or such Restricted
Subsidiary's most recent balance sheet) of the issuer or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the notes or any subsidiary guaranty)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the issuer or such restricted
subsidiary from further liability;
(b) any securities, notes or other obligations received by the
issuer or any such Restricted Subsidiary from such transferee that are
converted by the issuer or such Restricted Subsidiary into cash within
180 days after the consummation of such Asset Sale (to the extent of the
cash received in that conversion); and
(c) any Designated Noncash Consideration received by the issuer or
any of its Restricted Subsidiaries in such Asset Sale; provided that the
aggregate fair market value (as determined above) of such Designated
Noncash Consideration, taken together with the fair market value at the
time of receipt of all other Designated Noncash Consideration received
pursuant to this clause (c) less the
34
42
amount of Net Proceeds previously realized in cash from prior Designated
Noncash Consideration is less than 5.0% of Total Assets at the time of
the receipt of such Designated Noncash Consideration (with the fair
market value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to subsequent
changes in value).
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the issuer may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if such Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; and/or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the Issuer may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $20.0 million, the issuer will make
an Asset Sale Offer to all holders of notes and all holders of other
Indebtedness that is pari passu with the notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of the principal amount plus accrued and unpaid interest and liquidated damages,
if any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the issuer may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal amount
of notes and such other pari passu Indebtedness tendered. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indenture, the issuer will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
conflict.
The agreements governing the issuer's outstanding Senior Debt currently
prohibit the issuer from purchasing any notes, and also provide that certain
change of control or asset sale events with respect to the issuer would
constitute a default under these agreements. Any future credit agreements or
other agreements relating to Senior Debt to which the issuer becomes a party may
contain similar restrictions and provisions. In the event a Change of Control or
Asset Sale occurs at a time when the issuer is prohibited from purchasing notes,
the issuer could seek the consent of its senior lenders to the purchase of notes
or could attempt to refinance the borrowings that contain such prohibition. If
the issuer does not obtain such a consent or repay such borrowings, the issuer
will remain prohibited from purchasing notes. In such case, the issuer's failure
to purchase tendered notes would constitute an Event of Default under the
Indenture which would, in turn, constitute a default under such Senior Debt. In
such circumstances, the subordination provisions in the Indenture would likely
restrict payments to the holders of notes.
35
43
SELECTION AND NOTICE
If less than all of the notes are to be redeemed at any time, the Trustee
will select notes for redemption as follows:
(1) if the notes are listed, in compliance with the requirements of
the principal national securities exchange on which the notes are listed;
or
(2) if the notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.
No notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each holder of notes to be redeemed at its registered
address. Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note shall state the portion of the principal amount thereof to
be redeemed. A new note in principal amount equal to the unredeemed portion of
the original note will be issued in the name of the holder thereof upon
cancellation of the original note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on notes or portions of them called for redemption.
CERTAIN COVENANTS
Restricted Payments
The issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the issuer's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the issuer or any
of its Restricted Subsidiaries) or to the direct or indirect holders of the
issuer's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the issuer or to the issuer or
a Restricted Subsidiary of the issuer);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the issuer) any Equity Interests of the issuer or
any direct or indirect parent of the issuer;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the notes or the subsidiary guarantees, except a payment of
interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after
giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the issuer would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock;" and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the issuer and its Restricted
Subsidiaries after the Series A Original Issue Date
36
44
(excluding Restricted Payments permitted by clauses (2), (3) and (4) of
the next succeeding paragraph), is less than the sum, without
duplication, of:
(a) 50% of the Consolidated Net Income of the issuer for the
period (taken as one accounting period) from March 31, 1999 to the
end of the issuer's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds or fair market value
of Productive Assets received by the issuer since the Series A
Original Issue Date as a contribution to its common equity capital or
from the issue or sale of Equity Interests of the issuer (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the issuer that have been converted into or exchanged
for such Equity Interests (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a subsidiary of the
issuer), plus
(c) to the extent that any Restricted Investment that was made
after the date of the Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment; plus
(d) without duplication of any amounts included in clause (b)
above, 100% of the aggregate Net Cash Proceeds or the fair market
value of Productive Assets received by the issuer as common equity
contributions by a holder of the Equity Interests of the issuer
(excluding any net cash proceeds from an equity contribution which
has been financed, directly or indirectly using funds (1) borrowed
from the issuer or any of its subsidiaries, unless and until and to
the extent such borrowing is repaid or (2) contributed, extended,
guaranteed or advanced by the issuer or by any of its subsidiaries);
plus
(e) any dividends paid in cash or Productive Assets received by
the issuer or a Restricted Subsidiary of the issuer after the Series
A Original Issue Date from any Unrestricted Subsidiary to the extent
that such dividends were not otherwise included in Consolidated Net
Income; plus
(f) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the date of the
Indenture, the fair market value of the issuer's Investment in such
Subsidiary (which consists of cash or Productive Assets) as of the
date of such redesignation.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration, such payment would
have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Parent, the issuer or any
guarantor or of any Equity Interests of Parent, the issuer or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the
Issuer) of, Equity Interests of the issuer (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (3)(b) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the issuer or any guarantor with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
37
45
(4) the payment of any dividend by a Restricted Subsidiary of the
issuer to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Parent, the Issuer or any Restricted
Subsidiary of the issuer held by any employee, officer or director (in each
case either current or former) of the Issuer (or any of its Restricted
Subsidiaries') pursuant to any management equity subscription agreement or
stock plan; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $5.0 million in any twelve-month period;
(6) cash dividends or loans from the issuer to Parent for the purpose
of permitting Parent to pay its ordinary operating expenses (including,
without limitation, directors' fees, indemnification obligations,
professional fees and expenses, etc.) in an aggregate amount not to exceed
$5.0 million in any twelve-month period;
(7) payments to Parent not to exceed $100,000 in any fiscal year,
solely to enable Parent to make payments to holders of its Capital Stock in
lieu of issuance of fractional shares of its Capital Stock;
(8) repurchases of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise
price thereof;
(9) the declaration and payment of dividends to holders of any class
or series of Designated Preferred Stock (other than Disqualified Capital
Stock) issued after the Series A Original Issue Date; provided that, at the
time of such issuance, the issuer, after giving effect to such issuance on
a pro forma basis, would have had a Fixed Charge Coverage Ratio of at least
2.0 to 1.0;
(10) other Restricted Payments in an aggregate amount not to exceed
$10.0 million since the Series A Original Issue Date;
(11) the distribution, as a dividend or otherwise, of shares of
Capital Stock of any Unrestricted Subsidiary of the issuer;
(12) cash dividends or loans from the issuer to Parent in amounts
equal to amounts required for Parent to pay franchise taxes and Federal,
state and local taxes to the extent such income taxes are attributable to
the income of the issuer and its Restricted Subsidiaries; and
(13) dividends from the issuer to Parent in an amount sufficient to
pay dividends on Parent's 7 1/2% Convertible Trust Preferred Securities Due
2028, that are outstanding on the issue date of the notes.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the issuer or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the issuer shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this "Restricted Payments"
covenant were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
Incurrence of Indebtedness and Issuance of Preferred Stock
The issuer will not, and will not permit any of its subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
issuer will not issue any Disqualified Stock and will not permit any of its
subsidiaries to issue any shares of preferred stock; provided, however, that the
issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified
38
46
Stock, and the guarantors may incur Indebtedness (including Acquired Debt) or
issue preferred stock, if, in each case, the Fixed Charge Coverage Ratio for the
issuer's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the issuer and any Restricted Subsidiary of
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1) (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Issuer and its Restricted Subsidiaries
thereunder) not to exceed $950.0 million less any mandatory prepayments
actually made thereunder (to the extent, in the case of payments of
revolving credit Indebtedness, that the corresponding commitments have been
permanently reduced) or scheduled payments actually made thereunder;
(2) the incurrence by the issuer and its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the issuer and the guarantors of Indebtedness
represented by the notes and the related guarantees to be issued on the
date of the Indenture and the exchange notes and the related guarantees to
be issued pursuant to the registration rights agreement (including the
exchange notes and the related guarantees to be issued in exchange for the
outstanding notes);
(4) the incurrence by the issuer or any of its Restricted Subsidiaries
of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the issuer or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed 5% of Total Assets at any time outstanding;
(5) the incurrence by the issuer or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the Indenture to be
incurred under the first paragraph of this covenant or clauses (2), (3),
(4), (5), or (10) of this paragraph;
(6) the incurrence by the issuer or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among the issuer and any of its
Restricted Subsidiaries; provided, however, that:
(a) if the issuer or any guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
notes, in the case of the issuer, or the guaranty of such guarantor, in
the case of a guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a person other than
the issuer or a Restricted Subsidiary thereof and (ii) any sale or other
transfer of any such Indebtedness to a person that is not either the
issuer or a Restricted Subsidiary thereof; shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the issuer or
such subsidiary, as the case may be, that was not permitted by this
clause (6);
(7) the incurrence by the issuer or any of its Restricted Subsidiaries
of Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of the Indenture to be outstanding or to
hedge exposure to foreign currency fluctuations or commodity price risk
with respect to any commodity purchases;
39
47
(8) (a) the guarantee by the issuer or any of the guarantors of
Indebtedness of the issuer or a guarantor that was permitted to be incurred
by another provision of this covenant; and
(b) the guarantee by any Restricted Subsidiary of the issuer that
is not a guarantor of Indebtedness of another Restricted Subsidiary of the
issuer that is not a guarantor that was permitted to be incurred by another
provision of this covenant;
(9) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock: provided, in each such case, that the amount thereof is
included in Fixed Charges of the issuer as accrued;
(10) the incurrence by the issuer or any of the Restricted
Subsidiaries of additional Indebtedness or Disqualified Stock in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (10), not to exceed $50.0 million;
(11) the incurrence by the issuer's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the issuer that was not permitted by this clause (11);
(12) the incurrence of Indebtedness (including letters of credit) in
respect of workers' compensation claims, self-insurance obligations,
performance, surety, bid or similar bonds and completion guarantees
provided by the issuer or one of its Restricted Subsidiaries in the
ordinary course of business and consistent with past practices;
(13) Indebtedness arising from agreements of the issuer or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price, earn out or other similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a
Restricted Subsidiary, other than guarantees of Indebtedness incurred by
any person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received
by the issuer and its Restricted Subsidiaries in connection with such
disposition;
(14) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is Non-Recourse Debt (except for
Standard Securitization Undertakings) with respect to the issuer and its
other Restricted Subsidiaries;
(15) Indebtedness of the issuer evidenced by promissory notes
subordinated to the notes and the exchange notes issued to employees of the
issuer and its subsidiaries in lieu of cash payment for at any time Equity
Interest of Parent being repurchased from such employees; provided; that
the aggregate amount of such Indebtedness does not exceed $5.0 million at
any one time outstanding;
(16) guarantees of Indebtedness of any other person incurred by the
issuer or a Restricted Subsidiary in the ordinary course of business in an
aggregate principal amount not to exceed $5.0 million at any one time
outstanding; and
(17) Indebtedness consisting of take-or-pay obligations contained in
supply agreements entered into by the issuer or its subsidiaries in the
ordinary course.
