UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(RULE 14a-101)
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the
Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to
§ 240.24a-12
EVERGREEN SOLAR, INC.
(Name of Registrant as Specified in
its Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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138 Bartlett Street, Marlboro, MA 01752
www.evergreensolar.com
January 26, 2011
Dear Stockholder,
As you know, we are holding a Special Meeting of stockholders on
January 31, 2011 at the Courtyard by Marriott, 75 Felton
Street, Marlboro, Massachusetts 01752 at 8:30 a.m. in order to:
1. approve under the applicable provisions of Nasdaq
Marketplace Rule 5635 the issuance of new
4.0% Convertible Subordinated Additional Cash Notes due
2020 and new 7.5% Convertible Senior Secured Notes due 2017
(and the issuance of common stock issuable upon conversion of
the new 4.0% Convertible Subordinated Additional Cash Notes
due 2020 and the new 7.5% Convertible Senior Secured Notes
due 2017, including shares issuable with respect to the Coupon
Make Whole Payments and, in the case of the New 4% Notes,
with respect to the Additional Amount) in connection with the
proposed Exchange Offers as these transactions are described in
our definitive proxy statement dated January 3, 2011 and
the attached proxy supplement;
2. amend our Certificate of Incorporation to increase the
number of authorized common shares from 120,000,000 shares
to 240,000,000 shares, after giving effect to the
1-for-6
reverse stock split approved by the Companys stockholders
at the Companys annual meeting in July 2010, which became
effective on January 1, 2011;
3. consider and vote upon a proposal to approve one or more
adjournments to the Special Meeting if necessary to permit
further solicitation of proxies if there are not sufficient
votes at the time of the Special Meeting to approve the above
proposals; and
4. transact such other business as may properly come before
the meeting or any postponements or adjournments thereof.
On January 24, 2011, the Companys board of directors
approved certain changes to the Exchange Offers and Consent
Solicitation described in our proxy statement filed with the
Securities and Exchange Commission on January 3, 2011. The
changes include
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increasing the initial conversion rate of the New 4% Notes
at 229.8851 shares of common stock per $1,000 principal
amount of New 4% Notes (equivalent to an initial conversion
price of approximately $4.35 per share), subject to adjustment,
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conditioning the 13% Exchange Offer on the Companys
receipt of valid tenders, not validly withdrawn, of more than
$82,500,000 in aggregate principal amount of Existing
13% Notes,
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setting the initial conversion rate of the New 7.5% Notes to
250 shares of common stock per $1,000 principal amount of
New 7.5% Notes (equivalent to an initial conversion price of
approximately $4.00 per share), subject to adjustment,
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that if more than fifty percent but less than seventy-five
percent of Existing 13% Notes are accepted for exchange in
the 13% Exchange Offer, then the indenture governing the
Existing 13% Notes will be amended to permit the Company to
grant a lien in favor of the holders of the New 7.5% Notes
and for the Existing 13% Notes and the New 7.5% Notes
to be ratably secured by first-priority liens granted by the
Company and the guarantors on substantially all assets owned by
the Company and the guarantors, other than excluded property,
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that if at least seventy-five percent of Existing 13% Notes
are accepted for exchange in the 13% Exchange Offer, then the
indenture governing the Existing 13% Notes will be amended
to provide that the security interest and all of the collateral
securing the Companys obligations under the Existing
13% Notes be released and to terminate the existing
collateral documents and eliminate many of the
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restrictive covenants and certain events of default in the
indenture governing the Existing 13% Notes, and
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that the New 7.5% Notes will have the benefit of
restrictive covenants similar to the restrictive covenants
contained in the indenture governing the Existing 13% Notes.
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The attached proxy supplement provides additional information
with respect to the changes to the Exchange Offers and Consent
Solicitation.
Whether or not you plan to attend the meeting, your vote is
important and we encourage you to vote. After reading the proxy
statement dated January 3, 2011 and the proxy supplement,
please submit your proxy as promptly as possible by following
the instructions on the enclosed proxy card.
We look forward to seeing you at the meeting.
Sincerely yours,
Michael El-Hillow
President and Chief Executive Officer
TABLE OF
CONTENTS
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SUPPLEMENT DATED
JANUARY 26, 2011
TO
PROXY STATEMENT DATED JANUARY 3, 2011
EVERGREEN
SOLAR, INC.
138 Bartlett Street
Marlboro, MA 01752
(508) 357-2221
Background
This supplement and the accompanying form of proxy card are
being mailed on or about January 28, 2011, to the
stockholders of record of Evergreen Solar, Inc. (which is
referred to herein as Evergreen Solar, the
Company, we, us or
our), as of the close of business on
December 23, 2010. The following information supplements,
and should be read in conjunction with, the proxy statement of
the Company, dated January 3, 2011 (the Proxy
Statement), which was previously mailed to you on or about
January 5, 2011. On January 24, 2011, the
Companys board of directors approved certain changes to
the Exchange Offers described in the Proxy Statement. The
changes include
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increasing the initial conversion rate of the New 4% Notes
to 229.8851 shares of common stock per $1,000 principal
amount of New 4% Notes (equivalent to an initial conversion
price of approximately $4.35 per share), subject to adjustment,
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conditioning the 13% Exchange Offer on the Companys
receipt of valid tenders, not validly withdrawn, of more than
$82,500,000 in aggregate principal amount of Existing
13% Notes,
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setting the initial conversion rate of the New 7.5% Notes at
250 shares of common stock per $1,000 principal amount of
New 7.5% Notes (equivalent to an initial conversion price of
approximately $4.00 per share), subject to adjustment,
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that if more than fifty percent but less than seventy-five
percent of Existing 13% Notes are accepted for exchange in
the 13% Exchange Offer, then the indenture governing the
Existing 13% Notes will be amended to permit the Company to
grant a lien in favor of the holders of the New 7.5% Notes
and for the Existing 13% Notes and the New 7.5% Notes
to be ratably secured by first-priority liens granted by the
Company and the guarantors on substantially all assets owned by
the Company and the guarantors, other than excluded property,
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that if at least seventy-five percent of Existing 13% Notes
are accepted for exchange in the 13% Exchange Offer, then the
indenture governing the Existing 13% Notes will be amended
to provide that the security interest and all of the collateral
securing the Companys obligations under the Existing
13% Notes be released and to terminate the existing
collateral documents and eliminate many of the restrictive
covenants and certain events of default in the indenture
governing the Existing 13% Notes; and
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that the New 7.5% Notes will have the benefit of
restrictive covenants similar to the restrictive covenants
contained in the indenture governing the Existing 13% Notes.
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To the extent of any inconsistencies between the terms of the
New Notes described in the Proxy Statement and this supplement,
the terms described in this supplement will control.
Adjournment
of the Special Meeting
In order to give stockholders adequate time to consider the
additional disclosures contained in this supplement, the Company
will adjourn the special meeting of stockholders immediately
after it is convened on January 31, 2011. The Company
expects to announce the date, time and location at which the
adjourned meeting will reconvene at the meeting on
January 31, 2011 where the adjournment is taken and the
Company
anticipates announcing that the special meeting will reconvene
on or about February 9, 2011. As a result of the meeting
adjournment, no substantive matters will be discussed on January
31, 2011 and the Company does not expect shareholders to attend
the meeting in person on that date.
The Company hereby amends and supplements its proxy statement,
dated January 3, 2011, in the sections identified below as
follows:
The Overview of the Recapitalization Plan is hereby amended and
restated as follows:
Overview
of the Recapitalization Plan
The recapitalization plan, if completed, will substantially
reduce the Companys outstanding indebtedness and annual
interest expense, exchange a portion of the Companys
existing debt for new debt with longer maturities and create a
capital structure that the Company believes is more likely to
cause the holders of the Companys convertible debt to
convert their notes into common stock (which would further
accomplish the Companys long term goal of substantially
reducing outstanding debt). The recapitalization plan is
comprised of the following elements:
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the Exchange Offers and Consent Solicitation described below;
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implementing the
1-for-6
reverse stock split (the Reverse Split) previously
approved by the Companys stockholders at the
Companys Annual Meeting on July 27, 2010, which
became effective on January 1, 2011. The primary objective
of the Reverse Split is to raise the per share trading price of
the Companys common stock. The Company believes that this
will, among other things, better enable it to maintain the
listing requirements of its common stock under Nasdaq
Marketplace Rules and facilitate higher levels of institutional
stock ownership, as investment policies of many institutional
investors require minimum securities price points; and
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increasing the Companys authorized shares of common stock
to 240,000,000 shares in order to ensure that the Company
has sufficient shares available for future issuance.
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The Companys board of directors initially approved a new
financing involving the sale of up to $40 million aggregate
principal amount of New 4% Notes as part of the
recapitalization plan (the New 4% Notes
Financing). However, the Company has decided not to pursue
the New 4% Notes Financing at this time. Accordingly,
except as otherwise discussed in this supplement, all references
to the New 4% Notes Financing in the Proxy Statement shall
no longer be applicable.
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On July 1, 2010, the Company received a deficiency notice
from The Nasdaq Global Market stating that, based on the closing
price of its common stock for the 30 consecutive business days
preceding such date, the Company no longer meets the minimum
$1.00 per share requirement for continued listing on The Nasdaq
Global Market. In connection with the recapitalization plan, the
Company submitted an application to move the listing of the
Companys common stock from The Nasdaq Global Market to The
Nasdaq Capital Market in order to give the Company an additional
180-day
grace period to regain compliance with the minimum bid price
rule to avoid delisting of the Companys common stock. The
move became effective on December 29, 2010. On
January 18, 2011, as a result of our implementation of the
Reverse Split described above on January 1, 2011, Nasdaq
notified the Company that the Company has regained compliance
with the minimum bid price rule and the matter is now closed.
The information in this Proxy Statement reflects the
implementation of the Reverse Split except where otherwise noted.
The proposed Exchange Offers and Consent Solicitation described
in Proposal No. 1 and Material Terms of the
Exchange Offers, and the amendment to the Companys
Certificate of Incorporation described in
Proposal No. 2 are important steps in meeting the
Companys objectives of strengthening its capital structure
and continuing to fund its operations and expected growth.
DISCUSSION
Risk Factors Risk Relating to
Proposals No. 1 and No. 2
Stockholders will experience significant dilution as a result of
the Companys proposed Exchange Offers and the New 4% Notes
Financing and future equity issuances
The risk factor is hereby amended and restated as follows:
Stockholders
will experience significant dilution as a result of the
Companys proposed Exchange Offers and future equity
issuances.
We have currently reserved approximately 14.4 million
shares of our common stock for issuance upon conversion of the
Existing Notes, representing approximately 32% of the
Companys outstanding shares (including all shares of
common stock outstanding, outstanding stock options, shares
reserved for issuance under the Companys equity
compensation plans and employee stock purchase plans, and all
shares issuable under the Companys convertible notes and
related coupon make whole payments and additional amounts upon
conversion (fully diluted)) as of October 2,
2010. If we complete the Exchange Offers, we will need to
reserve a significant number of additional shares of common
stock for issuance upon conversion, including with respect to
coupon make-whole payments and additional amounts payable on
conversion. Although we can elect to make these additional
payments in cash or by issuing shares of common stock, so long
as any Existing 13% Notes or New 7.5% Notes remain
outstanding, we will be required to issue additional shares of
common stock to make any of these payments with respect to the
New 4% Notes, and, if the Company accepts more than fifty
percent but less than seventy-five percent of the Existing
13% Notes in the 13% Exchange Offer and if Proposal No. 2
(increase in authorized stock) is approved, then while our
existing 13% notes are outstanding we may not make this Coupon
Make Whole payment in cash, and if Proposal No. 2 (increase in
authorized stock) is not approved, so long as any Existing
13% Notes remain outstanding, the Company will be required
to issue additional shares of common stock to make coupon make
whole payments with respect to the New 7.5% Notes unless it
does not then have a sufficient number of authorized and
unissued shares that have not been reserved for other purposes.
If Proposal No. 1 is approved and we complete the
Exchange Offers (assuming that we issue the full $100,000,000
aggregate principal amount of New 4% Notes and the full
$165,000,000 aggregate principal amount of New 7.5% Notes
in the Exchange Offers):
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the New Notes will be convertible into a total of approximately
64.2 million shares of common stock, or approximately 64%
of the Companys outstanding common stock on a fully
diluted basis (excluding shares issuable upon conversion with
respect to coupon make whole payments and additional amounts
payable upon conversion which are discussed below) based on
assumed initial conversion prices of $4.35 per share for the New
4% Notes and $4.00 per share for the New 7.5% Notes;
and
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at an assumed valuation price of $3.00 per share for purposes of
calculating the number of shares to be issued as payment for
both the New 4% Notes and the New 7.5% Notes, which is the floor
price for purposes of valuing shares of common stock for these
payments, a total of 32.5 million shares would be issuable
upon conversion with respect to these coupon make-whole payments
and other payments that the Company may satisfy through the
issuance of additional shares or the payment of cash upon
conversion, and together with the 64.2 million shares
issuable upon conversion described in the first bullet above,
would represent a total of 96.7 million shares of common
stock, or approximately 73% of the Companys outstanding
common stock on a fully diluted basis.
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As a result of the foregoing, the Companys existing
stockholders would incur substantial dilution to their voting
interests and will own a smaller percentage of the
Companys outstanding common stock. In addition, if
Proposal No. 2 (increase in authorized common stock) is not
approved, it is possible we may not have sufficient shares to
make a portion of the payments referred to in the second and
third bullets above in shares of common stock, in which case we
would be required to make these payments in cash. See Risk
FactorsRisks
Relating to Proposals No. 1 and No. 2If Proposal
No. 2 is not approved, we may be required to pay in cash
certain coupon make whole payments and additional payments due
on conversion of the New Notes.
* * *
DISCUSSION
Risk Factors Risks Relating to Proposals No. 1
and No. 2 Although the Exchange Offers will
significantly reduce the Companys outstanding
indebtedness, the Companys high level of debt could
adversely affect its ability to fulfill its obligations under
the New Notes and impact the Companys future operations
and growth plans.
The risk factor is hereby amended and restated as follows:
Although
the Exchange Offers will significantly reduce the Companys
outstanding indebtedness, the Companys high level of debt
could adversely affect its ability to fulfill its obligations
under the New Notes and impact the Companys future
operations and growth plans.