40
48
Limitation on Foreign Indebtedness
The issuer will not permit any Restricted Subsidiary of the issuer that is
not a guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) unless:
(1) after giving effect to the incurrence of such Indebtedness and the
receipt of the application of the proceeds thereof;
(a) if, as a result of the incurrence of such Indebtedness such
Restricted Subsidiary will become subject to any restriction or
limitation on the payment of dividends or the making of other
distributions,
(i) the Fixed Charge Coverage Ratio of Restricted Subsidiaries
that are not guarantors (determined on a pro forma basis for the last
four fiscal quarters for which financial statements are available at
the date of determination) is greater than 2.5 to 1.0; and
(ii) the issuer's Fixed Charge Coverage Ratio (determined on a
pro forma basis for the last four fiscal quarters of the issuer for
which financial statements are available at the date of
determination) is greater than 2.0 to 1.0; and
(b) in any other case, the issuer's Fixed Charge Coverage Ratio
(determined on a pro forma basis for the last four fiscal quarters of
the issuer for which financial statements are available at the date of
determination) is greater than 2.0 to 1.0; and
(2) no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause (1)(b) of
the foregoing paragraph is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the issuer will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
All calculations required under the prior two paragraphs hereof shall be
made in a manner consistent with the calculations required under the covenant
described under "Incurrence of Indebtedness and Issuance of Preferred Stock."
Liens
The issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to the issuer or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the issuer or any of its Restricted Subsidiaries;
(2) make loans or advances to the issuer or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the issuer or any of
its Restricted Subsidiaries.
41
49
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Indenture;
(2) the Indenture, the notes and the guarantees;
(3) Indebtedness incurred by a Restricted Subsidiary that is not a
guarantor in compliance with the provisions set forth under the caption
"-- Limitation on Foreign Indebtedness."
(4) applicable law, regulation or order;
(5) any instrument governing Indebtedness or Capital Stock of a person
acquired by the issuer or any of its Restricted Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any person, or the
properties or assets of any person, other than the person, or the property
or assets of the person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture
to be incurred;
(6) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of
the nature described in clause (3) of the preceding paragraph;
(8) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(9) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(12) customary provisions in agreements with respect to Permitted
Joint Ventures;
(13) Indebtedness incurred after the date of the Indenture in
accordance with the terms of the Indenture; provided; that the restrictions
contained in the agreements governing such new Indebtedness are, in the
good faith judgment of the Board of Directors of the issuer, not materially
less favorable, taken as a whole, to the holders of the notes than those
contained in the agreements governing Indebtedness outstanding on the date
of the Indenture;
(14) any encumbrance or restriction of a Securitization Entity
effected in connection with a Qualified Securitization Transaction; and
(15) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (1) through (14) above; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the Board of Directors, no more restrictive with respect to such dividend
and other payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
Merger, Consolidation or Sale of Assets
The issuer may not, directly or indirectly: (1) consolidate or merge with
or into another person (whether or not the issuer is the surviving corporation);
or (2) sell, assign, transfer, convey or otherwise dispose of all
42
50
or substantially all of the properties or assets of the issuer and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another person; unless:
(1) either: (a) the issuer is the surviving corporation; or (b) the
person formed by or surviving any such consolidation or merger (if other
than the issuer) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation, partnership,
limited liability company or trust organized or existing under the laws of
the United States, any state thereof or the District of Columbia;
(2) the person formed by or surviving any such consolidation or merger
(if other than the issuer) or the person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of the issuer under the notes, the Indenture and the
registration rights agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) the issuer or the person formed by or surviving any such
consolidation or merger (if other than the issuer), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made
will, on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock."
In addition, the issuer may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among the issuer and any of the
guarantors.
Transactions with Affiliates
The issuer will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable
to the issuer or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the issuer or such
Restricted Subsidiary with an unrelated person; and
(2) the issuer delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of
Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion as to the fairness to the issuer or the
relevant Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the issuer or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the issuer or such Restricted Subsidiary;
43
51
(2) transactions between or among the issuer and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to persons who are not
otherwise Affiliates of the issuer;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the issuer; and
(5) Restricted Payments that are permitted by the provisions of the
Indenture described above under the caption "-- Restricted Payments;"
(6) providing indemnity to officers, directors, or employees of the
issuer or any of its subsidiaries as determined in good faith by the Board
of Directors of the issuer;
(7) the payment of customary management, consulting and advisory fees
and related expenses to Hidden Creek Industries or its affiliates
consistent with past practices, including, without limitation, in
connection with acquisitions, divestitures or financings by Parent, the
issuer or any of the issuer's Restricted Subsidiaries;
(8) the existence of, or the performance by the issuer or any of its
Restricted Subsidiaries of its obligations under the terms of, any
agreement to which it is a party as of the date of the Indenture, and any
similar agreements which it may enter into thereafter; provided, however,
that the existence of, or the performance by the issuer or any of its
Restricted Subsidiaries of obligations under, any future amendment to any
such existing agreement or under any similar agreement entered into after
the date of the Indenture shall only be permitted by this clause to the
extent that the terms of any such amendment or similar agreement are not
disadvantageous to the holders in any material respect;
(9) transactions effected as part of a Qualified Securitization
Transaction;
(10) transactions with customers, joint venture partners, clients and
suppliers, in each case in the ordinary course of business and otherwise in
compliance with the terms of the Indenture which are fair to the issuer or
its Restricted Subsidiaries, in the reasonable determination of the Board
of Directors of the issuer;
(11) the grant of stock options, restricted stock or similar rights to
the issuer's employees, directors and consultants pursuant to plans
approved by the Board of Directors of the issuer; and
(12) loans or advances to employees or consultants in the ordinary
course of business and consistent with past practices, which are approved
by a majority of the Board of Directors of the issuer in good faith.
Additional Subsidiary Guarantees
If the issuer or any of its Restricted Subsidiaries acquires or creates
another material Domestic Restricted Subsidiary after the dates of the Indenture
and the newly acquired or created material Domestic Restricted Subsidiary
guarantees any obligations under any Credit Facility, then that newly acquired
or created Domestic Restricted Subsidiary must become a guarantor and execute a
supplemental indenture and deliver an Opinion of Counsel to the Trustee within
10 Business Days of the date on which it guaranteed any obligation under any of
the Credit Facilities. If any subsidiary that is not a guarantor at any time
guarantees Indebtedness of the issuer or a guarantor, the issuer will cause such
subsidiary to simultaneously execute and deliver a supplemental indenture
providing for the guaranty of the payment of the notes by such subsidiary.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of the issuer may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the issuer and its Restricted Subsidiaries in the subsidiary so designated
will be deemed to be an Investment made as of the time of such designation and
will either reduce the amount available for Restricted Payments under the first
paragraph of the covenant described above under the caption "-- Restricted
Payments" or reduce the amount available for future Investments under one or
more clauses of the definition of Permitted Investments,
44
52
as the issuer shall determine. That designation will only be permitted if such
Investment would be permitted at that time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if the redesignation would not cause a Default.
No Senior Subordinated Debt
The issuer shall not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the issuer and senior in any respect in right of
payment to the notes. No guarantor shall incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of such guarantor and senior in any respect
in right of payment to such guarantor's guaranty.
Payments for Consent
The issuer and Parent will not, and will not permit any of their
subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any holder of notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the notes issued thereunder unless such consideration is
offered to be paid and is paid to all holders of such notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
Reports
Whether or not required by the SEC, so long as any notes are outstanding,
the issuer will furnish to the holders of notes, within five days of filing such
reports with the SEC:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the issuer were required to file such Forms, including a "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
and, with respect to the annual information only, a report on the annual
financial statements by the issuer's certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the issuer were required to file such reports.
In addition, following the consummation of the exchange offer contemplated
by the registration rights agreement, whether or not required by the SEC, the
issuer will file a copy of all of the information and reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the SEC's rules and regulations (unless the SEC will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the issuer and the
guarantors have agreed that, for so long as any notes remain outstanding, they
will furnish to the holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act. Reports and other filings made by
Parent that include all of the information referred to in clauses (1) and (2)
above with respect to Parent and its consolidated subsidiaries shall be deemed
to satisfy the obligations of the issuer and/or the guarantors set forth above
as long as such reports and filings include the information required by Rule
3-10 of Regulation S-X; provided that Parent does not have any business
operations other than those conducted through the issuer.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
liquidated damages with respect to, any notes whether or not prohibited by
the subordination provisions of the Indenture;
45
53
(2) default in payment when due of the principal of, or premium, if
any, on the notes whether or not prohibited by the subordination provisions
of the Indenture;
(3) failure by the issuer or any of its Restricted Subsidiaries to
comply with the provisions described under the caption "-- Certain
Covenants -- Merger, Consolidation or Sale of Assets;"
(4) failure by the issuer or any of its Restricted Subsidiaries for 60
days after notice to comply with any of the other agreements in the
Indenture;
(5) default under any mortgage, Indenture or instrument under which
there is issued and outstanding any Indebtedness for money borrowed by the
issuer or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the issuer or any of its Restricted Subsidiaries) whether
such Indebtedness or guarantee now exists, or is created after the dates of
the Indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates
$20.0 million or more;
(6) failure by the issuer or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $20.0 million, which judgments are
not paid, vacated, discharged, stayed or non-appealable for a period of 60
days, and in the event such judgment is covered by insurance, an
enforcement proceeding has been commenced by any creditor upon such
judgment or decree which is not promptly stayed;
(7) except as permitted by the Indenture, any guaranty shall be held
in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any guarantor, or any
Person acting on behalf of any guarantor, shall deny or disaffirm its
obligations under its subsidiary guaranty or Parent, or any person acting
on behalf of Parent, shall deny or disaffirm its obligations under the
parent guaranty; and
(8) certain events of bankruptcy or insolvency with respect to Parent,
the issuer or any of its Significant Subsidiaries.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the issuer, any subsidiary that is a
Significant Subsidiary or any group of subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the then outstanding notes may declare all the notes to be
due and payable immediately.
Holders of the notes issued under the Indenture may not enforce the
Indenture or the notes except as provided in the Indenture. Subject to certain
limitations, holders of a majority in principal amount of the then outstanding
notes issued under the Indenture may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from holders of the notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest or liquidated damages) if it
determines that withholding notice is in their interest.
The holders of a majority in aggregate principal amount of the notes issued
under the Indenture then outstanding by notice to the Trustee may on behalf of
the holders of all of the notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or liquidated damages on, or the principal
of, the notes.
The issuer is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the issuer is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
46
54
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Parent, the
issuer or any guarantor, as such, shall have any liability for any obligations
of the issuer or the guarantors under the notes, the Indenture, the subsidiary
guarantees, the parent guaranty or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder of notes by accepting
a note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the notes. The waiver may not be effective
to waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Under the Indenture, the issuer may, at its option and at any time, elect
to have all of its obligations discharged with respect to any outstanding notes
under such Indenture and all obligations of the guarantors discharged with
respect to their guarantees ("Legal Defeasance") except for:
(1) the rights of holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and liquidated damages,
if any, on such notes when such payments are due from the trust referred to
below;
(2) the issuer's obligations with respect to the notes concerning
issuing temporary notes, registration of notes, mutilated, destroyed, lost
or stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and the issuer's and the guarantor's obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the issuer may, at its option and at any time, elect to have
the obligations of the issuer and the guarantors released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the issuer must irrevocably deposit with the Trustee, in trust,
for the benefit of the holders of the notes, cash in U.S. Dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, or
interest and premium and liquidated damages, if any, on such outstanding
notes on the stated maturity or on the applicable redemption date, as the
case may be, and the issuer must specify whether the notes are being
defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the issuer shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
of the Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the holders of the outstanding notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the issuer shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the holders of such outstanding notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant
47
55
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing either: (a) on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit); or (b) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which the issuer or
any of its subsidiaries is a party or by which the issuer or any of its
subsidiaries is bound;
(6) the issuer must have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy of the
issuer or any guarantor between the date of deposit and the 91st day
following the deposit and assuming that no holder is an "insider" of the
issuer under applicable bankruptcy law, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(7) the issuer must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the issuer with the intent of
preferring the holders of such notes over the other creditors of the issuer
with the intent of defeating, hindering, delaying or defrauding creditors
of the issuer or others; and
(8) the issuer must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, neither the
Indenture nor the notes issued under the Indenture may be amended or
supplemented without the consent of the holders of at least a majority in
principal amount of the notes issued under the Indenture then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, notes), and any existing default or
compliance with any provision of the Indenture or the notes may be waived with
the consent of the holders of a majority in principal amount of the then
outstanding notes issued under the Indenture (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, notes issued under the Indenture).
Without the consent of each applicable holder affected, an amendment or
waiver may not (with respect to any notes held by a non-consenting holder):
(1) reduce the principal amount of notes whose holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note
or alter the provisions with respect to the redemption of the notes (other
than provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on
any note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or liquidated damages, if any, on the notes
(except a rescission of acceleration of the notes by the holders of at
least a majority in aggregate principal amount of the notes issued under
the Indenture and a waiver of the payment default that resulted from such
acceleration);
(5) make any note payable in money other than that stated in the
notes;
48
56
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of holders of notes to receive
payments of principal of, or interest or premium or liquidated damages, if
any, on the notes;
(7) waive a redemption payment with respect to any note (other than a
payment required by one of the covenants described above under the caption
"-- Repurchase at the Option of Holders");
(8) release any guarantor from any of its obligations under its
guaranty or the Indenture, except in accordance with the terms of such
Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
Indenture relating to subordination that adversely affects the rights of the
holders of the notes will require the consent of the holders of at least 75% in
aggregate principal amount of notes then outstanding.
Notwithstanding the preceding, without the consent of any holder of notes,
the issuer, the guarantors and the Trustee may amend or supplement either
Indenture or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated notes;
(3) to provide for the assumption of the issuer's obligations to
holders of notes in the case of a merger or consolidation or sale of all or
substantially all of the issuer's assets;
(4) to make any change that would provide any additional rights or
benefits to the holders of notes or that does not adversely affect the
legal rights under the Indenture of any such holder; or
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
(a) all notes that have been authenticated (except lost, stolen or
destroyed notes that have been replaced or paid and notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the issuer) have been delivered to the Trustee for
cancellation; or
(b) all notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable within
one year and the issuer or any guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely
for the benefit of such holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on such notes not delivered to
the Trustee for cancellation for principal, premium and liquidated
damages, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the issuer or any
guarantor is a party or by which the issuer or any guarantor is bound;
(3) the issuer or any guarantor has paid or caused to be paid all sums
payable by it under the Indenture; and
49
57
(4) the issuer has delivered irrevocable instructions to the Trustee
under the Indenture to apply the deposited money toward the payment of the
notes at maturity or the redemption date, as the case may be.
In addition, the issuer must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all applicable conditions
precedent to satisfaction and discharge have been satisfied.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of the issuer or any guarantor, the
Indenture limits its right 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 other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.
The holders of a majority in principal amount of the notes then outstanding
under the Indenture will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee,
subject to certain exceptions. The Indenture provides that in case an Event of
Default shall occur and be continuing, the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. 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 holder of notes, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
BOOK-ENTRY; DELIVERY AND FORM
The Global Notes
The exchange notes will be issued in the form of one or more global notes
in bearer form. The global notes will be deposited on the issue date with The
Depositary Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee of DTC, or will remain in the custody of the trustee pursuant to the
FAST Balance Certificate Agreement between DTC and the Trustee. Except as set
forth below, the global notes may be transferred in whole, and not in part,
solely to another nominee of DTC or a successor to DTC or its nominee. Ownership
of beneficial interests in the global notes will be limited to persons that have
accounts with DTC or persons that may hold interests through such participants.
All interests in the global notes may be subject to the procedures and
requirements of DTC and its direct and indirect participants, including
Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear), or
Clearstream Banking, societe anonyme ("Clearstream").
Certain Book-Entry Procedures for the Global Notes
The descriptions of the operations and procedures of DTC, Euroclear and
Clearstream set forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
we nor the Initial Purchasers take any responsibility for these operations or
procedures, and investors are urged to contact the relevant system or its
participants directly to discuss these matters.
DTC has advised us that it is (1) a limited purpose trust company organized
under the laws of the State of New York, (2) a "banking organization" within the
meaning of the New York Banking Law, (3) a member of the Federal Reserve System,
(4) a "clearing corporation" within the meaning of the Uniform Commercial Code,
as amended and (5) a "clearing agency" registered pursuant to Section 17A of the
Securities Exchange Act of 1934. DTC was created to hold securities for its
participants and facilitates the clearance and settlement of securities
transactions between participants through electronic book-entry changes to the
accounts of its participants, thereby eliminating the need for physical transfer
and delivery of certificates. DTC's participants include securities brokers and
dealers, including the Initial Purchasers, banks and trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system is
also
50
58
available to other entities such as banks, brokers, dealers and trust companies,
referred to as "indirect participants," that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Investors who are not participants may beneficially own securities held by or on
behalf of DTC only through participants or indirect participants.
Pursuant to procedures established by DTC, upon deposit of each of the
global notes, DTC will credit the accounts of participants designated by the
Initial Purchasers with an interest in the global notes. Ownership of the notes
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by DTC, with respect to the interests of
participants, and the records of participants and the indirect participants,
with respect to the interests of persons other than participants.
The laws of some jurisdictions may require that some types purchasers of
notes take physical delivery of the notes in definitive form. Accordingly, the
ability to transfer interests in the notes represented by a global note to these
persons may be limited. In addition, because DTC can act only on behalf of its
participants, who in turn act on behalf of persons who hold interests through
participants, the ability of a person having an interest in notes represented by
a global note to pledge or transfer the interest to persons or entities that do
not participate in DTC's system, or to otherwise take actions in respect of the
interest, may be affected by the lack of a physical definitive note in respect
of the interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
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 the 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 direction, instruction or approval to the trustee under the
Indenture. Accordingly, each holder owning a beneficial interest in a global
note must rely on the procedures of DTC and, if the holder is not a participant
or an indirect participant, on the procedures of the participant through which
the holder owns its interest, to exercise any rights of a holder of notes under
the Indenture or the global note.
We understand that under existing industry practice, in the event that we
request any action of holders of notes, or a holder that is an owner of a
beneficial interest in a global note desires to take any action that DTC, as the
holder of such global note, is entitled to take, DTC would authorize the
participants to take the action and the participants would authorize holders
owning through the participants to take the action or would otherwise act upon
the instruction of the holders. Neither we 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 DTC, or for maintaining, supervising or
reviewing any records of DTC relating to the notes.
Payments with respect to the principal of, and premium, if any, liquidated
damages, if any, and interest on, any notes represented by a global note
registered in the name of DTC or its nominee on the applicable record date will
be payable by the trustee to or at the direction of DTC or its nominee in its
capacity as the registered holder of the global note representing the notes
under the Indenture. Under the terms of the Indenture, we may treat, and the
trustee may treat, the persons in whose names the notes, including the global
notes, are registered as the owners of the notes for the purpose of receiving
payment on the notes and for any and all other purposes whatsoever. Accordingly,
neither we nor the trustee has or will have any responsibility or liability for
the payment of these amounts to owners of beneficial interests in the global
note, including principal, premium, if any, liquidated damages, if any, and
interest. Payments by the participants and the indirect participants to the
owners of beneficial interests in the global notes will be governed by standing
instructions and customary industry practice and will be the responsibility of
the participants or the indirect participants and DTC.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Clearstream will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
51
59
Subject to compliance with the transfer restrictions applicable to the
Notes, cross-market transfers between the participants in DTC, on the one hand,
and Euroclear or Clearstream participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of the system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global notes in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global note from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day, which must be a business day for Euroclear and
Clearstream, immediately following the settlement date of DTC. Cash received in
Euroclear or Clearstream as a result of the sale of an interest in a global note
by or through a Euroclear or Clearstream participant to a participant in DTC
will be received with value on the settlement date of DTC but will be available
in the relevant Euroclear or Clearstream cash account only as of the business
day for Euroclear or Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the global notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
Certificated Notes
If (1) we notify the trustee in writing that DTC, Euroclear or Clearstream
is no longer willing or able to act as a depositary or clearing system for the
notes or DTC ceases to be registered as a clearing agency under the Exchange
Act, and a successor depositary or clearing system is not appointed within 90
days of this notice or cessation, (2) we, at our option, notify the trustee in
writing that we elect to cause the issuance of notes in definitive form under
the Indenture or (3) upon the occurrence and continuation of an event of default
under the Indenture, then, upon surrender by DTC of the global notes,
certificated notes will be issued to each person that DTC identifies as the
beneficial owner of the notes represented by the global notes. Upon any such
issuance, the trustee is required to register the certificated notes in the name
of the person or persons or the nominee of any of these persons and cause the
same to be delivered to these persons.
Neither we nor the trustee shall be liable for any delay by DTC or any
participant or indirect participant in identifying the beneficial owners of the
related notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes, including with
respect to the registration and delivery, and the respective principal amounts,
of the notes to be issued.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified person:
(1) Indebtedness of any other person existing at the time such other
person is merged with or into or became a subsidiary of such specified
person, whether or not such Indebtedness is incurred in
52
60
connection with, or in contemplation of, such other person merging with or
into, or becoming a subsidiary of, such specified person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified person.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control,"
as used with respect to any person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales or leases in the ordinary course of business
consistent with past practices; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the issuer and its
subsidiaries taken as a whole will be governed by the provisions of the
Indenture described above under the caption "-- Repurchase at the Option of
Holders -- Change of Control" and/or the provisions described above under
the caption "-- Certain Covenants -- Merger, Consolidation or Sale of
Assets" and not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests by any of the issuer's Restricted
Subsidiaries or the sale of Equity Interests in any of its subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5.0 million;
(2) a transfer of assets between or among the issuer and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
issuer or to another Restricted Subsidiary;
(4) the sale, lease or license of property, plant, equipment,
inventory, accounts receivable or other assets in the ordinary course of
business;
(5) the sale or other disposition of cash or cash equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments;"
(7) the licensing of intellectual property; and
(8) sales of receivables and related assets (including contract
rights) of the type specified in the definition of "Qualified
Securitization Transaction" to a Securitization Entity for the fair market
value thereof, including consideration in the amount specified in the
proviso to the definition of Qualified Securitization Transaction.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
53
61
"board of directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other person, the board or committee of such
person serving a similar function.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing person.