The Companys current annual cash interest obligations
associated with its outstanding convertible debt is
approximately $31.4 million. After giving effect to the
Exchange Offers (assuming that the 4% Exchange Offer was
completed at the 4% Maximum Amount and at a $500 Exchange Ratio
and that all of the Existing 13% Notes were tendered in the
13% Exchange Offer), the Companys expected annual cash
interest obligations associated with its outstanding convertible
debt would be approximately $18.3 million. See
Discussion-Unaudited Pro Forma Financial Data. In
addition, the Company must repay $36.8 million of loans and
related interest payable to Hubei Science and Technology
Investment Co., Ltd., an investment fund sponsored by the
government of Hubei, China, or HSTIC, by July 24, 2014, in
connection with the financing of its China-based wafer
manufacturing facility. The Company may also incur additional
debt from time to time to finance working capital, product
development efforts, strategic acquisitions, investments and
alliances, capital expenditures or other general corporate
purposes, subject to the restrictions contained in the
indentures governing the Existing Notes, the New 7.5% Notes
and the New 4% Notes, and in any other agreements under
which the Company incurs indebtedness.
The Companys significant debt and debt service
requirements could adversely affect its ability to operate its
business and may limit the Companys ability to take
advantage of potential business opportunities. For example, the
Companys high level of debt presents the following risks:
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the Company is required to use a substantial portion of its cash
flow from operations to pay principal at maturity and interest
on its debt when due, thereby reducing the availability of its
cash flow to fund working capital, capital expenditures, product
development efforts, acquisitions, investments and strategic
alliances and other general corporate requirements, as well as
making it more difficult for the Company to make payments on the
notes;
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the Companys substantial leverage increases its
vulnerability to economic downturns and adverse competitive and
industry conditions and could place Company at a competitive
disadvantage compared to its competitors that have less debt or
are less leveraged;
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the Companys debt service obligations could limit its
flexibility in planning for, or reacting to, changes in its
business and its industry and could limit the Companys
ability to pursue other business opportunities, borrow more
money for operations or capital in the future and implement its
business strategies;
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the Companys level of debt and the covenants within its
debt instruments may restrict the Company from raising
additional financing on satisfactory terms to fund working
capital, capital expenditures, product development efforts,
strategic acquisitions, investments and alliances, and other
general corporate requirements; and
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covenants in the Companys debt instruments may limit its
ability to pay dividends, issue new or additional debt,
guarantee debt or make other restricted payments and investments.
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Any of the above-listed factors could have an adverse effect on
the Companys business, financial condition and results of
operations.
A failure to comply with the covenants and other provisions in
the Companys debt instruments could result in events of
default under such instruments, which could permit acceleration
of the Companys various outstanding notes. Any required
repayment of the Companys indebtedness as a result of
acceleration would reduce the amount of its current cash on hand
such that the Company would not have those funds available for
use in its business. In addition, the Company may not have
sufficient cash on hand to pay all such amounts in the event of
an acceleration.
Although completion of the Exchange Offers will, overall,
substantially reduce the Companys outstanding indebtedness
and the Companys cash interest obligations, the Company
will still have a significant amount of indebtedness
outstanding. Although the Companys recapitalization plan
is intended to create a capital structure that the Company
believes is more likely to cause the holders of its convertible
debt to convert their notes into common stock (which would
further accomplish the Companys long term goal of
substantially reducing outstanding debt), the Company can
provide no assurances that these conversions will occur. If the
Companys indebtedness outstanding after the Exchange
Offers is not subsequently substantially reduced by conversions
into common stock prior to maturity, the Company may have to
eventually reduce its indebtedness by other means, including
further debt restructurings or raising additional funds through
new equity financings if the Company is unable to service its
debt or repay principal when due. The Companys ability to
meet its payment and other obligations may depend on its ability
to reduce its indebtedness through conversions into common stock
or other debt restructurings, and the Companys ability to
generate significant cash flow in the future. This, to some
extent, is subject to general economic, financial, competitive,
legislative and regulatory factors, as well as other factors
that are beyond the Companys control. The Companys
business may not generate cash flow in an amount sufficient to
enable the Company to pay the principal of, or interest on, its
indebtedness or to fund its other liquidity needs, including
working capital, capital expenditures, product development
efforts, strategic acquisitions, investments and alliances, and
other general corporate requirements.
The Company cannot assure you that its total indebtedness will
be reduced by conversions into common stock, or that the Company
will be able to reduce its indebtedness by other means, or that
its business will generate sufficient cash flows from operations
or that future borrowings will be available to the Company in
amounts sufficient and on terms reasonable to the Company to
support its liquidity needs. If the Company is not able to
generate sufficient cash flow to service its debt obligations
and fund its liquidity needs, the Company may need to refinance
or restructure its indebtedness, sell assets, reduce or delay
capital investments, or seek to raise additional capital. The
Company cannot assure you that any of these remedies could, if
necessary, be effected on commercially reasonable terms, or at
all, or that they would permit the Company to meet its scheduled
debt service obligations or fund its liquidity needs. In
addition, if the Company incurs additional debt, the risks
associated with its substantial leverage, including the risk
that the Company will be
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unable to service its debt or generate enough cash flow to fund
its liquidity needs, could intensify. If Company is unable to
successfully further refinance or restructure its indebtedness
(including through conversions into common stock), sell assets,
reduce or delay capital investments or raise additional capital,
the Company may have to seek bankruptcy protection.
* * *
DISCUSSION
Risk Factors Risks Relating to Proposals No. 1
and No. 2 The consummation of the 4% Exchange
Offer is not contingent on the 13% Exchange Offer.
The risk factor is hereby replaced in its entirety by the
following new risk factor:
The
New 7.5% Notes will receive a security interest and, if the
Company does not consummate the 13% Exchange Offer, or if it
receives the consent of more than fifty percent but less than
seventy-five percent of the aggregate principal amount of
Existing 13% Notes, the Existing 13% Notes will retain
their security interest.
The New 7.5% Notes will be secured by a first-priority lien
on substantially all of the assets owned by the Company and the
guarantors, and have the benefit of restrictive covenants. These
restrictive covenants include covenants that would prevent the
Company from redeeming the New 4% Notes at the
Companys option or making certain additional payments that
are payable upon conversion of the New 4% Notes in cash.
Furthermore, the 13% Notes Indenture requires the consent
of holders of at least seventy-five percent of the aggregate
principal amount of Existing 13% Notes then outstanding in
order to release the security interest and all of the collateral
securing the Companys obligations under the Existing
13% Notes and terminate the existing collateral documents.
If the Company does not consummate the 13% Exchange Offer and
Consent Solicitation, or if the Company receives the consent of
more than fifty percent but less than seventy-five percent of
the aggregate principal amount of Existing 13% Notes, the
Existing 13% Notes will continue to be secured by a
first-priority lien on substantially all of the assets owned by
the Company and the guarantors, and have the benefit of
restrictive covenants. These restrictive covenants include
covenants that would prevent the Company from redeeming the New
4% Notes or the New 7.5% Notes at the Companys
option or making certain additional payments that are payable
upon conversion of the New 4% Notes in cash and could prevent
the Company from making certain coupon make whole payments that
are payable upon conversion of the New 7.5% Notes in cash.
* * *
DISCUSSION
Risk Factors Risks Related to Proposals No. 1
and No. 2 The New 4% Notes Financing may not be
consummated, and the Exchange Offers and Consent Solicitation
are not contingent on the closing of the New 4% Notes
Financing.
The risk factor is hereby amended and restated as follows:
The
Companys decision to not consummate the New 4% Notes
Financing at this time could increase the likelihood of an
adverse impact on the Companys liquidity.
As a result of the Companys decision to not consummate the
New 4% Notes Financing at this time if other debt or equity
financing is unavailable, it may have insufficient liquidity to
meet its operational and initial growth needs and will have to
take actions such as reducing or delaying capital expenditures,
product development efforts, strategic acquisitions, investments
and alliances, selling assets, restructuring or refinancing its
debt, including the New Notes, or seeking additional equity
capital.
If we
do not accept for tender more than $199,207,000 aggregate
principal amount in Existing 4% Notes, the right of holders
of our Existing 13% Notes to require us to repurchase their
Existing 13% Notes in 2013 will not
terminate.
The 13% Notes Indenture provides that a holder of Existing
13% Notes may require the Company to repurchase all or a
portion of such holders notes on April 15, 2013
unless less than $50,000,000 in aggregate
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principal amount of Existing 4% Notes and any debt (other
than subordinated debt (as defined in the 13%
Indenture for this purpose)) used to refinance the Existing
4% Notes is outstanding. If the Company does not accept for
tender more than $199,207,000 in aggregate principal amount of
Existing 4% Notes, at least $50,000,000 aggregate principal
amount of Existing 4% Notes will remain outstanding after
the close of the Exchange Offers. If this were to occur, holders
of Existing 13% Notes would continue to be able to require
the Company to repurchase their Existing 13% Notes in April
2013.
* * *
DISCUSSION
Risk Factors Risks Related to Proposals No. 1
and No. 2 If Proposal No. 2 is not
approved, we may be required to pay in cash certain coupon make
whole payments and additional payments due on conversion of the
New Notes.
The risk factor is hereby amended and restated as follows:
If
Proposal No. 2 is not approved, the Company may be
required to pay in cash certain coupon make whole payments due
on conversion of the New 7.5% Notes.
The Company will be obligated to pay coupon make whole payments
on the New 7.5% Notes upon conversion and will have the
option under certain circumstances of making these payments in
shares or cash. However, if Proposal No. 2 (increase
in authorized common stock) is not approved, under certain
circumstances the Company could be in a position where the
Company does not have sufficient authorized shares to pay these
amounts by issuing shares, and the Company would be required to
pay these amounts in cash. This could have a material adverse
effect on the Companys financial flexibility, the
Companys liquidity and the Companys ability to fund
its operations and expected growth. In addition, if the Company
did not have sufficient cash to pay these amounts, this
non-payment would create an event of default with respect to the
New 7.5% Notes.
* * *
DISCUSSION
Risk Factors Risk Relating to
Proposals No. 1 and No. 2 Completion
of the Companys recapitalization plan may cause
fluctuations in the price of its common stock
The risk factor is hereby amended and restated as follows:
Completion
of the Companys recapitalization plan may cause
fluctuations in the price of its common stock.
As part of the recapitalization plan, the Company has
implemented the Reverse Split. The primary objective of the
Reverse Split is to have the ability to raise the per share
trading price of the Companys common stock. The Company
believes that this will, among other things, better enable the
Company to maintain the listing requirements of its common stock
under Nasdaq Marketplace Rules and facilitate higher levels of
institutional stock ownership, as investment policies of many
institutional investors require minimum securities price points.
The Company cannot assure you that the Reverse Split will
accomplish this objective for any meaningful period of time.
While the Company expects that the reduction in the number of
outstanding shares of common stock will proportionally increase
the market price of its common stock, the Company cannot assure
you that the Reverse Split will increase the market price of its
common stock or result in any permanent or sustained increase in
the market price of our stock, which is dependent upon many
factors, including our business and financial performance,
general market conditions, and prospects for future success.
Furthermore, if a large percentage of holders of New Notes
convert their New Notes soon after the settlement of the
Exchange Offers, a significant number of additional shares of
the Companys common stock will be in the market, diluting
the ownership interest of the Companys existing
stockholders which could have an adverse impact on the price of
the Companys common stock.
7
* * *
DISCUSSION
Impact of the Exchange Offers and New 4% Notes Financing on the
Companys Capitalization, Book Value and Unaudited Pro
Forma Financial Information
These sections are hereby amended and restated as follows:
Impact of
the Exchange Offers on the Companys
Capitalization
The following table sets forth the Companys cash, cash
equivalents and marketable securities and the Companys
capitalization as of October 2, 2010:
|
|
|
|
|
on an actual basis; and
|
|
|
|
on an as adjusted basis to give effect to the Exchange Offers
and Consent Solicitation, as if they had occurred on
October 2, 2010.
|
The table should be read in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations in the Companys
Quarterly Report on
Form 10-Q
for the quarter ended October 2, 2010 and its consolidated
financial statements and the notes to those financial statements
incorporated by reference in this Proxy Statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of October 2, 2010
|
|
|
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
|
|
|
(Dollars in thousands,
|
|
|
|
|
|
|
except par value)
|
|
|
|
|
|
Cash, cash equivalents and marketable securities
|
|
$
|
93,275
|
|
|
$
|
82,947
|
|
|
|
|
|
Restricted cash
|
|
|
6,710
|
|
|
|
6,710
|
|
|
|
|
|
Existing 4% Notes
|
|
|
221,899
|
|
|
|
43,815
|
|
|
|
|
|
Existing 13% Notes
|
|
|
165,000
|
|
|
|
|
|
|
|
|
|
Loan and related interest payable
|
|
|
36,786
|
|
|
|
36,786
|
|
|
|
|
|
New 4% Notes(1)
|
|
|
|
|
|
|
51,996
|
|
|
|
|
|
New 7.5% Notes(2)
|
|
|
|
|
|
|
72,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt
|
|
|
423,685
|
|
|
|
205,105
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 75,000,000 shares
authorized, 34,818,011 issued and outstanding(3)
|
|
|
348
|
|
|
|
348
|
|
|
|
|
|
Preferred stock, $0.01 par value, 27,227,668 shares
authorized, none issued and outstanding, actual and as adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
1,033,849
|
|
|
|
1,178,958
|
|
|
|
|
|
Accumulated deficit
|
|
|
(685,603
|
)
|
|
|
(612,132
|
)
|
|
|
|
|
Accumulated other comprehensive income(4)
|
|
|
244
|
|
|
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
348,838
|
|
|
|
567,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
772,523
|
|
|
$
|
772,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Assumes $200,000,000 principal amount of Existing 4% Notes are
tendered and accepted and $100,000,000 principal amount of New
4% Notes is issued in the 4% Exchange Offer.
|
|
(2)
|
|
Assumes $165,000,000 principal amount of New 7.5% Notes is
issued in the 13% Exchange Offer.
|
|
(3)
|
|
Excludes (i) shares issuable upon exercise of outstanding
options; (ii) shares issuable under the Companys
stock option and incentive plan and the Companys employee
stock purchase plan; (iii) shares potentially issuable upon
conversion of the Existing Notes; and (iv) shares
potentially issuable upon conversion of the New Notes. As a
result of the amendment to our certificate of incorporation that
was filed to effect the Reverse Split and became effective on
January 1, 2011, we currently have 120,000,000 shares
authorized. In connection with the Companys
recapitalization plan, the Company is asking its stockholders to
approve an increase to its authorized shares of common stock to
240,000,000, after giving effect to the Reverse Split.
|
8
|
|
|
(4)
|
|
Comprehensive loss consists of cumulative foreign currency
translation adjustments.
|
The as adjusted information discussed above is illustrative only
and may change depending on the actual total amount of Existing
Notes tendered in the Exchange Offers and the exchange ratio at
which Existing 4% Notes are exchanged for New 4% Notes.