"cash equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from the
date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thompson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Service and in each
case maturing within twelve months after the date of acquisition;
(6) money market funds at least 95% of the assets of which constitute
cash equivalents of the kinds described in clauses (1) through (5) of this
definition; and
(7) Indebtedness with a rating of "A" or higher from Standard & Poor's
Rating Service or "A-2" or higher from Moody's Investors Service, Inc.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the issuer and its Restricted Subsidiaries taken as
a whole to any "person" (as
54
62
that term is used in Section 13(d)(3) of the Exchange Act) other than a
Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the issuer;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than
50% of the Voting Stock of the issuer, measured by voting power rather than
number of shares;
(4) the first day on which a majority of the members of the board of
directors of the issuer are not Continuing Directors;
(5) the first day on which Parent ceases to own 100% of the
outstanding Equity Interests of the issuer; or
(6) the issuer consolidates with, or merges with or into, any person,
or any person consolidates with, or merges with or into, the issuer, in any
such event pursuant to a transaction in which any of the outstanding Voting
Stock of the issuer or such other person is converted into or exchanged for
cash, securities or other property, other than any such transaction where
the Voting Stock of the issuer outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee person constituting a
majority of the outstanding shares of such Voting Stock of such surviving
or transferee person (immediately after giving effect to such issuance).
"Consolidated Cash Flow" means, with respect to any specified person for
any period, the Consolidated Net Income of such person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such person or any of its subsidiaries in connection with an
Asset Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such person and
its subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such person and its subsidiaries
for such period, whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such person and its
subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a subsidiary of the issuer shall be added to
55
63
Consolidated Net Income to compute Consolidated Cash Flow of the issuer only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the issuer by such subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified person for
any period, the aggregate of the Net Income of such person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid in cash to the specified person or a Wholly Owned
Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) the cumulative effect of a change in accounting principles shall
be excluded; and
(5) the Net Income (but not loss) of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the Specified Person or one of
its subsidiaries.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the issuer who:
(1) was a member of such board of directors on the date of the
Indenture; or
(2) was nominated for election or elected to such board of directors
with the approval of a majority of the Continuing Directors who were
members of such board at the time of such nomination or election.
"Credit Agreement" means that certain Amended and Restated Credit
Agreement, dated as of March 19, 1999, by and among the issuer, Parent and
various direct and indirect wholly owned subsidiaries of Parent and Bank of
America National Trust and Savings Association as a lender and as agent, and
certain other lenders, providing for up to $1,150 million of aggregate
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Noncash Consideration" means any non-cash consideration (other
than non-cash consideration that would constitute a Restricted Investment)
received by the issuer or one of its Restricted Subsidiaries in connection with
an Asset Disposition that is so designated as Designated Noncash
56
64
Consideration pursuant to an Officers' Certificate executed by the principal
executive officer and the principal financial officer of the issuer or such
Restricted Subsidiary. Such Officers' Certificate shall state the basis of such
valuation, which shall be a report of a nationally recognized investment banking
firm with respect to the receipt in one or a series of related transactions of
Designated Noncash Consideration with a fair market value in excess of $5.0
million.
"Designated Preferred Stock" means preferred stock that is so designated as
Designated Preferred Stock, pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the issuer,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in clause 3(b) of the first paragraph of the covenant
described under the caption "-- Restricted Payments."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the issuer to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the issuer may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments."
"Domestic Restricted Subsidiary" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering by the issuer or Parent of shares of
its Common Stock (however designated and whether voting or non-voting) and any
and all rights, warrants or options to acquire such Common Stock; provided that,
in the event of any Equity Offering by Parent, Parent contributes to the common
equity capital of the Company (other than as Disqualified Stock) the net cash
proceeds of such Equity Offering.
"Existing Indebtedness" means the aggregate principal amount of
Indebtedness of the issuer and its subsidiaries (other than Indebtedness under
the Credit Agreement) in existence on the date of the Indenture, until such
amounts are repaid.
"Fixed Charges" means, with respect to any specified person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of
the effect of all payments made or received pursuant to Hedging
Obligations; plus
(2) the consolidated interest of such person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another person that is
guaranteed by such person or any one of its Restricted Subsidiaries or
secured by a Lien on assets of such person or any one of its Restricted
Subsidiaries, whether or not such guaranty or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such person or
any of its Restricted Subsidiaries, other than dividends on
57
65
Equity Interests payable solely in Equity Interests of the issuer (other
than Disqualified Stock) or to the issuer or a Restricted Subsidiary of the
issuer, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified person
and its Restricted Subsidiaries for any period, the ratio of the Consolidated
Cash Flow of such person for such period to the Fixed Charges of such person for
such period. In the event that the specified person or any of its Restricted
Subsidiaries incurs, assumes, guarantees, repays, repurchases or redeems any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated on a
pro forma basis in accordance with Regulation S-X under the Securities Act
(giving effect to any Pro Forma Cost Savings), but without giving effect to
clause (3) of the proviso set forth in the definition of Consolidated Net
Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect as of the Series A Original Issue Date.
"guaranty" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"guarantors" means each of:
(1) Parent; Universal Tool & Stamping Company Inc.; Dura Automotive
Systems Cable Operations, Inc.; Adwest Electronics, Inc.; Dura Automotive
Systems of Indiana, Inc.; Atwood Automotive Inc.; Mark I Molded Plastics of
Tennessee, Inc.; and Atwood Mobile Products, Inc.
(2) any other subsidiary that executes a guaranty in accordance with
the provisions of the Indenture; and their respective successors and
assigns.
58
66
"Hedging Obligations" means, with respect to any specified person, the
obligations of such person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such person
against fluctuations in interest rates and currency values.
"Indebtedness" means, with respect to any specified person, any
indebtedness of such person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) representing any Hedging Obligations, if and to the extent any of
the preceding items (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of the specified person
prepared in accordance with GAAP. In addition, the term "Indebtedness"
includes all Indebtedness of others secured by a Lien on any asset of the
specified person (whether or not such Indebtedness is assumed by the
specified person) and, to the extent not otherwise included, the guarantee
by the specified person of any indebtedness of any other person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Investments" means, with respect to any person, all direct or indirect
investments by such person in other persons (including Affiliates) in the forms
of loans (including guarantees or other obligations), advances or capital
contributions (excluding commissions, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the issuer
or any Restricted Subsidiary of the issuer sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the issuer
such that, after giving effect to any such sale or disposition, such person is
no longer a Restricted Subsidiary of the issuer, the issuer shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "-- Certain Covenants -- Restricted
Payments." The acquisition by the issuer or any Restricted Subsidiary of the
issuer of a person that holds an Investment in a third person shall be deemed to
be an Investment by the issuer or such Restricted Subsidiary in such third
person in an amount equal to the fair market value of the Investment held by the
acquired person in such third person in an amount determined as provided in the
final paragraph of the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature
59
67
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"liquidated damages" means all liquidated damages owing pursuant to the
registration rights agreement entered into on June 22, 2001 between the issuer,
the guarantors and the Initial Purchasers.
"Net Income" means, with respect to any specified person, the net income
(loss) of such person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such person or
any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the issuer or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts required to be applied to the repayment of
Indebtedness, other than under the Credit Agreement, secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Non-recourse Debt" means Indebtedness:
(1) as to which neither the issuer nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness of the issuer or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the issuer or any of
its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Business" means the business conducted by the issuer and its
Restricted Subsidiaries on the date hereof and businesses reasonably related
thereto.
"Permitted Investments" means:
(1) any Investment in the issuer or in a Restricted Subsidiary;
(2) any Investment in cash equivalents;
60
68
(3) any Investment by the Issuer or any Restricted Subsidiary of the
issuer in a person, if as a result of such Investment:
(a) such person becomes a Restricted Subsidiary of the issuer; or
(b) such person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated onto, the issuer or a Restricted Subsidiary of the issuer;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the issuer or Parent;
(6) Hedging Obligations;
(7) other Investments in any person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding not to exceed the greater of (x) $50.0 million and (y) 5.0% of
Total Assets;
(8) Investments existing on the date of the Indenture and any
amendment, modification, restatement, supplement, extension, renewal,
refunding, replacement, refinancing, in whole or in part, thereof;
(9) any Investment by the issuer or a subsidiary of the issuer in a
Securitization Entity or any Investment by a Securitization Entity in any
other person in connection with a Qualified Securitization Transaction;
provided that any Investment in a Securitization Entity is in the form of a
Purchase Money Note or any equity interest;
(10) Investments in Permitted Joint Ventures of up to $25.0 million
outstanding at any one time;
(11) Investments in Unrestricted Subsidiaries an amount at any one
time outstanding not to exceed $10.0 million; and
(12) Investments in securities of trade creditors or customers
received pursuant to a plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers.
"Permitted Joint Venture" means an entity characterized as a joint venture
(however structured) engaged in a Permitted Business and in which the issuer or
a Restricted Subsidiary (a) owns at least 20% of the ownership interest or (b)
has the right to receive at least 20% of the profits or distributions; provided
that such joint venture is not a subsidiary.
"Permitted Liens" means:
(1) Liens of the issuer and any guarantor securing Indebtedness and
other Obligations under Credit Facilities that were securing Senior Debt
that was permitted by the terms of the Indenture to be incurred;
(2) Liens in favor of the issuer or the guarantors;
(3) Liens on property of a person existing at the time such person is
merged with or into or consolidated with the issuer or any subsidiary of
the issuer; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the person merged into or consolidated with the
issuer or the subsidiary;
(4) Liens on property existing at the time of acquisition thereof by
the issuer or any subsidiary of the issuer, provided that such Liens were
in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
61
69
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant entitled
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of the Indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(9) Liens incurred in the ordinary course of business of the issuer or
any subsidiary of the issuer with respect to obligations that do not exceed
$5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(11) Liens on assets of a Restricted Subsidiary that is not a
Guarantor that secures Indebtedness (including Acquired Indebtedness)
incurred in compliance with the covenant described under "-- Limitation on
Foreign Indebtedness."
(12) judgment Liens not giving rise to an Event of Default;
(13) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
issuer or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(14) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods;
(15) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection
with a Qualified Securitization Transaction;
(16) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the issuer and its
Restricted Subsidiaries;
(17) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money).
(18) Liens imposed by law, such as carriers', warehouseman's and
mechanics' Liens in each case for sums not yet due or being contested in
good faith;
(19) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to the issuer or any guarantor to the extent such
Indebtedness is permitted to be incurred in accordance with the covenant
described under "-- Incurrence of Indebtedness and Issuance of Preferred
Stock";
(20) Liens securing Hedging Obligations as long as the related
Indebtedness is, and is permitted to be, under the Indenture to be secured
by a Lien on the same property securing the Hedging Obligations;
(21) Liens on specific items of inventory or other goods and proceeds
of any person securing such person's obligations with respect to bankers'
acceptances issued or created for the account of such person to facilitate
the purchase, shipment or storage of such inventory or other goods; and
(22) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the issuer and its
Restricted Subsidiaries in the ordinary course of business.
62
70
"Permitted Refinancing Indebtedness" means any Indebtedness of the issuer
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the issuer or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest thereon
and the amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
notes on terms at least as favorable to the Holders of notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the issuer or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means Onex DHC LLC, Alkin Co. and J2R Corporation.
"Pro Forma Cost Savings" means, with respect to any period, the reduction
in costs that occurred during the four-quarter period or after the end of the
four-quarter period and on or prior to the Transaction Date that were directly
attributable to an asset acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect as of the Series A Original Issue Date.