Book
Value
As of October 2, 2010, the Company had a net book value of
$348.8 million or approximately $10.02 per share of its
common stock outstanding. Net book value per share is equal to
the Companys total assets less total liabilities, divided
by the outstanding number of shares of its common stock.
After giving effect to the Exchange Offers as described above,
the Companys pro forma net book value as adjusted as of
October 2, 2010 will be approximately $567.4 million
or approximately $16.30 per share of its common stock
outstanding. Common stock outstanding excludes stock options and
shares of the Companys stock issuable under all
convertible notes outstanding.
Unaudited
Pro Forma Financial Data
The following unaudited pro forma financial information is based
on, and should be read in conjunction with the Companys
audited consolidated financial statements and related notes that
are contained in the Companys Current Report on
Form 8-K
dated August 12, 2010 and the Companys unaudited
consolidated financial statements and related notes that are
contained in the Companys Quarterly Report on
Form 10-Q
for the period ended October 2, 2010, and with the
Companys Managements Discussion and Analysis
of Financial Condition and Results of Operations contained
in these documents, incorporated by reference in this proxy
statement. The unaudited pro forma financial information gives
effect to the following transactions, as if such transactions
were consummated as of January 1, 2009 for statement of
operations purposes and October 2, 2010 for balance sheet
purposes including:
|
|
|
|
|
the tender and cancellation of $200,000,000 aggregate principal
amount of Existing 4% Notes, the maximum amount that the
Company will accept for exchange pursuant to the 4% Exchange
Offer;
|
|
|
|
the tender and cancellation of $165,000,000 aggregate principal
amount of Existing 13% Notes, the maximum amount that the
Company will accept for exchange pursuant to the 13% Exchange
Offer;
|
|
|
|
the issuance of $100,000,000 aggregate principal amount of New
4% Notes in exchange for the Existing 4% Notes;
|
|
|
|
the issuance of $165,000,000 aggregate principal amount of New
7.5% Notes in exchange for the Existing 13% Notes;
|
|
|
|
the payment of an estimated $7.8 million in fees and
expenses related to the Exchange Offers; and
|
|
|
|
payment of approximately $2.5 million in accrued but unpaid
interest associated with Existing 4% Notes and Existing
13% Notes that are tendered in accordance with the terms of
the Exchange Offers.
|
The unaudited pro forma financial information set forth below
gives effect to the Reverse Split, except where otherwise
indicated. The unaudited pro forma financial information set
forth below is based on estimates and assumptions which have
been made solely for purposes of developing such pro forma
information and is for informational purposes only, is not an
indication of future performance, and should not be considered
indicative of actual results that would have been achieved had
the Exchange Offers actually been consummated on the dates or at
the beginning of the periods presented. The estimated pro forma
adjustments arising from the Exchange Offers are derived from
the preliminary accounting of the transactions. However, no pro
forma adjustments have been presented with respect to any
potential impact of troubled debt restructuring accounting
requirements, any potential embedded derivatives with respect to
the New Notes or any conversions of notes during the periods
presented. The final accounting for the Exchange Offers will not
be completed until the final terms are known.
9
Unaudited
Consolidated Pro Forma Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
|
|
|
|
October 2,
|
|
|
Exchange
|
|
|
|
|
|
|
2010
|
|
|
Adjustment
|
|
|
Pro Forma
|
|
|
|
(In thousands, except per share data)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
93,275
|
|
|
$
|
(10,328
|
)
|
|
$
|
82,947
|
(1)
|
Accounts receivable, net of allowances for doubtful accounts
|
|
|
59,390
|
|
|
|
|
|
|
|
59,390
|
|
Inventory
|
|
|
47,140
|
|
|
|
|
|
|
|
47,140
|
|
Prepaid cost of inventory
|
|
|
34,524
|
|
|
|
|
|
|
|
34,524
|
|
Other current assets
|
|
|
25,001
|
|
|
|
|
|
|
|
25,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
259,330
|
|
|
|
(10,328
|
)
|
|
|
249,002
|
|
Restricted cash
|
|
|
6,710
|
|
|
|
|
|
|
|
6,710
|
|
Deferred financing costs
|
|
|
10,249
|
|
|
|
7,798
|
|
|
|
18,047
|
(2)
|
Loan receivable from Jiawei and related interest
|
|
|
13,311
|
|
|
|
|
|
|
|
13,311
|
|
Prepaid cost of inventory
|
|
|
121,213
|
|
|
|
|
|
|
|
121,213
|
|
Fixed assets, net
|
|
|
423,936
|
|
|
|
|
|
|
|
423,936
|
|
Other assets
|
|
|
302
|
|
|
|
|
|
|
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
835,051
|
|
|
$
|
(2,530
|
)
|
|
$
|
832,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
37,712
|
|
|
$
|
|
|
|
$
|
37,712
|
|
Due to Sovello AG and related guarantees
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued employee compensation
|
|
|
4,533
|
|
|
|
|
|
|
|
4,533
|
|
Accrued interest
|
|
|
11,372
|
|
|
|
(2,530
|
)
|
|
|
8,842
|
(3)
|
Accrued warranty
|
|
|
3,515
|
|
|
|
|
|
|
|
3,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
57,132
|
|
|
|
(2,530
|
)
|
|
|
54,602
|
|
Convertible notes, net of discount
|
|
|
386,899
|
|
|
|
(218,580
|
)
|
|
|
168,319
|
(4)
|
Loan and related interest payable
|
|
|
36,786
|
|
|
|
|
|
|
|
36,786
|
|
Deferred income taxes
|
|
|
5,396
|
|
|
|
|
|
|
|
5,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
486,213
|
|
|
|
(221,110
|
)
|
|
|
265,103
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 75,000,000 shares
authorized, 208,908,066 shares issued and outstanding at
October 2, 2010(6)
|
|
|
348
|
|
|
|
|
|
|
|
348
|
(6)
|
Additional paid-in capital
|
|
|
1,033,849
|
|
|
|
145,109
|
|
|
|
1,178,958
|
(4)
|
Accumulated deficit
|
|
|
(685,603
|
)
|
|
|
73,471
|
|
|
|
(612,132
|
)(5)
|
Accumulated other comprehensive income (loss)
|
|
|
244
|
|
|
|
|
|
|
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
348,838
|
|
|
|
218,580
|
|
|
|
567,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
835,051
|
|
|
$
|
(2,530
|
)
|
|
$
|
832,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents the payment of an estimated $7.8 million in fees
and expenses related to the Exchange Offers and payment of
approximately $2.5 million in accrued but unpaid interest
associated with Existing 4% Notes and Existing
13% Notes that are tendered in accordance with the terms of
the Exchange Offers.
|
10
|
|
|
(2)
|
|
The Company is currently evaluating the accounting for the
Exchange Offers with respect to troubled debt restructuring in
accordance with
ASC 470-60-55,
the final accounting for which will be dependent upon the final
terms of the Exchange Offers. If the New Notes issued under the
Exchange Offers are to be accounted for as a troubled debt
restructuring, the approximately $18 million of estimated
financing costs would be treated as reduction of the gain on
extinguishment of the Existing 4% Notes.
|
|
(3)
|
|
As part of the Exchange Offers, holders of the Existing
4% Notes and Existing 13% Notes will receive accrued
and unpaid interest on any notes accepted in the Exchange
Offers. The adjustment of $2.5 million reflects the payment
of all accrued and unpaid interest on the Existing 4% Notes
and Existing 13% Notes as of October 2, 2010.
|
|
(4)
|
|
Primarily represents the discounts as a result of the existence
of the cash settlement provisions of the New Notes. No pro forma
adjustments have been presented for any potential embedded
derivatives of the New Notes issued in the Exchange Offers. The
final accounting for the Exchange Offers will not be completed
until the final terms are known.
|
|
(5)
|
|
Represents the estimated gain on extinguishment of debt
associated with the exchange of the Existing 4% Notes. As
previously noted, the estimated gain is subject to further
adjustment upon final accounting determination of troubled debt
restructuring (ASC
470-60-55)
or any potential embedded derivates of the notes issued in the
Exchange Offers.
|
|
(6)
|
|
As a result of the amendment to our certificate of incorporation
that was filed to effect the Reverse Split and became effective
on January 1, 2011, we currently have
120,000,000 shares authorized.
|
11
Unaudited
Consolidated Pro Forma Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2009
|
|
|
Year-to-Date Period Ending October 2, 2010
|
|
|
|
|
|
|
Pro Forma
|
|
|
Pro
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
Historical
|
|
|
Adjustment
|
|
|
Forma
|
|
|
Historical
|
|
|
Adjustment
|
|
|
Pro Forma
|
|
|
|
(In thousands, except per share data)
|
|
|
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
271,848
|
|
|
$
|
|
|
|
$
|
271,848
|
|
|
$
|
249,524
|
|
|
$
|
|
|
|
$
|
249,524
|
|
Cost of revenue
|
|
|
253,484
|
|
|
|
|
|
|
|
253,484
|
|
|
|
229,725
|
|
|
|
|
|
|
|
229,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
18,364
|
|
|
|
|
|
|
|
18,364
|
|
|
|
19,799
|
|
|
|
|
|
|
|
19,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
18,058
|
|
|
|
|
|
|
|
18,058
|
|
|
|
15,078
|
|
|
|
|
|
|
|
15,078
|
|
Selling, general and administrative
|
|
|
26,260
|
|
|
|
|
|
|
|
26,260
|
|
|
|
28,713
|
|
|
|
|
|
|
|
28,713
|
|
Write-off of loan receivable from silicon supplier
|
|
|
43,882
|
|
|
|
|
|
|
|
43,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility
start-up
and
equipment write-offs
|
|
|
16,115
|
|
|
|
|
|
|
|
16,115
|
|
|
|
14,481
|
|
|
|
|
|
|
|
14,481
|
|
Restructuring charges
|
|
|
11,940
|
|
|
|
|
|
|
|
11,940
|
|
|
|
13,780
|
|
|
|
|
|
|
|
13,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
116,255
|
|
|
|
|
|
|
|
116,255
|
|
|
|
72,052
|
|
|
|
|
|
|
|
72,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(97,891
|
)
|
|
|
|
|
|
|
(97,891
|
)
|
|
|
(52,253
|
)
|
|
|
|
|
|
|
(52,253
|
)
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gains (losses), net
|
|
|
2,650
|
|
|
|
|
|
|
|
2,650
|
|
|
|
(2,845
|
)
|
|
|
|
|
|
|
(2,845
|
)
|
Interest income
|
|
|
4,728
|
|
|
|
|
|
|
|
4,728
|
|
|
|
1,612
|
|
|
|
|
|
|
|
1,612
|
|
Interest expense
|
|
|
(27,992
|
)
|
|
|
(12,386
|
)
|
|
|
(40,378
|
)
|
|
|
(29,002
|
)
|
|
|
(23,141
|
)
|
|
|
(52,143
|
)(1)
|
Gain on early extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,777
|
|
|
|
|
|
|
|
24,777
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
(20,614
|
)
|
|
|
(12,386
|
)
|
|
|
(33,000
|
)
|
|
|
(5,458
|
)
|
|
|
(23,141
|
)
|
|
|
(28,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before noncontrolling interest, equity income (loss) from
interest in Sovello AG, (impairment) recovery of equity
investment and income tax benefit
|
|
|
(118,505
|
)
|
|
|
(12,386
|
)
|
|
|
(130,891
|
)
|
|
|
(57,711
|
)
|
|
|
(23,141
|
)
|
|
|
(80,852
|
)
|
Equity income (loss) from interest in Sovello AG
|
|
|
(29,748
|
)
|
|
|
|
|
|
|
(29,748
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and other charges associated with equity investment
in Sovello AG
|
|
|
(126,057
|
)
|
|
|
|
|
|
|
(126,057
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of impairment charges associated with Sovello AG
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,227
|
|
|
|
|
|
|
|
3,227
|
|
Income tax benefit
|
|
|
(8,090
|
)
|
|
|
|
|
|
|
(8,090
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss including noncontrolling interest
|
|
$
|
(266,220
|
)
|
|
|
(12,386
|
)
|
|
$
|
(278,606
|
)
|
|
$
|
(54,484
|
)
|
|
|
(23,141
|
)
|
|
$
|
(77,625
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to Evergreen Solar, Inc. (basic
and diluted), after giving effect to the Reverse Split, which
became effective January 1, 2011(4)
|
|
$
|
(8.51
|
)
|
|
|
|
|
|
$
|
(8.90
|
)
|
|
$
|
(1.59
|
)
|
|
|
|
|
|
$
|
(2.27
|
)
|
Weighted average shares used in computing basic and diluted net
loss per share, after giving effect to the Reverse Split, which
became effective January 1, 2011(4)
|
|
|
31,296
|
|
|
|
|
|
|
|
31,296
|
|
|
|
34,227
|
|
|
|
|
|
|
|
34,227
|
|
12
|
|
|
(1)
|
|
Adjustments to interest expense are comprised of the following
components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2009
|
|
Year-to-date Period Ending October 2, 2010
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
Historical
|
|
Adjustment
|
|
Pro Forma
|
|
Historical
|
|
Adjustment
|
|
Pro Forma
|
|
Coupon
|
|
$
|
16,194
|
|
|
$
|
(4,192
|
)
|
|
$
|
12,002
|
|
|
$
|
20,305
|
|
|
$
|
(3,781
|
)
|
|
$
|
16,524
|
|
Amortization of original issue discount and deferred financing
costs (non-cash)
|
|
|
14,126
|
|
|
|
18,620
|
|
|
|
32,746
|
|
|
|
9,625
|
|
|
|
27,572
|
|
|
|
37,197
|
|
Capitalized interest and other
|
|
|
(2,328
|
)
|
|
|
(2,041
|
)
|
|
|
(4,369
|
)
|
|
|
(928
|
)
|
|
|
(650
|
)
|
|
|
(1,578
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
27,992
|
|
|
$
|
12,386
|
|
|
$
|
40,378
|
|
|
$
|
29,002
|
|
|
$
|
23,141
|
|
|
$
|
52,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
The gain on extinguishment of debt associated with the exchange
of the Existing 4% Notes in not included as an adjustment
to the pro forma amounts because it is not considered to have a
continuing impact on our results of operations.
|
|
(3)
|
|
No adjustments were made for income tax adjustments to account
for the changes in pre-tax loss as we recorded a valuation
allowance recorded against all net operating losses.
|
|
(4)
|
|
Gives effect to the Reverse Split, which became effective on
January 1, 2011.
|
* * *
13
PROPOSAL NO. 1
Proposal No. 1 is hereby amended and restated as
follows:
PROPOSAL NO. 1
APPROVAL
OF THE ISSUANCE OF NOTES AND THE ISSUANCE OF THE COMMON
STOCK
UPON
CONVERSION OF THE NOTES
Background
The Company is seeking stockholder approval under the applicable
provisions of Nasdaq Marketplace Rule 5635 for the issuance
of the shares of common stock and the New Notes (and the
issuance of common stock issuable upon conversion of the New
Notes, including shares issuable with respect to the Coupon Make
Whole Payments and, in the case of the New 4% Notes, with
respect to the Additional Amount) in connection with the
proposed Exchange Offers. As described under the captions
Material Terms of the Exchange Offers Terms
and Conditions of the Exchange Offers and Consent
Solicitation, the Company will offer to issue shares of
its common stock, the New 4% Notes and the New
7.5% Notes in exchange for certain Existing Notes. The
4% Exchange Offer is not conditioned on the consummation of
the 13% Exchange Offer and the Company may complete the
4% Exchange Offer without completing the 13% Exchange
Offer. The 13% Exchange Offer is not conditioned on the
consummation of the 4% Exchange Offer and the Company may
complete the 13% Exchange Offer without completing the
4% Exchange Offer.
For a more detailed description of the Exchange Offers and the
terms of the New 4% Notes and the New 7.5% Notes, see
Material Terms of the Exchange Offers Terms
and Conditions of the Exchange Offers and Consent
Solicitation.
Reason
for Request for Stockholder Approval
The Company is seeking approval for the issuance of the New
Notes (and the issuance of common stock issuable upon conversion
of the New Notes, including shares issuable with respect to the
Coupon Make Whole Payments and, in the case of the New 4% Notes,
with respect to the Additional Amount) in connection with the
proposed the Exchange Offers under all the applicable provisions
of Marketplace Rule 5635, which applies to the issuance of
securities in certain circumstances.
Nasdaq Marketplace Rule 5635(d) requires stockholder
approval of the issuance of common stock, or securities
convertible into or exercisable for common stock, equal to 20%
or more of the common stock outstanding before the issuance for
less than the greater of book or market value of the stock.
Because the proposed Exchange Offers would likely result in the
issuance of securities convertible into more than 20% of the
Companys shares at a price that is lower than the current
book value of the shares, the Company is seeking stockholder
approval pursuant to Marketplace Rule 5635(d).
In addition, under Marketplace Rule 5635(b), companies are
required to obtain stockholder approval prior to the issuance of
securities when the issuance or potential issuance would result
in a change of control as defined by Nasdaq. Nasdaq
generally characterizes a transaction whereby an investor or
group of investors acquires, or obtains the right to acquire,
20% of more of the outstanding shares or the voting power of an
issuer on a post-transaction basis as a change of
control for purposes of Rule 5635(b). While the
completion of the Exchange Offers could lead to a change
of control, the Company is not currently aware of any
investor who would acquire more than 20% of the outstanding
shares or the voting power of the Company in the Exchange Offers.
Furthermore, under Marketplace Rule 5635(c), companies are
required to obtain stockholder approval prior to issuance of
common stock or securities convertible into or exercisable for
common stock to certain affiliates at a price less than the
market value of the common stock, as such issuance is considered
a form of equity compensation. To the extent that
the issuance of the shares of common stock and the New Notes in
the Exchange Offers could be considered a form of equity
compensation, the Company is seeking
14
stockholder approval pursuant to Marketplace Rule 5635(c).
The Company is not aware of any affiliates exchanging Existing
Notes in the Exchange Offers.
Impact on
Stockholders of Approval or Disapproval of this
Proposal No. 1
If this proposal is approved, the issuance of the New Notes
could have an anti-takeover effect because such issuance would
make it more difficult for, or discourage an attempt by, a party
to obtain control of the Company by tender offer or other means.
The issuance of the common stock issuable upon conversion of the
New Notes will increase the number of shares entitled to vote,
increase the number of votes required to approve a change of
control of the Company, and dilute the interest of a party
attempting to obtain control of the Company. The Board of
Directors does not have any current knowledge of any effort by
any third party to accumulate the Companys securities or
obtain control of the Company by any means.
If this proposal is not approved, there may be other effects on
the stockholders, including that the Company will be unable to
complete the Exchange Offers. If the Company does not complete
the Exchange Offers, the Company will be unable to retire the
Existing Notes tendered in the Exchange Offers. Consequently,
the Company will be unable to reduce its outstanding
indebtedness and annual interest expense. If the Company does
not consummate the Exchange Offers, the Company will consider
all viable restructuring available to it at such time. However,
viable alternative restructuring may not be available or may not
be on terms as favorable to our stockholders as the terms of the
Exchange Offers. Such alternatives may be expensive, may have an
uncertain timeline and may cause substantially greater dilution
to our stockholders than the Exchange Offers. If the Company is
unable to repay the Existing Notes when due beginning in 2013,
it may be required to seek protection from its creditors through
a bankruptcy filing. If so, it is likely that there would be
little or no assets available for payment or distribution to the
Companys stockholders, and you will lose your entire
investment in the Company. For a discussion of additional risks
relating to the Exchange Offers, see
Discussion Risk Factors Risks
Relating to Proposals No. 1 and No. 2.
Vote
Required and Recommendation of the Board of Directors
The affirmative vote of the holders of a majority of the shares
of common stock present in person or represented by proxy and
voting on the matter is necessary under Rule 5635(e)(4) of
the Nasdaq Marketplace Rules to approve the issuance of the New
Notes and the common stock issuable upon conversion of the New
Notes. Accordingly, failure to vote and broker non-votes will
not affect whether this proposal is approved, but an abstention
will have the same effect as a vote against this proposal.
THE BOARD OF DIRECTORS HAS APPROVED THE ISSUANCE OF THE
SHARES OF COMMON STOCK AND THE NEW NOTES AND THE ISSUANCE
OF THE COMMON STOCK UPON CONVERSION OF THE NEW NOTES AS SET
FORTH IN PROPOSAL NO. 1. THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF
PROPOSAL NO. 1.
* * *
PROPOSAL NO. 2
Proposal No. 2 is hereby amended and restated as
follows:
PROPOSAL
NO. 2
AUTHORIZATION TO INCREASE THE COMPANYS AUTHORIZED
COMMON STOCK
FROM 120,000,000 SHARES TO 240,000,000 SHARES
Background
In order to ensure sufficient shares of common stock will be
available for future issuance by the Company, the Board of
Directors has approved, subject to stockholder approval, an
amendment to the Companys Certificate of Incorporation to
increase the number of shares of the Companys common stock
15
authorized for issuance from 120,000,000 to 240,000,000. You are
being asked to consider and act upon this proposal to approve
the proposed amendment to the Certificate of Incorporation which
is attached as
Appendix A
to this proxy statement.
Although the Company will have enough authorized shares to
complete the proposed Exchange Offers without the approval of
Proposal No. 2, it is important that the Company have
the an appropriate number of authorized but unissued shares
following the recapitalization. This will provide the Company
with the flexibility to, among other things, undertake important
strategic initiatives the Board of Directors may approve from
time to time.
At the Companys annual meeting on July 27, 2010, the
Companys stockholders approved an amendment to the
Companys Certificate of Incorporation to give the Board of
Directors the authority to effect a
1-for-6
reverse stock split (the Reverse Split) of the
Companys common stock issued and outstanding and to reduce
the authorized shares of common stock from 450,000,000 to
120,000,000. The Reverse Split became effective on
January 1, 2011.
Under Delaware law, the Company may only issue shares of common
stock to the extent such shares have been authorized for
issuance under the Companys Certificate of Incorporation.
From
time-to-time,
the Company issues shares of its common stock in connection with
capital raises to fund operations and expansion plans and for
other general corporate purposes. Upon each of these
occurrences, the amount of available authorized shares
decreases. The Companys Certificate of Incorporation
currently authorizes the issuance of up to
120 million shares of common stock. However, as of
October 2, 2010, 34.8 million shares of common stock
were issued and outstanding and 2.6 million shares were
reserved for issuance under the Companys equity
compensation plans pursuant to outstanding and yet to be issued
equity awards and the employee stock purchase plan. If the
Exchange Offers described above under Proposal No. 1
are consummated (assuming that the Company issues the full
$100,000,000 aggregate principal amount of New 4% Notes and
the full $165,000,000 aggregate principal amount of New
7.5% Notes in the Exchange Offers, the New Notes will be
convertible into a total of approximately 64.2 million
shares of common stock, based on assumed initial conversion
prices of $4.35 per share for the New 4% Notes and $4.00
per share for the New 7.5% Notes and excluding shares
issuable upon conversion with respect to coupon make whole
payments and additional amounts payable on conversion, which are
discussed below. The Company will have adequate available shares
of common stock for these issuances upon conversion of the New
Notes whether or not Proposal No. 2 is approved. In
addition, the Company will be obligated to pay coupon make whole
payments on the New Notes upon conversion and pay an additional
amount upon conversion of the New 4% Notes, and will have
the option of making these payments in shares or cash under
certain circumstances. If the Company elected to make these
payments by delivering shares of common stock, these shares
would be valued at a 10% discount to the market price of the
common stock at that time (based on a trading period or a
particular day, depending on the type of conversion), subject to
a floor price of $3.00 per share. At this floor price, a maximum
of approximately 32.5 million shares would be issuable upon
conversion with respect to these coupon make-whole payments and
additional payments that the Company may satisfy through the
issuance of additional shares upon conversion. Although the
Company may choose to complete the Exchange Offers without
approval of Proposal No. 2, it is possible that under
certain circumstances the Company may not have sufficient
authorized shares, at the time such conversions occur, to pay
all of these amounts (under all of the then outstanding New
Notes) by delivering shares. The proposed increase in the
authorized common stock would provide the Company with
additional flexibility to, among other things, make certain
payments due on conversion of a portion of the New Notes in the
future by delivering shares of common stock rather than paying
cash, as well as to issue additional equity and equity linked
securities in the future to fund its operations and expected
growth and other general corporate purposes. See Risk
Factors Risks Relating to Proposals No. 1
and No. 2 If Proposal No. 2 is not
approved, the Company may be required to pay in cash certain
coupon make whole payments due on conversion of the New
7.5% Notes.
Purpose
and Effect of the Increase in the Amount of the Companys
Authorized Common Stock
The principal purpose of this proposal is to authorize
additional shares of common stock, which may be used for general
corporate purposes. As an example, the Board of Directors may in
the future determine that it is appropriate or necessary to
raise additional capital through the sale of equity securities,
convertible debt securities or other equity linked securities,
to acquire another company or its assets, to establish strategic
16
relationships with corporate partners, to provide equity
incentives to employees and officers (subject to additional
stockholder approvals as required), to permit future stock
dividends or for other corporate purposes. In addition, the
Company may use a portion of the additional authorized shares of
common stock to make payments of certain coupon make whole
payments payable on conversion of the New Notes, rather than pay
cash, which would increase the Companys financial
flexibility and liquidity and preserve its cash for funding its
operations and expected future growth. See Risk
Factors Risks Relating to Proposals No. 1
and No. 2 If Proposal No. 2 is not
approved, the Company may be required to pay in cash certain
coupon make whole payments due on conversion of the New
7.5% Notes. The availability of additional shares of
common stock is particularly important in the event that the
Board of Directors needs to undertake any of the foregoing
actions on an expedited basis and thus to avoid the time and
expense of seeking stockholder approval in connection with the
contemplated issuance of common stock. If the amendment is
approved by the stockholders, the Board does not intend to
solicit further stockholder approval prior to the issuance of
any additional shares of common stock, unless stockholder
approval is otherwise required by law or the Marketplace Rules
of the Nasdaq Stock Market which require stockholder approval
for certain issuances of stock.
The increase in authorized number of shares common stock will
not have any immediate effect on the rights of existing
stockholders. However, the Board or Directors will have the
authority to issue authorized common stock without requiring
future stockholder approval of such issuances, except as may be
required by applicable law. To the extent that additional
authorized shares are issued in the future, they may decrease
the existing stockholders percentage equity ownership and,
depending on the price at which they are issued, could be
dilutive to the existing stockholders. Other than OCI Company
Ltd., the Companys largest silicon supplier, the holders
of the Companys common stock have no preemptive rights and
the Board of Directors has no plans to grant such rights with
respect to any such shares. OCIs preemptive rights allow
it to avoid having its ownership diluted by participating in
equity and debt offerings made by the Company on the same terms
and conditions as other purchasers.
The increase in the authorized number of shares of common stock
and the subsequent issuance of such shares could have the effect
of delaying or preventing a change of control of the Company
without further action by the stockholders. Shares of authorized
and unissued common stock could, within the limits imposed by
applicable law or stock exchange rules, be issued in one or more
transactions which would make a change of control of the Company
more difficult, and therefore less likely. Any such issuance of
additional stock could have the effect of diluting the earnings
per share and book value per share of outstanding shares of
common stock and such additional shares could be used to dilute
the stock ownership or voting rights of a person seeking to
obtain control of the Company.
We do not have any arrangements, commitments or understandings
to issue any shares of the Companys capital stock except
in connection with the Companys existing stock option and
purchase plans, the Companys Existing 4% Notes and
the Companys Existing 13% Notes and the Exchange
Offers.
The Board of Directors is not currently aware of any attempt to
take over or acquire the Company. While it may be deemed to have
potential anti-takeover effects, the proposed amendment to
increase the authorized common stock is not prompted by any
specific effort or takeover threat currently perceived by
management.