"Productive Assets" means assets that are used or useful in, or Capital
Stock of any person engaged in, a Permitted Business.
"Qualified Securitization Transaction" means any transaction or series of
transactions pursuant to which the issuer or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (a) a Securitization Entity (in the
case of a transfer by the Issuer or any of its Restricted Subsidiaries) and (b)
any other person (in case of a transfer by a Securitization Entity), or may
grant a security interest in, any accounts receivable or equipment (whether now
existing or arising or acquired in the future) of the issuer or any of its
Restricted Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable and equipment and
other assets (including contract rights and all guarantees or other obligations
in respect to such accounts receivable and equipment, proceeds of such accounts
receivable and equipment and other assets (including contract rights) which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable and equipment, all of the foregoing for the
purpose of providing working capital financing on terms that are more favorable
to the issuer and its Restricted Subsidiaries than would otherwise be available
at that time.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned subsidiary, or
immediate family member (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or persons beneficially
holding an 80% or more controlling interest of which consist of any one or
more Principals and/or such other persons referred to in the immediately
preceding clause (1).
63
71
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a person means any subsidiary of the referent
person that is not an Unrestricted Subsidiary.
"Securitization Entity" means a Wholly Owned Subsidiary of the issuer (or
another person in which the issuer or any subsidiary of the issuer makes an
Investment and to which the issuer or any subsidiary of the issuer transfers
accounts receivable or equipment and related assets) that engages in no
activities other than in connection with the financing of accounts receivable or
equipment and that is designated by the Board of Directors of the issuer (as
provided below) as a Securitization Entity (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the issuer or any other Restricted Subsidiary (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates the issuer or any Restricted Subsidiary in any way other than pursuant
to Standard Securitization Undertakings, (b) with which neither the issuer nor
any Restricted Subsidiary has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the issuer or such
Restricted Subsidiary than those that might be obtained at the time from persons
that are not Affiliates of the issuer, other than fees payable in the ordinary
course of business in connection with servicing receivables of such entity, and
(c) to which neither the issuer nor any Restricted Subsidiary has any obligation
to maintain or preserve such entity's financial condition or cause such entity
to achieve certain levels of operating results. Any such designation by the
board of directors shall be evidenced to each of the Trustees by filing with the
Trustees a certified copy of the resolution of the board of directors giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"Series A Original Issue Date" means April 22, 1999, the date of the
issuance of the issuer's outstanding Series A Senior Subordinated Notes due
2009.
"Significant Subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the issuer or any subsidiary of the
issuer that are reasonably customary in an accounts receivable or equipment
transactions.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such person or one or more of the
other subsidiaries of that person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such person or a subsidiary of such person or
(b) the only general partners of which are such person or one or more
subsidiaries of such person (or any combination thereof).
"Total Assets" means the total assets of the issuer and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, as
shown on the most recently available consolidated balance sheet of the issuer
and its Restricted Subsidiaries.
"Treasury Rate" means, as of any Redemption Date, the yield to maturity as
of such Redemption Date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to May 1, 2004;
64
72
provided, however, that if the period from the Redemption Date to May 1, 2004 is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Unrestricted Subsidiary" means any subsidiary of the issuer (other than
Dura UK Limited or any successor thereto) that is designated by the board of
directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt:
(2) is not party to any agreement, contract, arrangement or
understanding with the Issuer or any Restricted Subsidiary of the issuer
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the issuer or such Restricted
Subsidiary than those that might be obtained at the time from persons who
are not Affiliates of the issuer;
(3) is a person with respect to which neither the issuer nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such person's financial condition or to cause such person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the issuer or any of its Restricted
Subsidiaries.
Any designation of a subsidiary of the issuer as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the issuer as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," the issuer shall be in default of
such covenant. The board of directors of the issuer may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the issuer of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"Voting Stock" of any person as of any date means the Capital Stock of such
person that is at the time entitled to vote in the election of the board of
directors of such person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified person means a
Restricted Subsidiary of such person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such person or by one or more Wholly Owned
Restricted Subsidiaries of such person.
65
73
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following discussion summarizes the material U.S. federal income tax
aspects of the acquisition, ownership and disposition of the exchange notes.
This discussion is a summary for general information purposes and does not
consider all aspects of U.S. federal income taxation that may be relevant to the
ownership and disposition of the exchange notes by a holder in light of such
holder's personal circumstances. This discussion also does not address the U.S.
federal income tax consequences of ownership of exchange notes not held as
capital assets within the meaning of Section 1221 of the U.S. Internal Revenue
Code of 1986, as amended (the "Code"), or the U.S. federal income tax
consequences to a holder subject to special treatment under the U.S. federal
income tax laws, such as dealers in securities or foreign currency, tax-exempt
entities, financial institutions, insurance companies, regulated investment
companies, persons that hold the exchange notes as part of a "straddle," a
"hedge" or a "conversion transaction," persons that have a "functional currency"
other than the U.S. dollar, except as specifically described under "Non-U.S.
Holders," and investors in pass-through entities. Accordingly, these holders
should consult their respective tax advisors concerning the U.S. federal income
tax consequences of acquiring the exchange notes. In addition, this discussion
does not describe any tax consequences arising under U.S. federal gift and
estate taxes or out of the tax laws of any state, local or foreign jurisdiction.
This discussion is based upon the Code, existing Treasury regulations
thereunder, and current administrative rulings and court decisions. All of the
foregoing is subject to change, possibly on a retroactive basis, and any changes
could affect the continuing validity of this discussion.
This discussion deals only with beneficial owners who acquired exchange
notes in exchange for outstanding notes acquired at original issue. It does not
address some issues that are relevant to subsequent purchasers of outstanding
notes or exchange notes including, but not limited to, the treatment of market
discount for federal income tax purposes.
HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
APPLICATION OF FEDERAL INCOME TAX LAWS, AS WELL AS THE LAWS OF ANY STATE, LOCAL
OR FOREIGN TAXING JURISDICTION, TO THEIR PARTICULAR SITUATIONS.
U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a note that is:
- a citizen or resident (as defined in Section 7701(b)(1) of the Code) of
the United States;
- a corporation organized under the laws of the United States or any
political subdivision of the United States;
- an estate, the income of which is subject to U.S. federal income tax
regardless of the source; or
- a trust with respect to which a court within the United States is able to
exercise primary supervision over its administration and one or more
United States persons have the authority to control all of its
substantial decisions or if the trust was in existence on August 20, 1996
and has properly elected to continue to be treated as a U.S. person (a
"U.S. Holder").
Certain U.S. federal income tax consequences relevant to a holder other than a
U.S. Holder are discussed separately below.
Exchange Notes
Neither an exchange of the outstanding notes for exchange notes nor the
filing of any registration statement with respect to the resale of the notes
should be a taxable event to holders of notes, and holders should not recognize
any taxable gain or loss or any interest income as a result of such an exchange
or such a filing. An exchange note will have the same amount of market discount
or bond premium (if any) as the
66
74
outstanding note exchanged therefor, and any elections with respect to such
market discount or bond premium made by the exchanging holder will remain in
effect.
The issuer is obligated to pay additional interest to the holders of
outstanding series C notes under certain circumstances described under "Exchange
Offer -- Purpose of the Exchange Offer" above. Although the matter is not free
from doubt, this additional interest should be taxable as ordinary income at the
time it accrues or is received in accordance with the U.S. Holder's regular
method of accounting for federal income tax purposes. It is possible, however,
that the IRS may take a different position, in which case the timing and amount
of income inclusion may be different from that described above. U.S. Holders
should consult their own tax advisors about payments of additional interest.
Stated Interest
Stated interest on an outstanding note or an exchange note should be
taxable to a U.S. Holder as ordinary interest income at the time it accrues or
is received in accordance with such U.S. Holder's method of accounting for U.S.
federal income tax purposes, unless there is original issue discount, or OID, on
the exchange notes received in exchange for outstanding series C notes (as
discussed in the next paragraph), in which case a portion of each payment of
stated interest would have to be accounted for as OID. The outstanding series C
notes were sold with accrued interest from May 1, 2001 ("pre-issuance
interest"). For federal income tax purposes the amount paid by a purchaser of
the outstanding series C notes representing the amount of the pre-issuance
interest is excluded from the issue price of the note. The portion of the first
payment on the outstanding series C notes equal to the amount of the
pre-issuance interest is not includable in income, but is treated as a return of
the amount paid for the pre-issuance interest.
We intend to take the position that the outstanding series C notes were not
issued with original issue discount, and therefore that any exchange notes
received in exchange for outstanding series C notes do not have OID. However,
the IRS may take a contrary position. We have not obtained an IRS ruling or an
opinion of counsel regarding the tax treatment of the outstanding series C
notes. If the outstanding series C notes were deemed by the IRS to be issued
with original issue discount, such OID would be equal to the difference between
their issue price and their stated redemption price at maturity (as defined
below). The "issue price" of the outstanding series C notes is the first price
at which a substantial amount of the notes is sold for money, excluding sales to
underwriters, placement agents or wholesalers. The "stated redemption price at
maturity" of the outstanding series C notes is the amount payable at maturity
(other than qualified stated interest). The IRS may take a position that the
delayed draw special payment constitutes a reduction in the issue price of the
outstanding series C notes rather than a commitment fee, and, accordingly, that
the outstanding series C notes were issued with OID in an amount equal to the
sum of the delayed draw special payment and the 1.75% stated discount. However,
if the treatment of the delayed draw special payment as a commitment fee is
respected, holders of exchange notes received in exchange for outstanding series
C notes will not be required to include any OID in gross income for U.S. federal
income tax purposes as a consequence of the issuance of the outstanding series C
notes at an approximately 1.75% discount from their principal amount because the
amount of OID created by such discount will not exceed the de minimis threshold
as determined under Section 1273(a)(3) of the Code and thus will be treated as
zero.
Generally, if the outstanding series C notes or any exchange notes received
in exchange therefor were treated as being issued with OID, U.S. Holders would
be required to include the OID in ordinary income for U.S. federal income tax
purposes as it accrues. The OID would accrue daily in accordance with a constant
yield method based on a compounding of interest. The OID allocable to any
accrual period would equal the product of the adjusted issue price of the notes
as of the beginning of such period and the notes' yield to maturity, less any
qualified stated interest allocable to that accrual period. The "adjusted issue
price" of the notes as of the beginning of any accrual period would equal the
issue price of the notes increased by OID, if any, previously includable in
income and decreased by any payments under the notes (other than qualified
stated interest). Because OID would accrue and be includable in income at least
annually and no payments other than qualified stated interest would be made
under the notes, the adjusted issue price of the notes would increase throughout
their life if the notes were deemed issued with OID. OID includable in income,
if any, would therefore increase during each accrual period.
67
75
Sale, Exchange or Redemption of the Notes
Upon the disposition of an outstanding note or an exchange note by sale,
exchange or redemption, a U.S. Holder will generally recognize gain or loss
equal to the difference between the amount realized on the disposition, other
than amounts attributable to accrued interest not yet taken into income which
will be taxed as ordinary income, and the U.S. Holder's tax basis in the note. A
U.S. Holder's adjusted tax basis in a note generally will equal the cost of the
note to such holder, including the amount paid for pre-issuance interest, plus
OID previously accrued on the note, if any, less the amount of pre-issuance
interest received and any principal payments received by such holder.