As of October 2, 2010, after giving effect to the Reverse
Split, there were:
|
|
|
|
|
120.0 million shares of the Companys common stock
authorized;
|
|
|
|
approximately 34.8 million shares of the Companys
common stock issued and outstanding;
|
|
|
|
approximately 0.7 million shares of common stock underlying
options outstanding at a weighted average exercise price of
$24.60 per share;
|
|
|
|
approximately 1.8 million shares of the Companys
common stock reserved and available for future issuance or
future grant under the Companys 2000 Stock Option and
Incentive Plan;
|
|
|
|
approximately 0.2 million shares of common stock reserved
and available for future issuance or future grant under the
Companys 2000 Employee Stock Purchase Plan;
|
17
|
|
|
|
|
approximately 14.4 million shares reserved for issuance
upon the conversion of the Companys outstanding Existing
13% Notes, in the aggregate principal amount of
$165,000,000;
|
|
|
|
no shares of the Companys preferred stock issued and
outstanding and no shares of the Companys common stock
reserved for issuance upon the conversion of shares of the
Companys preferred stock; and
|
|
|
|
approximately 68.1 million shares of the Companys
common stock which are authorized, unreserved and unissued.
|
The proposed amendment to the Companys Certificate of
Incorporation will not change the number of authorized shares of
preferred stock.
We believe that the increase in the number of authorized shares
of common stock is in the best interests of the Company and its
stockholders.
Vote
Required and Recommendation of the Board of Directors
The affirmative vote of a majority of the outstanding shares of
the Companys common stock voting is required to approve
the proposed amendment of the Companys Certificate of
Incorporation. Abstentions have the same effect as a vote
against this proposal.
THE BOARD OF DIRECTORS HAS ADOPTED A RESOLUTION APPROVING THE
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION AND DECLARING ITS
ADVISABILITY AS SET FORTH IN PROPOSAL NO. 2. THE BOARD
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
APPROVAL OF PROPOSAL NO. 2.
MATERIAL
TERMS OF THE EXCHANGE OFFERS
This section is hereby amended and restated as follows:
MATERIAL
TERMS OF THE EXCHANGE OFFERS
The description of the terms of, and reasons for, the
Exchange Offers set forth herein is included for informational
purposes to stockholders in connection with this proxy
solicitation and does not constitute an offer to sell or a
solicitation of an offer to buy any securities of the
Company.
Terms and
Conditions of the Exchange Offers and Consent
Solicitation
In the Exchange Offers, the Company is offering to exchange
(i) an aggregate principal amount of up to $100,000,000 of
New 4% Notes for an aggregate principal amount of up to
$200,000,000 of Existing 4% Notes and (ii) an
aggregate principal amount of up to $165,000,000 of New
7.5% Notes for an aggregate principal amount of up to
$165,000,000 of Existing 13% Notes. The amount of New
4% Notes to be issued will be determined by the modified
Dutch auction procedures discussed below. The
exchange offer for the Existing 13% Notes is referred to
herein as the 13% Exchange Offer.
The exchange offer for the Existing 4% Notes (the 4%
Exchange Offer) is being conducted as a modified
Dutch auction pursuant to which holders of Existing
4% Notes will have the opportunity to specify an exchange
ratio at which they would be willing to exchange Existing
4% Notes for New 4% Notes. Holders must submit tenders
in the range from $425 principal amount (the 4% Minimum
Exchange Ratio) to $500 principal amount of New
4% Notes that would be issued for each $1,000 principal
amount of Existing 4% Notes surrendered for exchange by
such holder.
The Company will accept Existing 4% Notes tendered
beginning with the 4% Minimum Exchange Ratio and continuing in
order of increasing increments of $2.50 in New 4% Notes per
$1,000 principal amount of Existing 4% Notes, until the
aggregate principal amount of accepted Existing 4% Notes
tendered equals $200,000,000 (including any subsequent increase
in such amount, the 4% Maximum Amount). The highest
exchange ratio specified with respect to Existing 4% Notes
accepted for exchange in this process is referred to as the
4% Clearing Exchange Ratio. If the aggregate
principal amount of Existing 4% Notes tendered in the
18
4% Exchange Offer exceeds the 4% Maximum Amount, all Existing
4% Notes tendered at or below the 4% Clearing Exchange
Ratio will be accepted on a pro rata basis up to the 4% Maximum
Amount, and Existing 4% Notes tendered above the 4%
Clearing Exchange Ratio will be rejected. If the aggregate
principal amount of Existing 4% Notes tendered in the 4%
Exchange Offer is less than the 4% Maximum Amount, the Company
will accept all Existing 4% Notes tendered, and the highest
exchange ratio specified with respect to any Existing
4% Notes tendered will be the 4% Clearing Exchange Ratio.
All Existing 4% Notes tendered that the Company accepts
will be paid in New 4% Notes based on the same 4% Clearing
Exchange Ratio.
The
New 4% Notes
Below is a summary of the material terms of the New
4% Notes. For more information on the terms of the New
4% Notes, see the Description of New
4% Notes section of the Companys preliminary
prospectus (the Preliminary Prospectus) forming a
part of the Companys Registration Statement on
Form S-4
filed with the Securities and Exchange Commission on
January 26, 2011. See Where You Can Find Additional
Information for details on how to request a copy of the
Preliminary Prospectus.
Issuer
The New 4% Notes are being issued by Evergreen Solar, Inc.
Securities
Offered
Initially up to $100,000,000 aggregate principal amount of
4% Convertible Subordinated Additional Cash Notes due 2020.
The indenture governing the New 4% Notes will provide that
the Company may issue additional New 4% Notes, which shall
have substantially identical terms as the New 4% Notes.
Stated
Maturity
The New 4% Notes will mature on July 15, 2020, unless
earlier converted, repurchased or redeemed.
Interest
The New 4% Notes will bear interest at a rate of 4% per
annum. Interest will be payable semi-annually in arrears in cash
on January 15 and July 15 of each year, beginning July 15,
2011.
Ranking
The New 4% Notes will be the Companys unsecured
subordinated obligations and will:
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be contractually subordinated in right of payment to all of the
Companys other existing and future senior indebtedness;
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be effectively subordinated to all of the Companys
existing and future secured indebtedness to the extent of the
value of the collateral securing such indebtedness; and
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be structurally subordinated in right of payment to all existing
and future indebtedness and other liabilities of the
Companys subsidiaries.
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The Existing 4% Notes will not constitute senior debt for
purposes of the subordination provisions of the New
4% Notes and the New 4% Notes indenture.
Conversion
Rights
A holder may convert the New 4% Notes at any time from the
date on which the New 4% Notes are originally issued,
referred to as the issue date, until the close of business on
the business day immediately preceding the stated maturity date
and subject to the terms of the indenture governing the New 4%
Notes, in multiples of $1,000 principal amount of New
4% Notes. The initial conversion rate is
229.8851 shares of common stock per $1,000 principal amount
of New 4% Notes (equivalent to an initial conversion price
of approximately $4.35 per share), subject to adjustment.
19
Additional
Amount Upon Conversion
A holder will also receive an additional amount upon conversion
of $300 per $1,000 principal amount of converted New
4% Notes initially paid in shares of the Companys
common stock, with such common stock valued, for conversions at
the holders option, at a price per share equal to 90% of
the lesser of (i) the average of the daily VWAP (as defined
below) for the 10 trading days ending on the date of conversion
and (ii) the daily VWAP on the date of conversion and, for
conversions at the option of the Company, at a price per share
equal to the average daily VWAP for the 10 trading days
beginning two trading days following the notice of conversion.
Notwithstanding the foregoing, in no event will the per share
value used to calculate the number of shares issuable in
connection with the additional amount be less than $3.00,
subject to adjustment. For conversions at a holders
option, the Company may, at its option, pay the additional
amount in cash, or following any such election to pay in cash,
in shares of the Companys common stock, subject to
11 trading days having elapsed following notice of any
election to pay in cash or, following any such cash election,
notice of any election to pay in shares of the Companys
common stock. For conversions at the option of the Company, the
Company may, at its option (with notice of such election in the
notice of conversion) pay the additional amount in cash.
However, the Company may only pay this $300 additional amount in
cash after the Existing 13% Notes and New 7.5% Notes are no
longer outstanding, and in any event subject to the
subordination provisions of the indenture governing the New
4% Notes. At any time after the one year anniversary of the
issue date, the Company may, at its option, terminate the
holders right to receive the additional amount upon
conversion, subject to 20 trading days having elapsed following
notice of such termination.
The VWAP of the Companys common stock on any
trading day means such price as is displayed under the heading
Bloomberg VWAP on Bloomberg page ESLR
<equity> AQR (or its equivalent successor
service or page if such service or page is not available) in
respect of the period from 9:30 a.m. to 4:00 p.m., New
York City time, on such trading day; or, if such price is not
available, the VWAP means the market value of one share of the
Companys common stock on such trading day as determined by
a nationally recognized independent investment banking firm
(which may be an underwriter or dealer manager or one of its
affiliates) retained for this purpose by the Company.
Coupon
Make Whole Payment in Connection with a Voluntary
Conversion
If a holder elects to convert some or all of its New
4% Notes on or prior to January 15, 2015, such holder
will receive a coupon make whole payment for the New
4% Notes being converted. This coupon make whole payment
will be equal to the aggregate amount of interest payments that
would have been payable on such converted New 4% Notes from
the last day through which interest was paid on the New
4% Notes, or the issue date if no interest has been paid,
to and including January 15, 2015.
This coupon make whole payment payable upon a voluntary
conversion will initially be paid in shares of the
Companys common stock, with such common stock valued at a
price per share equal to 90% of the lesser of (i) the
average of the daily VWAP for the 10 trading days ending on the
date of conversion and (ii) the daily VWAP on the date of
conversion. Notwithstanding the foregoing, in no event will the
per share value used to calculate the number of shares issuable
in connection with the coupon make whole payment be less than
$3.00, subject to adjustment. The Company may, at its option,
pay the coupon make whole payment payable upon a voluntary
conversion in cash or, following any such election to pay in
cash, in shares of its common stock, subject to 11 trading days
having elapsed following notice of any election to pay in cash
or, following any such cash election, notice of any election to
pay in shares of its common stock. However, the Company may only
make this coupon make whole payment in cash after the Existing
13% Notes and New 7.5% Notes are no longer outstanding, and
in any event subject to the subordination provisions of the
indenture governing the New 4% Notes.
Conversion
at the Option of the Company
The Company may elect to mandatorily convert some or all of the
New 4% Notes if the last reported sale price of the
Companys common stock is greater than or equal to the
trigger price (as defined in the indenture governing the New
4% Notes) for at least 20 trading days during any 30
consecutive trading day period ending
20
within five trading days prior to the notice of conversion. The
trigger price will be determined based on a formula set forth in
the indenture governing the New 4% Notes. By way of
illustration, if the applicable conversion rate then in effect
was 229.8851 shares of common stock per $1,000 principal
amount of New 4% Notes, and the 4% Clearing Exchange Ratio
was $500 principal amount of New 4% Notes issued for each
$1,000 principal amount of Existing 4% Notes surrendered
for exchange, the resulting trigger price would be $7.39.
If the Company elects to convert some or all of the New
4% Notes on or prior to January 15, 2015, holders will
receive the coupon make whole payment for the New 4% Notes
being converted.
This coupon make whole payment payable in connection with a
mandatory conversion will initially be paid in shares of the
Companys common stock, with such common stock valued at a
price per share equal to the average of the daily VWAP for the
10 trading days beginning two trading days following the notice
of conversion. Notwithstanding the foregoing, in no event will
the per share value used to calculate the number of shares
issuable in connection with the coupon make whole payment be
less than $3.00, subject to adjustment. The Company may, at its
option (with notice of such election in the notice of
conversion), pay the coupon make whole payment payable in
connection with a mandatory conversion in cash. However, the
Company may only make this coupon make whole payment in cash
after the Existing 13% Notes and New 7.5% Notes are no
longer outstanding, and in any event subject to the
subordination provisions of the indenture governing the New
4% Notes.
Limitations
on Conversion
The Company will not effect any conversion of the New
4% Notes (including any conversion pursuant to Conversion
at the Option of the Company), and holders of the New
4% Notes will not have the right to convert any portion of
the New 4% Notes, in excess of that portion of the New
4% Notes on conversion of which the sum of (1) the
number of shares of the Companys common stock beneficially
owned by a holder and its affiliates (other than shares of the
Companys common stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the
New 4% Notes or the unexercised or unconverted portion of
any of the Companys other securities beneficially owned by
such holder or its affiliates subject to a limitation on
exercise or conversion analogous to the limitations described in
this Limitations on Conversion) and (2) the number of
shares of the Companys common stock issuable upon the
conversion of the portion of the New 4% Notes with respect
to which the determination set forth in this sentence is being
made (including any shares related to the settlement of the
Coupon Make Whole Payment and the Additional Amount in
connection therewith), would result in beneficial ownership by
such holder and its affiliates of any amount greater than 9.9%
of the then issued and outstanding shares of the Companys
common stock.
Any purported delivery of shares of the Companys common
stock upon exercise of the conversion right on the New
4% Notes will be void and have no effect to the extent (but
only to the extent) that such delivery would result in a holder
(including its affiliates) becoming the beneficial owner of more
than 9.9% of the shares of the Companys common stock
outstanding at such time.
Notwithstanding anything to the contrary in this Limitations on
Conversion, no holder will be entitled, with or without the
Companys consent, to waive the restrictions set forth in
this Limitations on Conversion.
In the event the Company is unable to exercise its option (as
described under Conversion at the Option of the Company) to
convert some or all of the New 4% Notes of any holder due
to the limitations described above, then the Company will have
the right at any time to redeem the New 4% Notes held by
such holder that the Company is not permitted to convert;
provided, however, that the Company may only redeem the New
4% Notes after its Existing 13% Notes and New 7.5%
Notes are no longer outstanding, and in any event subject to the
subordination provisions of the New 4% Notes indenture. If
the Company elects to redeem such New 4% Notes from such
holder, the redemption shall be made in accordance with and
pursuant to the provisions set forth under Optional Redemption.
In addition, the holder will retain its right to voluntarily
convert such holders New 4% Notes.
21
Fundamental
Change Permits Holders to Require Us to Purchase New
4% Notes
A holder may require the Company to purchase such holders
New 4% Notes for cash upon a fundamental change (as defined
in the indenture governing the New 4% Notes) at a purchase
price equal to 100% of the principal amount of the New
4% Notes, plus accrued and unpaid interest (including
additional interest, if any) to, but excluding, the purchase
date, subject to certain conditions. Generally, a fundamental
change will be deemed to occur upon a change of control of the
Company or failure of the Companys common stock to be
listed on a U.S. national securities exchange.
Optional
Redemption
Prior to January 15, 2015, the Company may not redeem the
New 4% Notes, except in the limited circumstances described
under Limitations on Conversion. On or after January 15,
2015, the Company may redeem for cash some or all of the New
4% Notes at its option at a price equal to 100% of the
principal amount of the New 4% Notes being redeemed, plus
accrued and unpaid interest (including additional interest, if
any) to, but excluding, the redemption date. The Company may
only redeem the New 4% Notes after the Existing
13% Notes and New 7.5% Notes are no longer outstanding, and
in any event subject to the subordination provisions of the
indenture governing the New 4% Notes.
Trustee
U.S. Bank National Association
Material
Differences between the New 4% Notes and the Existing
4% Notes
The table below sets forth material differences between the New
4% Notes and the Existing 4% Notes.
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New 4% Notes
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Existing 4% Notes
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Stated Maturity
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July 15, 2020
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July 15, 2013
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Ranking
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The New 4% Notes will be unsecured subordinated obligations
of the Company.
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The Existing 4% Notes are senior unsecured obligations of
the Company.
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Conversion Price
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Approximately $4.35 (equivalent to a conversion rate of
229.8851 shares of common stock per $1,000 principal amount
of New 4% Notes).
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Approximately $72.67 (equivalent to a conversion rate of
13.7599 shares of common stock per $1,000 principal amount
of Existing 4% Notes).
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Additional Amount Upon Conversion
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The Company will pay an additional amount of $300 upon
conversion, payable in cash or shares of common stock at the
Companys option, subject to certain limitations. The
Company may only pay this additional amount in cash after its
Existing 13% Notes and New 7.5% Notes are no longer outstanding,
and in any event subject to the subordination provisions of the
New 4% Notes indenture.
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Not applicable
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New 4% Notes
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Existing 4% Notes
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Coupon Make Whole Payment Upon Conversion
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The New 4% Notes will have a coupon make whole payment
payable, at the Companys option, in either cash or shares
of common stock, subject to certain limitations, upon conversion
on or prior to January 15, 2015. The Company may only make this
coupon make whole payment in cash after its Existing 13% Notes
and New 7.5% Notes are no longer outstanding, and in any event
subject to the subordination provisions of the New 4% Notes
indenture.
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Not applicable
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Payment of Interest Upon Conversion
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Upon conversions on or prior to January 15, 2015, holders of
converted New 4% Notes will receive a Coupon Make Whole
Payment (described above). For conversions after January 15,
2015, holders of converted New 4% Notes will receive
accrued and unpaid interest on such notes, subject to certain
conditions.
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Upon any conversion, subject to certain exceptions, holders of
Existing 4% Notes will not receive any payment representing
accrued and unpaid interest.
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Companys Option To Convert
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The New 4% Notes will be convertible at the option of the
Company in certain circumstances.
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Not applicable
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New 4% Notes
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Existing 4% Notes
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Limitations on Conversion
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The Company will not effect any conversion of the New
4% Notes (including any conversion pursuant to Conversion
at the Option of the Company), and holders of the New
4% Notes will not have the right to convert any portion of
the New 4% Notes, in excess of that portion of the New
4% notes on conversion of which the sum of (1) the
number of shares of the Companys common stock beneficially
owned by a holder and its affiliates (other than shares of the
Companys common stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the
New 4% Notes or the unexercised or unconverted portion of
any of the Companys other securities beneficially owned by
such holder or its affiliates subject to a limitation on
exercise or conversion analogous to the limitations described in
this Limitations on Conversion) and (2) the number of
shares of the Companys common stock issuable upon the
conversion of the portion of the New 4% Notes with respect
to which the determination set forth in this sentence is being
made (including any shares related to the settlement of the
Coupon Make Whole Payment and the Additional Amount in
connection therewith), would result in beneficial ownership by
such holder and its affiliates of any amount greater than 9.9%
of the then issued and outstanding shares of the Companys
common stock.
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Not applicable
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New 4% Notes
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Existing 4% Notes
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Any purported delivery of shares of the Companys common
stock upon exercise of the conversion right on the New
4% Notes will be void and have no effect to the extent (but
only to the extent) that such delivery would result in a holder
(including its affiliates) becoming the beneficial owner of more
than 9.9% of the shares of the Companys common stock
outstanding at such time.
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Notwithstanding anything to the contrary in this Limitations on
Conversion, no holder will be entitled, with or without the
Companys consent, to waive the restrictions set forth in
this Limitations on Conversion.
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In the event the Company is unable to exercise its option (as
described under Conversion at the Option of the Company) to
convert some or all of the New 4% Notes of any holder due
to the limitations described above under Limitations on
Conversion, then the Company will have the right at any time to
redeem the New 4% Notes held by such holder that the
Company is not permitted to convert. The Company may only redeem
the New 4% Notes after its Existing 13% Notes and New
7.5% Notes are no longer outstanding, and in any event subject
to the subordination provisions of the New 4% Notes
indenture.
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New 4% Notes
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Existing 4% Notes
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Companys Option to Redeem
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The Company may redeem the New 4% Notes on or after January
15, 2015, subject to certain limitations. The Company may only
redeem the New 4% Notes after its Existing 13% Notes and New
7.5% Notes are no longer outstanding, and in any event subject
to the subordination provisions of the New 4% Notes indenture.
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Not applicable
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Conversion Rate Increase Upon a Fundamental Change
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Not applicable
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The Existing 4% Notes have a conversion rate increase upon
a fundamental change.
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Holders Option to Convert
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The New 4% Notes will be convertible at any time prior to
maturity at the holders option.
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The Existing 4% Notes are only convertible in certain
circumstances.
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The
New 7.5% Notes
Below is a summary of the material terms of the New
7.5% Notes. For more information on the terms of the New
7.5% Notes, see the Description of New
7.5% Notes section of the Preliminary Prospectus.
Issuer
The New 7.5% Notes are being issued by Evergreen Solar, Inc.
Securities
Offered
Up to $165,000,000 aggregate principal amount of
7.5% Convertible Senior Notes due 2017.
Stated
Maturity
The New 7.5% Notes mature on April 15, 2017, unless
earlier converted, repurchased or redeemed.
Interest
The New 7.5% Notes will bear interest at a rate of 7.5% per
annum. Interest will be payable semi-annually in arrears in cash
on April 15 and October 15 of each year, beginning
April 15, 2011.
Ranking
The New 7.5% Notes and the note guaranties will be the
Companys and the guarantors general senior secured
obligations and will:
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rank senior in right of payment to all of the Companys and
the guarantors existing and future indebtedness that is,
by its terms, expressly subordinated in right of payment to the
New 7.5% Notes and the Note Guaranties;
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rank
pari passu
in right of payment with all of the
Companys and the guarantors existing and future
indebtedness that is not so subordinated;
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be effectively
pari passu
in right of payment to any of
the Companys and the guarantors secured indebtedness
to the extent of the shared security interest in the same
collateral securing the New 7.5% Notes and the note guaranties;
and
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be structurally subordinated in right of payment to all existing
and future indebtedness and other liabilities of the
Companys non-guarantor subsidiaries.
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Conversion
Rights
A Holder may convert its New 7.5% Notes at any time from
the date on which the New 7.5% Notes are originally issued,
referred to as the issue date, until the close of business on
the business day immediately preceding the stated maturity date
and subject to the terms of the indenture governing the New 7.5%
Notes, in multiples of $1,000 principal amount of New
7.5% Notes. The initial conversion rate is 250 shares
of common stock per $1,000 principal amount of New
7.5% Notes (equivalent to an initial conversion price of
approximately $4.00 per share), subject to adjustment.
Coupon
Make Whole Payment in Connection with a Voluntary
Conversion
If a holder elects to convert some or all of its New
7.5% Notes on or prior to April 15, 2015, such holder
will receive a coupon make whole payment for the New
7.5% Notes being converted. This coupon make whole payment
will be equal to the aggregate amount of interest payments that
would have been payable on such converted New 7.5% Notes
from the last day through which interest was paid on the New
7.5% Notes, or the issue date if no interest has been paid,
to and including April 15, 2015.
This coupon make whole payment payable upon a voluntary
conversion will initially be paid in shares of the
Companys common stock to the extent that, at the time of
such conversion, the Company has a sufficient number of
authorized and unissued shares that have not been reserved for
other purposes (or in cash if the Company does not then have a
sufficient number of such shares), with such common stock valued
at a price per share equal to 90% of the lesser of (i) the
average of the daily VWAP for the 10 trading days ending on the
date of conversion and (ii) the daily VWAP on the date of
conversion. Notwithstanding the foregoing, in no event will the
per share value used to calculate the number of shares issuable
in connection with the coupon make whole payment be less than
$3.00, subject to adjustment. The Company may, at its option,
pay the coupon make whole payment payable upon a voluntary
conversion in cash or, following any such election to pay in
cash, in shares of its common stock, subject to 11 trading days
having elapsed following notice of any election to pay in cash
or, following any such cash election, notice of any election to
pay in shares of its common stock. However, if more than fifty
percent but less than seventy-five percent of the Existing 13%
Notes are accepted for exchange in the 13% Exchange Offer, and
if Proposal No. 2 (increase in authorized stock) is
approved, then while our existing 13% notes are outstanding
we may not make this Coupon Make Whole payment in cash, and if
Proposal No. 2 (increase in authorized stock) is not
approved, while the Existing 13% Notes are outstanding the
Company may only make this coupon make whole payment in cash if
it does not then have a sufficient number of authorized and
unissued shares that have not been reserved for other purposes.
Conversion
at the Option of the Company
The Company may elect to mandatorily convert some or all of the
New 7.5% Notes if the last reported sale price of its
common stock is greater than or equal to 150% of the conversion
price of the New 7.5% Notes for at least 20 trading days
during any 30 consecutive trading day period ending within five
trading days prior to the notice of conversion.
If the Company elects to convert some or all of the New
7.5% Notes on or prior to April 15, 2015, holders will
receive the coupon make whole payment for the New
7.5% Notes being converted.
This coupon make whole payment payable in connection with a
mandatory conversion will initially be paid in shares of the
Companys common stock to the extent that, at the time of
such conversion, the Company has a sufficient number of
authorized and unissued shares that have not been reserved for
other purposes (or in cash if the Company does not then have a
sufficient number of such shares), with such common stock valued
at a price per share equal to the average of the daily VWAP for
the 10 trading days beginning two trading days following the
date of the notice of conversion. Notwithstanding the foregoing,
in no event will the per share value used to calculate the
number of shares issuable in connection with the coupon make
whole
27
payment be less than $3.00, subject to adjustment. The Company
may, at its option (with notice of such election in the notice
of conversion), pay the coupon make whole payment payable in
connection with a mandatory conversion in cash. However, if more
than fifty percent but less than seventy-five percent of the
Existing 13% Notes are accepted for exchange in the 13% Exchange
Offer, and if Proposal No. 2 (increase in authorized
stock) is approved, then while our existing 13% notes are
outstanding we may not make this Coupon Make Whole payment in
cash, and if Proposal No. 2 (increase in authorized stock)
is not approved, while the Existing 13% Notes are outstanding
the Company may only make this coupon make whole payment in cash
if it does not then have a sufficient number of authorized and
unissued shares that have not been reserved for other purposes.
Limitations
on Conversion
The Company will not effect any conversion of the New
7.5% Notes (including any conversion pursuant to Conversion
at the Option of the Company), and holders of the New
7.5% Notes will not have the right to convert any portion
of the New 7.5% Notes, in excess of that portion of the
N
ew 7.5% Notes on conversion of which the sum of
(1) the number of shares of the Companys common stock
beneficially owned by a holder and its affiliates (other than
shares of the Companys common stock which may be deemed
beneficially owned through the ownership of the unconverted
portion of the New 7.5% Notes or the unexercised or
unconverted portion of any of the Companys other
securities beneficially owned by such holder or its affiliates
subject to a limitation on exercise or conversion analogous to
the limitations described in this Limitations on Conversion) and
(2) the number of shares of the Companys common stock
issuable upon the conversion of the portion of the New
7.5% Notes with respect to which the determination set
forth in this sentence is being made (including any shares
related to the settlement of the Coupon Make Whole Payment in
connection therewith), would result in beneficial ownership by
such holder and its affiliates of any amount greater than 9.9%
of the then issued and outstanding shares of the Companys
common stock.
Notwithstanding anything to the contrary in this Limitations on
Conversion, no holder will be entitled, with or without the
Companys consent, to waive the restrictions set forth in
this Limitations on Conversion.
Any purported delivery of shares of the Companys common
stock upon exercise of the conversion right on the New
7.5% Notes will be void and have no effect to the extent
(but only to the extent) that such delivery would result in a
holder (including its affiliates) becoming the beneficial owner
of more than 9.9% of the shares of the Companys common
stock outstanding at such time.
In the event the Company is unable to exercise its option (as
described under Conversion at the Option of the Company) to
convert some or all of the New 7.5% Notes of any holder due
to the limitations described above, then the Company will have
the right at any time to redeem the New 7.5% Notes held by
such holder that the Company is not permitted to convert;
provided, however, if more than fifty percent but less than
seventy-five percent of the Existing 13% Notes are accepted
for exchange in the 13% Exchange Offer, then the Company may
only redeem the New 7.5% Notes after the Existing
13% Notes are no longer outstanding. If the Company elects
to redeem such New 7.5% Notes from such holder, the
redemption shall be made in accordance with and pursuant to the
provisions set forth under Optional Redemption. In addition, the
holder will retain its right to voluntarily convert such
holders New 7.5% Notes.
Fundamental
Change Permits Holders to Require Us to Purchase New
7.5% Notes
A holder may require the Company to purchase such holders
New 7.5% Notes for cash upon a fundamental change (as
defined in the indenture governing the New 7.5% Notes) at a
purchase price equal to 100% of the principal amount of the New
7.5% Notes, plus accrued and unpaid interest (including
additional interest, if any) to, but excluding, the purchase
date, subject to certain conditions. Generally, a fundamental
change will be deemed to occur upon a change of control of the
Company or failure of the Companys common stock to be
listed on a U.S. national securities exchange.