Assuming the note is held as a capital asset, such gain or loss, except to
the extent that the market discount rules otherwise provide, will generally
constitute capital gain or loss and will be long-term capital gain (which is
taxed, in the case of non-corporate taxpayers, at a maximum statutory rate of
20%) or loss if the U.S. Holder has held such note for longer than 12 months.
The deductibility of capital losses is subject to limitations.
Backup Withholding and Information Reporting
Under the Code, a U.S. Holder of an outstanding note or an exchange note
may be subject, under certain circumstances, to information reporting and/or
backup withholding at a 31% rate with respect to cash payments in respect of
interest on, or the gross proceeds from disposition of, a note. This withholding
applies only if a U.S. Holder:
- fails to furnish its social security or other taxpayer identification
number ("TIN") within a reasonable time after a request therefor;
- furnishes an incorrect TIN;
- fails to report interest or dividends properly; or
- fails, under certain circumstances, to provide a certified statement,
signed under penalty of perjury, that the TIN provided is its correct
number and that it is not subject to backup withholding.
Any amount withheld from a payment to a U.S. Holder under the backup
withholding rules is allowable as a credit, and may entitle such holder to a
refund, against such holder's U.S. federal income tax liability, provided that
the required information is furnished to the IRS. Certain persons are exempt
from backup withholding, including corporations and financial institutions.
Holders of notes should consult their tax advisors as to their qualification for
exemption from withholding and the procedure for obtaining such exemption.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of an outstanding note or an exchange note
(each referred to in this discussion as a "note") that is not a U.S. Holder (a
"Non-U.S. Holder").
This discussion does not address all aspects of U.S. federal income
taxation that may be relevant to the ownership or disposition of the notes by
any particular Non-U.S. Holder in light of such holder's personal circumstances,
including holding the notes through a partnership. For example, persons who are
partners in foreign partnerships or beneficiaries of foreign trusts or estates
and who are subject to U.S. federal income tax because of their own status, such
as U.S. residence or foreign persons engaged in a trade or business in the
United States, may be subject to U.S. federal income tax even though the entity
is not subject to income tax on disposition of its note.
For purposes of the following discussion, interest and gain on the sale,
exchange or other disposition of the note will be considered "U.S. trade or
business income" if such income or gain is effectively connected with the
conduct of a U.S. trade or business, or in the case of an applicable income tax
treaty between the
68
76
United States and the country of which the holder is a qualified resident,
attributable to a U.S. permanent establishment (or to a fixed base) in the
United States.
Stated Interest
Generally, any interest paid to a Non-U.S. Holder of a note that is not
U.S. trade or business income will not be subject to U.S. federal income tax if
the interest qualifies as "portfolio interest." Interest on the notes will
qualify as portfolio interest if:
- the Non-U.S. Holder does not actually or constructively own 10% or more
of the total combined voting power of our voting stock, and is not a
"controlled foreign corporation" with respect to which the issuer is a
"related person" within the meaning of Section 881(c)(3)(C) of the Code;
and
- the beneficial owner, under penalties of perjury, certifies that the
beneficial owner is not a U.S. person and such certificate provides the
beneficial owner's name and address.
The gross amount of payments to a Non-U.S. Holder of interest that does not
qualify for the portfolio interest exception and that is not U.S. trade or
business income will be subject to U.S. withholding tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding. U.S.
trade or business income will be taxed at regular U.S. federal income tax rates
rather than the 30% gross rate. To claim the benefit of a tax treaty or to claim
exemption from withholding because the income is U.S. trade or business income,
the Non-U.S. Holder must provide a properly executed Form W-8BEN or W-8ECI, or
such successor forms as the IRS designates, as applicable, prior to payment of
interest. These forms must be periodically updated. A Non-U.S. Holder who is
claiming the benefits of a tax treaty may be required to obtain a U.S. TIN and
to provide certain documentary evidence issued by foreign governmental
authorities to prove residence in the foreign country.
Sale, Exchange or Redemption of the Notes
Subject to the discussion concerning backup withholding, any gain realized
by a Non-U.S. Holder on the sale, exchange or redemption of a note generally
will not be subject to U.S. federal income tax unless such gain is U.S. trade or
business income, or, subject to certain exceptions, the Non-U.S. Holder is an
individual who holds the note as a capital asset and is present in the United
States for 183 days or more in the taxable year of the disposition.
Information Reporting and Backup Withholding
The issuer must report annually to the IRS and to each Non-U.S. Holder any
interest that is subject to U.S. withholding tax or that is exempt from
withholding pursuant to a tax treaty or the portfolio interest exception. Copies
of these information returns may also be made available under the provisions of
a specific treaty or agreement to the tax authorities of the country in which
the Non-U.S. Holder resides.
Backup withholding and information reporting will not apply to payments of
principal on the notes by the issuer to a Non-U.S. Holder, if the holder
certifies as to its non-U.S. status under penalties of perjury or otherwise
establishes an exemption, provided that neither the issuer nor its paying agent
has actual knowledge that the holder is a U.S. Holder or that the conditions of
any other exemption are not, in fact, satisfied.
Payments of the proceeds from the sale of the notes to or through a foreign
office or broker will not be subject to information reporting or backup
withholding unless the broker is (1) a United States person, (2) a foreign
person that derives 50% or 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, (3) a controlled foreign corporation for United
States federal income tax purposes or (4) a foreign partnership more than 50% of
the capital or profits of which is owned by one or more U.S. persons or which
engages in a U.S. trade or business. Payment of the proceeds of any such sale
effected outside the United States by a foreign office of any broker that is
described in (1), (2), (3), or (4) of the preceding sentence may be subject to
backup withholding tax, and will be subject to information reporting
requirements unless such broker has documentary evidence in its records that the
beneficial owner is a non-U.S. Holder and certain other
69
77
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 broker has documentary evidence in its files that the
owner is a Non-U.S. Holder and the broker has no knowledge to the contrary.
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
70
78
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such securities were acquired as a result
of market-making activities or other trading activities. We have agreed that,
starting on the expiration date of the exchange offer and ending on the close of
business on the 180th day after the expiration date, we will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale.
We will not receive any proceeds from any sale of exchange notes by
brokers-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer,
including the expenses of one counsel for the holders of the outstanding notes,
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the outstanding notes, including any broker-dealers,
against certain liabilities, including liabilities under the Securities Act.
Prior to the exchange offer, there has not been any public market for the
outstanding series C notes. The outstanding series C notes have not been
registered under the Securities Act and will be subject to restrictions on
transferability to the extent that they are not exchanged for exchange notes by
holders who are entitled to participate in this exchange offer. The holders of
outstanding series C notes, other than any holder that is our affiliate within
the meaning of Rule 405 under the Securities Act, who are not eligible to
participate in the exchange offer are entitled to certain registration rights,
and we are required to file a shelf registration statement with respect to those
outstanding series C notes.
The exchange notes will constitute a new issue of securities with no
established trading market. We do not intend to list the exchange notes on any
national securities exchange or to seek the admission thereof to trading in the
National Association of Securities Dealers Automated Quotation System. In
addition, such market making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the exchange
offer and the pendency of the shelf registration statements. Accordingly, no
assurance can be given that an active public or other market will develop for
the exchange notes or as to the liquidity of the trading market for the exchange
notes. If a trading market does not develop or is not maintained, holders of the
exchange notes may experience difficulty in reselling the exchange notes or may
be unable to sell them at all. If a market for the exchange notes develops, any
such market may be discontinued at any time.
71
79
LEGAL MATTERS
The validity of the exchange notes and the guarantees and other legal
matters, including the tax-free nature of the exchange, will be passed upon on
our behalf of the by Kirkland & Ellis (a partnership that includes professional
corporations), Chicago, Illinois.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of Dura Automotive Systems, Inc. as
of December 31, 2000 and 1999 and for each of the three years in the period
ended December 31, 2000 incorporated by reference in this prospectus to the
extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in its reports
thereon, incorporated herein by reference, and are incorporated by reference in
reliance upon the authority of said firm as an expert in auditing and accounting
in giving said reports.
The consolidated financial statements of Excel Industries, Inc. as of and
for the year ended January 2, 1999 incorporated by reference in this prospectus
to the extent and for the period indicated in their report have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in its report
therein, incorporated herein by reference, and are incorporated by reference in
reliance upon the authority of said firm as an expert in auditing and accounting
in giving said report.
The consolidated financial statements of Adwest Automotive Plc as of and
for the fiscal year ended June 30, 1998 incorporated by reference in this
prospectus were audited by KPMG Audit Plc, independent certified public
accountants. Such financial statements have been incorporated by reference in
reliance upon the report of KPMG Audit Plc.
GENERAL INFORMATION
We intend to apply to list the exchange notes on the Luxembourg Stock
Exchange. In connection with the listing application and if the application is
to be approved, the Certificate of Incorporation and the By-Laws of the Issuer
and a legal notice relating to the issuance of the exchange notes will be
deposited prior to listing with the Geffier en Chef du Tribunal d'Arrondissement
de at a Luxembourg, where copies thereof may be obtained upon request. Copies of
the above documents together with this prospectus, the exchange notes, the
guarantees and the indenture and Dura's Annual Report on Form 10-K for the year
ended December 31, 2000, Dura's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001, as well as all Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed by Dura since
December 31, 2000, so long as any of the exchange notes are outstanding, will be
made available for inspection at the main office of Kredietbank S.A.
Luxembourgeoise Societe Anonyme, which will act as intermediary between the
Luxembourg Stock Exchange and Dura and the holders of the exchange notes. We
will publish annual audited consolidated financial statements and unaudited
quarterly financial statements for each of the first three fiscal quarters of
each year. In addition, copies of the Annual Reports, Quarterly Reports and
Current Reports of Dura may be obtained free of charge at such office.
Except as may be disclosed herein (including the documents incorporated by
reference), there has been no material adverse change in the financial or
trading position of Dura since December 31, 2000.
Except as may be disclosed in the documents incorporated by reference, Dura
is not a party to any legal or arbitration proceedings (including any that are
pending or threatened) which may have or have had during the previous 12 months
a significant effect on Dura's consolidated financial position.
Resolutions relating to the issuance and sale of the exchange notes were
adopted by the boards of directors of the issuer and each of the guarantors on
June 6, 2001 and June 7, 2001.
The exchange notes, the indenture and the guarantees are governed by, and
shall be construed in accordance with, the laws of the State of New York, United
States of America.
72
80
The issuer was incorporated on November 13, 1990 in the State of Delaware.
The issued and outstanding capital stock of the issuer consists of 1,000 shares
of common stock, all of which are fully paid.
73
81
PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER
DURA OPERATING CORP.
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
INDEPENDENT AUDITORS
ARTHUR ANDERSEN LLP
45 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
LEGAL ADVISERS
KIRKLAND & ELLIS
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
TRUSTEE, REGISTRAR, PRINCIPAL PAYING,
TRANSFER AND EXCHANGE AGENT
U.S. BANK TRUST NATIONAL ASSOCIATION
180 E. 5(TH) STREET
ST. PAUL, MINNESOTA 55101
LISTING AGENT AND LUXEMBOURG PAYING,
TRANSFER AND EXCHANGE AGENT
KREDIETBANK S.A. LUXEMBOURGEOISE SOCIETE ANONYME
43, BOULEVARD ROYAL L-2955
LUXEMBOURG R.C. LUXEMBOURG B 6395
82
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[DURA LOGO]
DURA OPERATING CORP.