28
Optional
Redemption
Prior to April 15, 2015, the Company may not redeem the New
7.5% Notes, except in the limited circumstances described
under Limitations on Conversion. On or after April 15,
2015, the Company may redeem for cash some or all of the New
7.5% Notes at its option at a price equal to 100% of the
principal amount of the New 7.5% Notes being redeemed, plus
accrued and unpaid interest (including additional interest, if
any) to, but excluding, the redemption date. However, if more
than fifty percent but less than seventy-five percent of the
Existing 13% Notes are accepted for exchange in the 13%
Exchange Offer, then the Company may only redeem the New
7.5% Notes after the Existing 13% Notes are no longer
outstanding.
Note
Guaranties
The New 7.5% Notes will be fully and unconditionally
guaranteed on a senior secured basis by each of the
Companys existing and future direct and indirect wholly
owned domestic subsidiaries that are not excluded subsidiaries.
ESLR1, LLC, which currently provides a guaranty with respect to
the Existing 13% Notes, will be merged with and into the
Company prior to the issue date, which means that as of the
issue date none of the Companys subsidiaries will provide
a guaranty of the Existing 13% Notes or New 7.5% Notes.
Security
The New 7.5% Notes and any future note guaranties will be
secured by a first-priority lien on substantially all of the
assets of the Company and the guarantors, other than excluded
property. If the Company does not receive the consent of holders
of at least seventy-five percent of the outstanding principal
amount of the Existing 13% Notes in the Consent
Solicitation, the Existing 13% Notes will continue to be
secured obligations, and the Existing 13% Notes and the New
7.5% Notes will be ratably secured by first-priority liens
granted by the Company and the guarantors on substantially all
assets owned by the Company and the guarantors, other than
excluded property.
Certain
Covenants
The indenture governing the New 7.5% Notes will restrict
the Companys ability and the ability of the Companys
subsidiaries to:
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incur additional indebtedness and issue certain preferred stock;
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make certain payments or investments;
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sell assets;
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create liens on assets; and
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consolidate, merge, sell or otherwise dispose of all or
substantially all of the Companys and the Companys
subsidiaries assets taken as a whole.
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However, these limitations will be subject to a number of
important qualifications and exceptions.
Trustee
and Collateral Agent
U.S. Bank National Association
29
Material
Differences between the New 7.5% Notes and the Existing
13% Notes
The table below sets forth material differences between the New
7.5% Notes and the Existing 13% Notes.
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New 7.5% Notes
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Existing 13% Notes
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Stated Maturity
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April 15, 2017
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April 15, 2015
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Interest
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7.5% per annum
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13.0% per annum
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Ranking
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The new 7.5% notes and the note guaranties will be the Companys and the guarantors general senior secured obligations and will:
rank senior in right of payment to all of the Companys and the guarantors existing and future indebtedness that is, by its terms, expressly subordinated in right of payment to the New 7.5% Notes and the note guaranties;
rank
pari passu
in right of payment with all of the Companys and the guarantors existing and future indebtedness that is not so subordinated;
be effectively
pari passu
in right of payment to any of the Companys and the guarantors secured indebtedness to the extent of the shared security interest in the same collateral securing the New 7.5% Notes and the note guaranties; and
be structurally subordinated in right of payment to all existing and future indebtedness and other liabilities of the Companys non-guarantor subsidiaries.
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The Existing 13% Notes are senior secured obligations of
the Company and have the benefit of typical restrictive
covenants (subject to completion of the Consent Solicitation,
described below). If the 13% Exchange Offer and Consent
Solicitation are successful, and the Company receives the
consent of holders of more than fifty percent but less than
seventy-five percent of the outstanding principal amount of the
Existing 13% Notes, the Existing 13% Notes and the
note guaranties will continue to be secured obligations and the
Existing 13% Notes and the New 7.5% Notes will be
ratably secured by first-priority liens granted by the Company
and the guarantors on substantially all assets owned by us and
the guarantors, other than certain excluded property. If the 13%
Exchange Offer and Consent Solicitation are successful and the
Company receives the consent of holders of at least seventy-five
percent of the outstanding principal amount of the Existing
13% Notes, the Existing 13% Notes and the note guaranties
will no longer be secured obligations and the security interest
and all of the collateral securing the Companys
obligations under the Existing 13% Notes will be released,
the existing collateral documents will be terminated and
eliminate many of the restrictive covenants and certain events
of default in the 13% Indenture will be eliminated).
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New 7.5% Notes
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Existing 13% Notes
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Note Guaranties
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The New 7.5% Notes will be fully and unconditionally
guaranteed on a senior secured basis by each of the
Companys existing and future direct and indirect wholly
owned domestic subsidiaries that are not excluded subsidiaries.
ESLR1, LLC, which currently provides a guaranty with respect to
the Existing 13% Notes, will be merged with and into the
Company prior to the issue date, which means that on the issue
date, none of the Companys subsidiaries will provide a
guaranty of the New 7.5% Notes.
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The Existing 13% Notes are fully and unconditionally
guaranteed on a senior secured basis by the Companys
domestic subsidiaries that are not excluded subsidiaries.
Currently, only ESLR1, LLC has provided a guaranty of the
Existing 13% Notes.
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Security
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The New 7.5% Notes and any future note guaranties will be
secured by a first-priority lien on substantially all of the
assets of the Company and the guarantors, other than excluded
property. If the Company does not receive the consent of holders
of at least seventy-five percent of the outstanding principal
amount of the Existing 13% Notes in the consent
solicitation, the Existing 13% Notes will continue to be
secured obligations, and the Existing 13% Notes and the New
7.5% Notes will be ratably secured by first-priority liens
granted by us and the guarantors on substantially all assets
owned by us and the guarantors, other than certain excluded
property.
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The Existing 13% Notes and the note guaranties are secured
by a first priority lien on substantially all of the assets of
the Company and the guarantors other than excluded property. If
the Exchange Offers and Consent Solicitation are successful and
the Company receives the consent of holders of more than fifty
percent but less than seventy-five percent of the outstanding
principal amount of the Existing 13% Notes, the Existing
13% Notes and the note guaranties will continue to be
secured obligations. If the Exchange Offers and Consent
Solicitation are successful and we receive the consent of
holders of at least seventy-five percent of the outstanding
principal amount of the Existing 13% Notes, the Existing
13% Notes and the note guaranties will no longer be secured
obligations.
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New 7.5% Notes
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Existing 13% Notes
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Certain Covenants
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The indenture governing the New 7.5% Notes will restrict
the Companys ability and the ability of its subsidiaries
to:
incur additional indebtedness and issue
certain preferred stock;
make certain payments or investments;
sell assets;
create liens on assets; and
consolidate, merge, sell or otherwise
dispose of all or substantially all of the Companys and
its subsidiaries assets taken as a whole.
However, these limitations will be subject to a number of
important qualifications and exceptions.
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The indenture governing the Existing 13% Notes restricts
the Companys ability and the ability of its subsidiaries
to:
incur additional indebtedness and issue
certain preferred stock;
make certain payments or investments;
sell assets;
create liens on assets; and
consolidate, merge, sell or otherwise
dispose of all or substantially all of the Companys and
its subsidiaries assets taken as a whole.
However, these limitations are subject to a number of important
qualifications and exceptions. If the 13% Exchange Offer and
Consent Solicitation are successful, and the Company receives
the consent of holders of more than fifty percent but less than
seventy-five percent of the outstanding principal amount of the
Existing 13% Notes, the Existing 13% Notes and the
note guaranties will continue to be secured obligations. If the
Exchange Offers and Consent Solicitation are successful and the
Company receives the consent of holders of at least seventy-five
percent of the outstanding principal amount of the Existing
13% Notes, the Existing 13% Notes and the note
guaranties will no longer be secured obligations.
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Conversion Price
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Approximately $4.00 per share (equivalent to a conversion rate
of 250 shares of common stock per $1,000 principal amount
of New 7.5% Notes).
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Approximately $11.42 (equivalent to a conversion rate of
87.5410 shares of common stock per $1,000 principal amount
of Existing 13% Notes).
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New 7.5% Notes
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Existing 13% Notes
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Coupon Make Whole Payment Upon Conversion
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The New 7.5% Notes will have a coupon make whole payment
payable, at the Companys option, in either cash or shares
of common stock, subject to certain limitations, upon conversion
on or prior to April 15, 2015. However, if more than fifty
percent but less than seventy-five percent of the Existing 13%
Notes are accepted for exchange in the 13% Exchange Offer, and
if Proposal No. 2 (increase in authorized stock) is
approved, then while our existing 13% notes are outstanding
we may not make this Coupon Make Whole payment in cash, and if
Proposal No. 2 (increase in authorized stock) is not
approved, while the Existing 13% Notes are outstanding the
Company may only make this coupon make whole payment in cash if
it does not then have a sufficient number of authorized and
unissued shares that have not been reserved for other purposes.
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Not applicable
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Payment of Interest Upon Conversion
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Upon conversions on or prior to April 15, 2015, holders of
converted New 7.5% Notes will receive a Coupon Make Whole
Payment (described above). For conversions after April 15, 2015,
holders of converted New 7.5% Notes will receive accrued
and unpaid interest on such notes, subject to certain conditions.
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Upon any conversion, subject to certain exceptions, holders of
Existing 7.5% Notes will not receive any payment
representing accrued and unpaid interest.
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Companys Option To Convert
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The New 7.5% Notes will be convertible at the option of the
Company in certain circumstances.
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Not applicable
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33
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New 7.5% Notes
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Existing 13% Notes
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Limitations on Conversion
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The Company will not effect any conversion of the New 7.5% Notes
(including any conversion pursuant to Conversion at the Option
of the Company), and holders of the New 7.5% Notes will not have
the right to convert any portion of the New 7.5% Notes, in
excess of that portion of the New 7.5% notes on conversion
of which the sum of (1) the number of shares of the
Companys common stock beneficially owned by a holder and
its affiliates (other than shares of the Companys common
stock which may be deemed beneficially owned through the
ownership of the unconverted portion of the New 7.5% Notes
or the unexercised or unconverted portion of any of the
Companys other securities beneficially owned by such
holder or its affiliates subject to a limitation on exercise or
conversion analogous to the limitations described in this
Limitations on Conversion) and (2) the number of shares of
the Companys common stock issuable upon the conversion of
the portion of the New 7.5% Notes with respect to which the
determination set forth in this sentence is being made
(including any shares related to the settlement of the Coupon
Make Whole Payment in connection therewith), would result in
beneficial ownership by such holder and its affiliates of any
amount greater than 9.9% of the then issued and outstanding
shares of the Companys common stock.
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Not applicable
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34
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New 7.5% Notes
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Existing 13% Notes
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Any purported delivery of shares of the Companys common
stock upon exercise of the conversion right on the New
7.5% Notes will be void and have no effect to the extent
(but only to the extent) that such delivery would result in a
holder (including its affiliates) becoming the beneficial owner
of more than 9.9% of the shares of the Companys common
stock outstanding at such time.
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Notwithstanding anything to the contrary in this Limitations on
Conversion, no holder will be entitled, with or without the
Companys consent, to waive the restrictions set forth in
this Limitations on Conversion.
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In the event the Company is unable to exercise its option (as
described under Conversion at the Option of the Company) to
convert some or all of the New 7.5% Notes of any holder due
to the limitations described above under Limitations on
Conversion, then the Company will have the right at any time to
redeem the New 7.5% Notes held by such holder that the
Company is not permitted to convert. However, if less than
seventy-five percent of the Existing 13% Notes are accepted
for exchange in the 13% Exchange Offer, then the Company may
only redeem the New 7.5% Notes after the Existing
13% Notes are no longer outstanding.
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Companys Option to Redeem
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The Company will have the option to redeem the New
7.5% Notes on or after April 15, 2015. However, if less
than seventy-five percent of the Existing 13% Notes are
accepted for exchange in the 13% Exchange Offer, the Company may
only redeem the New 7.5% Notes after the Existing
13% Notes are no longer outstanding.
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Not applicable
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35
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New 7.5% Notes
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Existing 13% Notes
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Conversion Rate Increase Upon a Fundamental Change
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Not applicable
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The Existing 13% Notes have a conversion rate increase
payable upon a fundamental change in certain circumstances.
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Purchase at Holders Option on a Specified Date
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Not applicable
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Holders of the Existing 13% Notes may require the Company
to repurchase all or a portion of such holders Existing
13% Notes on April 15, 2013, subject to certain
conditions. If more than $199,207,000 in aggregate principal
amount of Existing 4% Notes are tendered in the 4% Exchange
Offer, less than $50,000,000 aggregate principal amount of
Existing 4% Notes will remain outstanding and holders of
Existing 13% Notes will no longer have the ability to
require us to purchase all or a portion of such holders
Existing 13% Notes.
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The Company is not in default in payment of principal or
interest with respect to either the Existing 4% Notes or
the Existing 13% Notes.
Consent
Solicitation
As part of the 13% Exchange Offer, the Company is soliciting the
consent of holders of the requisite principal amount outstanding
of the Existing 13% Notes necessary to amend certain terms
and conditions of the 13% Indenture. The proposed amendments to
the indenture for the Existing 13% Notes, or 13% Notes
Indenture, will be contained in a first supplemental indenture,
or the 13% Supplemental Indenture. The nature and extent of the
proposed amendments will depend on whether the Company receives
the consent of holders of more than fifty percent but less than
seventy-five percent of the outstanding principal amount of the
Existing 13% Notes or the consent of holders of at least
seventy-five percent of the outstanding principal amount of the
Existing 13% Notes. If the Company receives the consent of
holders of more than fifty percent but less than seventy-five
percent of the outstanding principal amount of the Existing
13% Notes, the proposed amendments will permit the Company
to incur the indebtedness represented by the New 7.5% Notes,
grant a lien in favor of the holders of the New 7.5% Notes
and permit the Existing 13% Notes and the New
7.5% Notes to be ratably secured by first-priority liens
granted by the Company and the guarantors on substantially all
assets owned by the Company and the guarantors, other than
excluded property. If the Company receives the consent of
holders of at least seventy-five percent of the outstanding
principal amount of the Existing 13% Notes, the proposed
amendments, if adopted and effected, will release the security
interest and all of the collateral securing the Companys
obligations under the Existing 13% Notes, terminate the
existing collateral documents and eliminate many of the
restrictive covenants and certain events of default in the
13% Notes Indenture.