EXCHANGE OFFER FOR
$300,000,000
SERIES B 9% SENIOR SUBORDINATED NOTES DUE 2009
AND
$158,500,000
SERIES C 9% SENIOR SUBORDINATED NOTES DUE 2009
Unconditionally Guaranteed on a Senior Subordinated Basis by DURA AUTOMOTIVE
SYSTEMS, INC.
------------------------------
PROSPECTUS
, 2001
------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
83
PART II:
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Dura Automotive Systems, Inc.; Dura Operating Corp.; Adwest Electronics,
Inc.; and Dura Automotive Cable Operations, Inc. Dura Automotive Systems, Inc.
is incorporated under the laws of the State of Delaware. Section 145 of the
General Corporation Law of the State of Delaware ("Section 145") provides that a
Delaware corporation may indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was illegal. A
Delaware corporation may indemnify any persons who are, or are threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reason of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorney's fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
Article Eleven of the Restated Certificate of Incorporation of Dura
provides that no director of the corporation shall be liable to the corporation
or its stockholders for monetary damages arising from a breach of fiduciary duty
owed to the corporation or its stockholders to the fullest extent permitted by
the Delaware General Corporation Law.
Article V of Dura's Amended and Restated By-Laws (the "Dura By-laws")
provides that each person who was or is made a party or is threatened to be made
a party to or is otherwise involved (including involvement as a witness) in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director or
officer of the corporation, is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan, whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that, except as provided below with respect
to proceedings to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification is a contract
right and includes the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition
(advancement of expenses); provided, however, that, if and to the extent that
the Delaware General Corporation Law requires, an advancement of expenses
incurred by an indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an employee benefit plan)
II-1
84
shall be made only upon delivery to the corporation of an undertaking by or on
behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal than such indemnitee is not entitled to be indemnified
for such expenses.
Article V of the Dura By-laws further provides that any person serving as a
director, officer, employee or agent of a subsidiary of Dura shall be
conclusively presumed to be serving in such capacity at the request of Dura and,
hence subject to indemnification by Dura.
Article V of the Dura By-laws further provides that persons who after the
date of the adoption of Article V become or remain directors or officers of the
corporation or who, while a director or officer of the corporation, become or
remain a director, officer, employee or agent of a subsidiary, shall be
conclusively presumed to have relied on the rights to indemnify, advancement of
expenses and other rights contained in Article V in entering into or continuing
such service. The rights to indemnification and to the advancement of expenses
conferred in Article V shall apply to claims made against a indemnitee arising
out of acts or omissions which occurred or occur both prior and subsequent to
the adoption hereof. The rights to indemnification and to the advancement of
expenses conferred in Article V shall not be exclusive of any other right which
any person may have or hereafter acquire under the Amended and Restated
Certificate of Incorporation or under any statute, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
All of the directors and officers of Dura are covered by insurance policies
maintained and held in effect by such corporation against certain liabilities
for actions taken in such capacities, including liabilities under the Securities
Act of 1933.
Dura Operating Corp., Adwest Electronics, Inc. and Dura Automotive Systems
Cable Operations, Inc. are also incorporated under the General Corporation Law
of the State of Delaware. Under their respective charter documents, each
corporation has agreed to indemnify their officers and directors to the fullest
extent authorized by the Delaware General Corporation Law.
In addition, the bylaws of Adwest Electronics, Inc. provide that a director
of the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived any improper personal benefit.
Atwood Automotive, Inc. Each director and officer of the corporation shall
be indemnified by the corporation against all expenses in connection with any
claim (civil, criminal or otherwise, including appeals) in which he or she may
become involved due to his or her position with the corporation. Where such
cases proceed to final adjudication, indemnification shall not be allowed for
such directors found liable for negligence or misconduct in performance of
duties to the corporation. Neither a judgment of conviction or the entry of any
plea in a criminal case shall of itself be deemed an adjudication that such
individual was liable of negligence or misconduct if the individual acted in
good faith, for a purpose believed to be in the best interest of the corporation
and had no reasonable cause to believe the conduct was unlawful. The rights
contained in the bylaws of Atwood Automotive, Inc. shall not be deemed exclusive
of other rights to which the individual is entitled.
Atwood Mobile Products, Inc. The corporation shall indemnify any person
who was or is a party, or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that such person is or
was a director or officer of the corporation, or is or was serving another
organization or entity (whether for profit or not) at the
II-2
85
corporation's request. Such indemnification shall be to the fullest extent, and
shall be determined in such manner, as now or hereafter permitted by law. The
indemnification shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators. No director of the corporation shall be personally
liable to the corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law, (iii) under Section 8.65 of the
Illinois Business Corporation Act, or (iv) for any transaction from which the
director derived an improper personal benefit. The corporation may, by action of
its board of directors, indemnify its employees and agents to the same extent as
the indemnification of its directors and officers. Notwithstanding the
foregoing, the indemnification and advancement of expenses provided by or
granted under the Illinois Business Corporation Act shall not be considered
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled to under the articles of incorporation,
by-laws, insurance, or a contractual agreement.
Dura Automotive Systems of Indiana, Inc. and Universal Tool & Stamping
Company, Inc. A corporation may indemnify an individual who was or is a
director made party to a proceeding if the individual's conduct was in good
faith and the individual reasonably believed that the individual's conduct was
in the corporation's best interest or not opposed to its best interest. For
indemnification in a criminal proceeding, the individual must either: had
reasonable cause to believe the conduct was lawful or no reasonable cause to
believe it was unlawful. In respect to an employee benefit plan, a director's
conduct believed to be in the best interest of the participants and
beneficiaries of the plan is enough to exercise the indemnification protection.
The corporation shall indemnify a director who was wholly successful in the
defense of a proceeding to which the director was party because of his position
as director. A director may apply for indemnification from the court. The court
must determine if: (1) if the director is entitled to mandatory indemnification
as noted above or (2) the director is fairly and reasonably entitled to
indemnification in view of all relevant circumstances. The corporation shall
have the power to purchase and maintain insurance for above said person for
liability from actions regardless of the corporation's power to indemnify said
person under this provision. This provision shall not be deemed exclusive and
those seeking indemnification may be entitled to indemnification under any
articles of incorporation, by-laws, resolution by board of directors or
shareholders, or any other authorization by a majority vote of the voting
shares.
Mark I Molded Plastics of Tennessee, Inc. Subject to certain exceptions
described below, a corporation may indemnify an individual made a party to a
proceeding because the individual is or was a director against liability
incurred in the proceeding if: (i) the individual's conduct was in good faith;
and (ii) the individual reasonably believed: (a) In the case of conduct in the
individual's official capacity with the corporation, that the individual's
conduct was in its best interest; and (b) in all other cases, that the
individual's conduct was at least not opposed to its best interests; and (iii)
in the case of any criminal proceeding, the individual had no reasonable cause
to believe the individual's conduct was unlawful. A corporation may not
indemnify a director under: (i) in connection with a proceeding by or in the
right of the corporation in which the director was adjudged liable to the
corporation; or (ii) in connection with any other proceeding charging improper
personal benefit to the director, whether or not involving action in the
director's official capacity, in which the director was adjudged liable on the
basis that personal benefit was improperly received by the director. Unless
limited by its charter, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which the director was a party because the director is or was a director of the
corporation against reasonable expenses incurred by the director in connection
with the proceeding. A corporation may not indemnify a director unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the relevant standard of conduct. The determination shall be
made: (i) by the board of directors by majority vote of a quorum consisting of
directors not at the time parties to the proceeding; (ii) if a quorum cannot be
obtained under subdivision (b)(i), by majority vote of a committee duly
designated by the board of directors (in which designation directors who are
parties may participate), consisting solely of two (2) or more directors not at
the time parties to the proceeding; (iii) by independent special legal counsel;
or
II-3
86
by the shareholders, but shares owned by or voted under the control of directors
who are at the time parties to the proceeding may not be voted on the
determination.
ITEM 21. EXHIBITS.
(a) The following exhibits are filed as part of the Registration Statement
or incorporated by reference herein:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Purchase Agreement, dated June 8, 2001, among Dura Operating
Corp., Dura Automotive Systems, Inc., the subsidiary
guarantors named therein (the "Subsidiary Guarantors") and
Banc of America Securities LLC, Credit Suisse First Boston
Corporation and J.P. Morgan Securities Inc. (collectively,
the "Initial Purchasers").*
3.1 Restated Certificate of Incorporation of Dura Automotive
Systems, Inc. incorporated by reference to Exhibit 3.1 of
the Registration Statement on Form S-4 (Registration No.
33381213) (the "S-4").
3.2 Amendment and Restated By-laws of Dura Automotive Systems,
Inc. incorporated by reference to Exhibit 3.2 of the
Registration Statement on Form S-1 (Registration No.
333-06601) (the "S-1").
3.3 Certificate of Incorporation of Dura Operating Corp.
incorporated by reference to Exhibit 3.3 of the S-4.
3.4 By-laws of Dura Operating Corp. incorporated by reference to
Exhibit 3.4 of the S-4.
3.5 Certificate of Incorporation of Universal Tool and Stamping
Company, Inc. incorporated by reference to Exhibit 3.7 of
the S-4.
3.6 By-laws of Universal Tool & Stamping Inc. incorporated by
reference to Exhibit 3.8 of the S-4.
3.7 Certificate of Incorporation of Dura Automotive Systems
Cable Operations, Inc. incorporated by reference to Exhibit
3.9 of the S-4.
3.8 By-laws of Dura Automotive Systems Cable Operations, Inc.
incorporated by reference to Exhibit 3.10 of the S-4.
3.9 Certificate of Incorporation of Adwest Electronics, Inc.
incorporated by reference to Exhibit 3.11 of the S-4.
3.10 By-laws of Adwest Electronics, Inc. incorporated by
reference to Exhibit 3.12 of the S-4.
3.11 Certificate of Incorporation of Dura Automotive Systems of
Indiana, Inc. incorporated by reference to Exhibit 3.19 of
the S-4.
3.12 By-laws of Dura Automotive Systems of Indiana, Inc.
incorporated by reference to Exhibit 3.20 of the S-4.
3.13 Certificate of Incorporation of Atwood Automotive, Inc.
incorporated by reference to Exhibit 3.27 of the S-4.
3.14 By-laws of Atwood Automotive, Inc. incorporated by reference
to Exhibit 3.28 of the S-4.
3.15 Certificate of Incorporation of Mark I Molded Plastics of
Tennessee, Inc. incorporated by reference to Exhibit 3.31 of
the S-4.
3.16 By-laws of Mark I Molded Plastics of Tennessee, Inc.
incorporated by reference to Exhibit 3.32 of the S-4.
3.17 Restated Articles of Incorporation of Atwood Mobile
Products, Inc.*
3.18 By-laws of Atwood Mobile Products, Inc.*
4.1 Indenture, dated April 22, 1999, between Dura Operating
Corp., Dura Automotive Systems, Inc., the Subsidiary
Guarantors and U.S. Bank Trust National Association, as
trustee, incorporated by reference to Exhibit 4.7 of the
S-4.
II-4
87
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.2 Supplemental Indenture, dated July 29, 1999 between Dura
Operating Corp., Dura Automotive Systems, Inc., the
Subsidiary Guarantors, and U.S. Bank Trust National
Association, as trustee, incorporated by reference to
Exhibit 4.1 of the report filed on Form 10-Q dated August
16, 1999.
4.3 Second Supplemental Indenture, dated June 22, 2001, between
Dura Operating Corp., Dura Automotive Systems, Inc., the
Guaranteeing Subsidiary, the Original Guarantors and U.S.
Bank Trust National Association, as trustee.*
4.4 Indenture, dated June 22, 2001, between Dura Operating
Corp., Dura Automotive Systems, Inc., the Guarantors and
U.S. Bank Trust National Association, as trustee, relating
to the Notes.*
4.5 Registration Rights Agreement, dated June 22, 2001, between
the Initial Purchasers and Dura Operating Corp., Dura
Automotive Systems, Inc. and the Guarantors.*
5.1 Opinion of Kirkland & Ellis regarding the validity of the
securities offered hereby.**
8.1 Opinion of Kirkland & Ellis regarding federal income tax
considerations.*
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges.*
23.1 Consent of Arthur Andersen LLP, Minneapolis, Minnesota.*
23.2 Consent of KPMG Audit Plc.*
23.3 Consents of Kirkland & Ellis (included in Exhibits 5.1 and
8.1).*
24.1 Powers of Attorney.*
25.1 Statement of Eligibility of Trustee on Form T-1 under the
Trust Indenture Act of 1939 of U.S. Bank Trust National
Association.*
99.1 Form of Letter of Transmittal for the Notes.*
99.2 Form of Notice of Guaranteed Delivery for the Notes.*
99.3 Form of Tender Instructions for the Notes.*
- -------------------------
* Filed herewith.
** To be filed by amendment.
(b) No financial statement schedules are required to be filed herewith
pursuant to this Item.
ITEM 22. UNDERTAKINGS
(a) 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 provisions described in Item 20, 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 directors, 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.
(b) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as a part of this
Registration Statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this registration
statement as of the time it was declared effective.
(c) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities
II-5
88
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) The undersigned hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the date of the registration statement through the date of
responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and Dura
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
(f) 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. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) under the Securities
Act of 1933 if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (f)(i) and (f)(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 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.
(g) 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.
II-6
89
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Operating
Corp. has duly caused this registration statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Rochester Hills, State of Michigan, on the 19th day of July, 2001.
DURA OPERATING CORP.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
Vice President, Chief Financial
Officer and
Assistant Secretary (principal
financial and
accounting officer); Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
* Chairman of the Board
- --------------------------------------------------------
S.A. Johnson
* President and Chief Executive Officer
- -------------------------------------------------------- (principal executive officer); Director
Karl F. Storrie
/s/ DAVID R. BOVEE Vice President, Chief Financial Officer and
- -------------------------------------------------------- Assistant Secretary (principal financial
David R. Bovee and accounting officer); Director
* Director
- --------------------------------------------------------
Robert E. Brooker, Jr.
* Director
- --------------------------------------------------------
Jack K. Edwards
* Director
- --------------------------------------------------------
James O. Futterknecht, Jr.
* Director
- --------------------------------------------------------
J. Richard Jones
* Director
- --------------------------------------------------------
William L. Orscheln
* Director
- --------------------------------------------------------
John C. Jorgensen
II-7
90
SIGNATURE TITLE
--------- -----
* Director
- --------------------------------------------------------
Eric J. Rosen
* Director
- --------------------------------------------------------
Ralph R. Whitney, Jr.
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-8
91
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems, Inc. has duly caused this registration statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
Vice President, Chief Financial
Officer and
Assistant Secretary (principal
financial and
accounting officer); Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
* Chairman of the Board
- --------------------------------------------------------
S.A. Johnson
* President and Chief Executive Officer
- -------------------------------------------------------- (principal executive officer); Director
Karl F. Storrie
/s/ DAVID R. BOVEE Vice President, Chief Financial Officer and
- -------------------------------------------------------- Assistant Secretary (principal financial
David R. Bovee and accounting officer); Director
* Director
- --------------------------------------------------------
Robert E. Brooker, Jr.
* Director
- --------------------------------------------------------
Jack K. Edwards
* Director
- --------------------------------------------------------
James O. Futterknecht, Jr.
* Director
- --------------------------------------------------------
J. Richard Jones
* Director
- --------------------------------------------------------
William L. Orscheln
II-9
92
SIGNATURE TITLE
--------- -----
* Director
- --------------------------------------------------------
John C. Jorgensen
* Director
- --------------------------------------------------------
Eric J. Rosen
* Director
- --------------------------------------------------------
Ralph R. Whitney, Jr.
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-10
93
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems Cable Operations, Inc. has duly caused this registration statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rochester Hills, State of Michigan, on the 19th day
of July, 2001.
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-11
94
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems of Indiana, Inc. has duly caused this registration statement on Form S-4
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
DURA AUTOMOTIVE SYSTEMS OF
INDIANA, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Signature
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-12
95
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Adwest
Electronics, Inc. has duly caused this registration statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
ADWEST ELECTRONICS, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-13
96
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Atwood
Automotive, Inc. has duly caused this registration statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
ATWOOD AUTOMOTIVE, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-14
97
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Atwood Mobile
Products, Inc. has duly caused this registration statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
ATWOOD MOBILE PRODUCTS, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-15
98
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mark I Molded
Plastics of Tennessee, Inc. has duly caused this registration statement on Form
S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
MARK I MOLDED PLASTICS OF
TENNESSEE, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-16
99
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Universal Tool
& Stamping Company, Inc. has duly caused this registration statement on Form S-4
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Rochester Hills, State of Michigan, on the 19th day of July, 2001.
UNIVERSAL TOOL & STAMPING
COMPANY, INC.
By: /s/ DAVID R. BOVEE
------------------------------------
David R. Bovee
President, Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 2001.
SIGNATURE TITLE
--------- -----
/s/ DAVID R. BOVEE President, Chief Financial Officer and
- -------------------------------------------------------- Treasurer (principal executive officer)
David R. Bovee (principal financial and accounting
officer); Director
* Assistant Secretary; Director
- --------------------------------------------------------
Brian Ghesquiere
By: /s/ DAVID R. BOVEE
----------------------------------------------------
David R. Bovee
Attorney in Fact
- ---------------
* The undersigned by signing his or her name hereto, does sign and execute this
registration statement pursuant to the Power Attorney executed by the
above-named officers and directors of the registrant and previously filed with
the Commission.
II-17
100
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Purchase Agreement, dated June 8, 2001, among Dura Operating
Corp., Dura Automotive Systems, Inc., the subsidiary
guarantors named therein (the "Subsidiary Guarantors") and
Banc of America Securities LLC, Credit Suisse First Boston
Corporation and J.P. Morgan Securities Inc. (collectively,
the "Initial Purchasers").*
3.1 Restated Certificate of Incorporation of Dura Automotive
Systems, Inc. incorporated by reference to Exhibit 3.1 of
the Registration Statement on Form S-4 (Registration No.
33381213) (the "S-4").
3.2 Amendment and Restated By-laws of Dura Automotive Systems,
Inc., incorporated by reference to Exhibit 3.2 of the
Registration Statement on Form S-1 (Registration No.
333-06601) (the "S-1").
3.3 Certificate of Incorporation of Dura Operating Corp.
incorporated by reference to Exhibit 3.3 of the S-4.
3.4 By-laws of Dura Operating Corp. incorporated by reference to
Exhibit 3.4 of the S-4.
3.5 Certificate of Incorporation of Universal Tool and Stamping
Company, Inc. incorporated by reference to Exhibit 3.7 of
the S-4.
3.6 By-laws of Universal Tool & Stamping Inc. incorporated by
reference to Exhibit 3.8 of the S-4.
3.7 Certificate of Incorporation of Dura Automotive Systems
Cable Operations, Inc. incorporated by reference to Exhibit
3.9 of the S-4.
3.8 By-laws of Dura Automotive Systems Cable Operations, Inc.
incorporated by reference to Exhibit 3.10 of the S-4.
3.9 Certificate of Incorporation of Adwest Electronics, Inc.
incorporated by reference to Exhibit 3.11 of the S-4.
3.10 By-laws of Adwest Electronics, Inc. incorporated by
reference to Exhibit 3.12 of the S-4.
3.11 Certificate of Incorporation of Dura Automotive Systems of
Indiana, Inc. incorporated by reference to Exhibit 3.19 of
the S-4.
3.12 By-laws of Dura Automotive Systems of Indiana, Inc.
incorporated by reference to Exhibit 3.20 of the S-4.
3.13 Certificate of Incorporation of Atwood Automotive, Inc.
incorporated by reference to Exhibit 3.27 of the S-4.
3.14 By-laws of Atwood Automotive, Inc. incorporated by reference
to Exhibit 3.28 of the S-4.
3.15 Certificate of Incorporation of Mark I Molded Plastics of
Tennessee, Inc. incorporated by reference to Exhibit 3.31 of
the S-4.
3.16 By-laws of Mark I Molded Plastics of Tennessee, Inc.
incorporated by reference to Exhibit 3.32 of the S-4.
3.17 Restated Articles of Incorporation of Atwood Mobile
Products, Inc.*
3.18 By-laws of Atwood Mobile Products, Inc.*
4.1 Indenture, dated April 22, 1999, between Dura Operating
Corp., Dura Automotive Systems, Inc., the Subsidiary
Guarantors and U.S. Bank Trust National Association, as
trustee, incorporated by reference to Exhibit 4.7 of the
S-4.
4.2 Supplemental Indenture, dated July 29, 1999 between Dura
Operating Corp., Dura Automotive Systems, Inc., the
Subsidiary Guarantors, and U.S. Bank Trust National
Association, as trustee, incorporated by reference to
Exhibit 4.1 of the report filed on Form 10-Q dated August
16, 1999.
II-18
101
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.3 Second Supplemental Indenture, dated June 22, 2001, between
Dura Operating Corp., Dura Automotive Systems, Inc., the
Guaranteeing Subsidiary, the Original Guarantors and U.S.
Bank Trust National Association, as trustee.*
4.4 Indenture, dated June 22, 2001, between Dura Operating
Corp., Dura Automotive Systems, Inc., the Guarantors and
U.S. Bank Trust National Association, as trustee, relating
to the Notes.*
4.5 Registration Rights Agreement, dated June 22, 2001, between
the Initial Purchasers and Dura Operating Corp., Dura
Automotive Systems, Inc. and the Guarantors.*
5.1 Opinion of Kirkland & Ellis regarding the validity of the
securities offered hereby.**
8.1 Opinion of Kirkland & Ellis regarding federal income tax
considerations.*
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges.*
23.1 Consent of Arthur Andersen LLP, Minneapolis, Minnesota.*
23.2 Consent of KPMG Audit Plc.*
23.3 Consents of Kirkland & Ellis (included in Exhibits 5.1 and
8.1).*
24.1 Powers of Attorney.*
25.1 Statement of Eligibility of Trustee on Form T-1 under the
Trust Indenture Act of 1939 of U.S. Bank Trust National
Association.*
99.1 Form of Letter of Transmittal for the Notes.*
99.2 Form of Notice of Guaranteed Delivery for the Notes.*
99.3 Form of Tender Instructions for the Notes.*
- -------------------------
* Filed herewith.
** To be filed by amendment.
II-19