The following is a summary of the proposed amendments depending
on whether the Company receives the consent of holders of more
than fifty percent of the outstanding principal amount of the
Existing 13% Notes or the consent of holders of at least
seventy-five percent of the outstanding principal amount of the
Existing 13% Notes.
36
Proposed
Amendments with Consent of Holders of More than Fifty Percent
but Less than Seventy-Five Percent of the Outstanding Principal
Amount of Existing 13% Notes
In order to incur the indebtedness represented by the New
7.5% Notes, grant a lien in favor of the holders of the new
7.5% notes and permit the Companys Existing 13% Notes and
the New 7.5% Notes to be secured by first-priority liens
granted by the Company and the guarantors, on substantially all
of the assets owned by the Company and the guarantors, other
than excluded property, the Company must receive the consent of
holders of a majority of the outstanding principal amount of the
Existing 13% Notes. The following is a summary of the
proposed amendments that will be adopted if the Company receives
the consent of holders of a majority of the outstanding
principal amount of the Existing 13% Notes. It does not
restate the terms of the supplemental indenture containing the
entire terms of the proposed amendments.
The proposed amendments will:
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amend Section 1.01 (Defined Terms) by adding
the following terms in the appropriate alphabetical order:
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2011 Exchange Amount means the aggregate principal
amount of Securities exchanged for 2017 Notes pursuant to the
exchange offer effected by the Company pursuant to the
Prospectus
dated ,
2011, as amended or supplemented.
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2017 Notes shall mean the Companys
7.5% Convertible Senior Secured Notes due 2017.
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2017 Note Guaranty means the guaranty of the 2017
Notes by a guarantor thereto pursuant to the 2017 Notes
Indenture.
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2017 Notes Indenture means the Indenture, dated as
of ,
2011, by and among the Company, the guarantors from time to time
party thereto, and U.S. Bank National Association, as
trustee, as in effect from time to time.
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2017 Notes Trustee means the trustee under the 2017
Notes Indenture.
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2020 Notes means the Companys
4.0% Convertible Subordinated Additional Cash Notes due
2020.
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amend and restate the definition of Collateral Trustee
Agreement in Section 1.01 (Defined Terms)
to read as follows:
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Collateral Trust Agreement means the Amended
and Restated Collateral Trust Agreement, dated as
of ,
2011, among the Company, the Subsidiaries of the Company party
thereto, the 2017 Notes Trustee, the Trustee, and U.S. Bank
National Association, as Collateral Agent, as amended, restated,
supplemented or otherwise modified from time to time.
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amend and restated the definition of Restricted Debt
in Section 1.01 (Defined Terms) as follows:
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Restricted Debt means (a) any
Subordinated Debt, (b) the 2013 Notes, (c) the 2017
Notes, (d) the 2020 Notes, and (e) any Debt permitted
by clauses (3), (6), (12) or (15) of the definition of
Permitted Debt.
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amend the definition of Permitted Liens in
Section 1.01 of the 13% notes indenture by amending
clause (2) thereof to read as follows:
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(2) Liens on the Collateral securing the Securities, the
Note Guaranties and other Obligations under this Indenture and
in respect thereof and any obligations owing to the Trustee or
the Collateral Agent under this Indenture or the Collateral
Documents, and any Liens on the Collateral securing the 2017
Notes, the 2017 Note Guaranties and other obligations under the
2017 Notes Indenture and in respect thereof and any obligations
owing to the 2017 Notes Trustee or the Collateral Agent under
the 2017 Notes Indenture or the Collateral Documents.
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amend and restate the definition of Security
Agreement in Section 1.01 (Defined Terms)
as follows:
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Security Agreement means the Amended and Restated
Security Agreement, dated as
of ,
2011, among the Company, the Guarantors and the Collateral
Agent, as may be amended, restated, supplemented or otherwise
modified from time to time.
37
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amend Section 4.15 of the 13% notes indenture (
Limitation on Debt and Disqualified or Preferred
Stock) by amending clause (b)(2) thereof to read as
follows:
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(2) Debt of the Company pursuant to the Securities in an
aggregate principal amount not to exceed $165,000,000 and Debt
of any Guarantor pursuant to a Note Guaranty of the Securities,
and Debt of the Company pursuant to the 2017 Notes in an
aggregate principal amount not to exceed the 2011 Exchange
Amount, and debt of any Guarantor pursuant to a 2017 Note
Guaranty of the 2017 Notes.
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amend Section 4.18 of the 13% indenture (Limitation
on Investments and Restricted Payments) by adding a new
clause (l) at the end of the section:
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(l) payments in cash to satisfy any interest payments
payable upon conversion of the 2017 Notes.
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if Proposal No. 2 (increase in authorized stock) is
not approved, amend Section 4.18 of the 13% indenture
(Limitation on Investments and Restricted Payments)
by adding a new clause (m) at the end of the section:
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(m) if the Company does not then have a sufficient number
of authorized and unissued shares that have not been reserved
for other purposes, payments in cash to satisfy any Coupon Make
Whole Payment (as defined in the 2017 Notes Indenture) payable
upon conversion of the 2017 Notes.
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provide for the trustee and us to enter into amended and
restated collateral documents with the trustee under the new
7.5% notes.
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Adoption of the proposed amendments described above requires the
receipt of properly executed and unrevoked consents to the
proposed amendments from holders representing a majority in
aggregate principal amount of Existing 13% Notes
outstanding under the 13% Notes Indenture. As of the date
of this prospectus, an aggregate of $165,000,000 in principal
amount of the Existing 13% Notes are considered outstanding
under the 13% Notes Indenture. Accordingly, the Company
must receive consents from holders holding more than $82,500,000
aggregate principal amount of Existing 13% Notes to approve
the proposed amendments described above.
Proposed
Amendments with Consent of Holders of at Least Seventy-Five
Percent of the Outstanding Principal Amount
The following is a summary of the proposed amendments that will
be adopted if the Company receives the consent of holders of at
least seventy-five percent of the outstanding principal amount
of the Existing 13% Notes. It does not restate the terms of
the supplemental indenture containing the entire terms of the
proposed amendments.
If the Company receives the consent of at least seventy-five
percent of the outstanding principal amount of the Existing
13% Notes, the proposed amendments will release the
existing security interest and all of the collateral securing
the Companys obligations under the Existing 13% Notes
indenture and terminate the existing collateral documents. The
13% Supplemental Indenture would, in substance, eliminate the
following restrictive covenants and provisions, and all such
references thereto in their entirety, from the 13% Notes
Indenture:
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the provision titled Limitation on Debt and Disqualified
or Preferred Stock (Section 4.15 of the 13% Notes
Indenture);
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the provision titled Limitation on Liens
(Section 4.16 of the 13% Notes Indenture);
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the provision titled Limitation on Asset Sales
(Section 4.17 of the 13% Notes Indenture);
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the provision titled Limitation on Investments and
Restricted Payments (Section 4.18 of the
13% Notes Indenture); and
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the provision titled Security Interest
(Article IX of the 13% Notes Indenture).
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The proposed amendments will eliminate as an event of default
(as that term is defined in the 13% Notes Indenture) the
failure of Evergreen Solar or its subsidiaries, as the case may
be, to comply with the restrictive covenants and provisions that
are eliminated in their entirety by the 13% Supplemental
Indenture.
38
Adoption of the proposed amendments described above requires the
receipt of properly executed and unrevoked consents to the
proposed amendments from holders representing at least
seventy-five percent in aggregate principal amount of Existing
13% Notes then outstanding under the 13% Notes
Indenture. The Company must receive consents from holders
holding at least $123,750,000 aggregate principal amount of
Existing 13% Notes to approve the proposed amendments. If
the Company receives the consent of at least seventy-five
percent of the outstanding principal amount of the Existing
13% Notes, the proposed amendments described under
Proposed Amendments with Consent of Holders of
More than Fifty Percent but Less than Seventy-Five Percent of
the Outstanding Principal Amount will not be adopted and
only the proposed amendments described under
Proposed Amendments with Consent of Holders of
at Least Seventy-Five Percent of the Outstanding Principal
Amount of Existing 13% Notes will be adopted.
Supplemental
Indenture Effecting the Proposed Amendments
The Company and the trustee for the 13% Notes Indenture
intend to execute and deliver the 13% Supplemental Indenture in
respect of the Existing 13% Notes on or promptly after the
expiration of the Exchange Offers. The 13% Supplemental
Indenture will not become operative until the settlement date.
The Existing 13% Notes indenture, without giving effect to
the proposed amendments, will remain in effect until the
proposed amendments become operative. If the 13% Exchange Offer
and Consent Solicitation are terminated or withdrawn, or
Existing 13% Notes are not purchased thereunder, the
proposed amendments will not become operative.
Put
Right
Successful completion of the Exchange Offers would also
eliminate the right of holders of any Existing 13% Notes to
require the Company to repurchase such holders notes in
2013 under certain conditions. The 13% Indenture provides that a
holder of Existing 13% Notes may require the Company to
repurchase all or a portion of such holders Existing
13% Notes on April 15, 2013, unless less than
$50,000,000 in aggregate principal amount of Existing
4% Notes and any other debt (other than subordinated
debt (as defined in the indenture governing the Existing
13% Notes for this purpose)) used to refinance the Existing
4% Notes is outstanding. If more than $199,207,000
aggregate principal amount of Existing 4% Notes is
exchanged in the 4% Exchange Offer, less than $50,000,000
aggregate principal amount of Existing 4% Notes will remain
outstanding after the close of the Exchange Offers. If this
occurs and Proposal No. 2 is approved holders of
Existing 13% Notes would not be able to require the Company
to repurchase their Existing 13% Notes in April 2013 and
may have to hold such Existing Notes until maturity in 2015, if
not converted into shares of common stock prior to such date.
The Companys obligation to complete the Exchange Offers is
conditioned upon, among other things, stockholder approval of
the issuance of the New Notes (and the issuance of common stock
issuable upon conversion of the New Notes, including shares
issuable with respect to the Coupon Make Whole Payments and, in
the case of the New 4% Notes, with respect to the
Additional Amount) in Proposal No. 1 and receipt of
stockholder approval to increase the Companys authorized
common stock in Proposal No. 2 of this proxy
statement. The condition related to Proposal No. 1 is
non-waivable by the Company. However, the Company may in its
absolute discretion waive the condition related to
Proposal No. 2 and elect to complete the Exchange
Offers. The Exchange Offers are also subject to other customary
closing conditions. Neither of the Exchange Offers is
conditioned on the completion of the other Exchange Offer and
the Company may close either Exchange Offer without closing the
other Exchange Offer. However, the 13% Exchange Offer is
conditioned on the receipt of the requisite consents in the
Consent Solicitation. The Company may in its discretion waive
certain conditions with respect to one or both Exchange Offers
and the Consent Solicitation including with respect to
Proposal No. 2 as described above.
Further details about the terms and conditions of the Exchange
Offers are set forth in the Preliminary Prospectus.
* * *
39
THE
SPECIAL MEETING OF STOCKHOLDERS
The date, time and place of the special meeting of stockholders
of Evergreen Solar, Inc. have not changed and remain as follows:
January 31,
2011
8:30 a.m. EDT
The Courtyard by Marriott
75 Felton Street
Marlboro, Massachusetts 01752
As set forth in the proxy statement as supplemented hereby, at
the special meeting of stockholders, the companys
stockholders will be asked to:
1. approve under the applicable provisions of Nasdaq
Marketplace Rule 5635 the issuance of new
4.0% Convertible Subordinated Additional Cash Notes due
2020 and new 7.5% Convertible Senior Secured Notes due 2017
(and the issuance of common stock issuable upon conversion of
the new 4.0% Convertible Subordinated Additional Cash Notes
due 2020 and the new 7.5% Convertible Senior Notes due
2017, including shares issuable with respect to the Coupon Make
Whole Payments and, in the case of the New 4% Notes, with
respect to the Additional Amount) in connection with the
proposed Exchange Offers;
2. amend our Certificate of Incorporation to increase the
number of authorized common shares from 120,000,000 shares
to 240,000,000 shares, after giving effect to the
1-for-6
reverse stock split approved by the Companys stockholders
at the Companys annual meeting in July 2010, which became
effective on January 1, 2011;
3. consider and vote upon a proposal to approve one or more
adjournments to the Special Meeting if necessary to permit
further solicitation of proxies if there are not sufficient
votes at the time of the Special Meeting to approve the above
proposals; and
4. transact such other business as may properly come before
the meeting or any postponements or adjournments thereof.
The holders of the Companys common stock are entitled to
one vote per share on any proposal presented at the meeting.
Execution of a proxy will not in any way affect a
stockholders right to attend the meeting and vote in
person. Whether you hold shares directly as the stockholder of
record or beneficially in street name, you may direct how your
shares are voted without attending the meeting.
Adjournment of the Special Meeting.
In order
to give stockholders adequate time to consider the additional
disclosures contained in this supplement, the Company will
adjourn the special meeting of stockholders immediately after it
is convened on January 31, 2011. The Company expects to
announce the date, time and location at which the adjourned
meeting will reconvene at the meeting on January 31, 2011
where the adjournment is taken and the Company anticipates
announcing that the special meeting will reconvene on or about
February 9, 2011. As a result of the meeting adjournment,
no substantive matters will be discussed on January 31,
2011 and the Company does not expect shareholders to attend the
meeting in person on that date.
Voting Procedures for Record Holders.
If you
hold a stock certificate in your name for our common stock or if
you have been granted unvested restricted stock awards, you are
the owner of record. If you attend the meeting, you may vote in
person. If you want to vote by proxy, there are three ways you
may vote, each of which is valid under Delaware law, our state
of incorporation:
1. Access the Internet address on the proxy card and follow
the instructions at that site,
2. Call the toll-free telephone number listed in the voting
instructions attached to the proxy card and follow the telephone
prompts, OR
3. Complete, sign, date, and return the enclosed proxy card
to the address provided on the proxy card.
40
Please have the voting form in hand when voting by Internet or
telephone.
Voting Procedures for Shares in Street
Name.
If your shares of our common stock are held
in the name of a brokerage house or financial institution, you
are a beneficial owner and the brokerage house or the financial
institution holding your shares is the record holder. This is
often referred to as being held in street name. You
must follow the voting directions given by the brokerage house
or financial institution.
If you are a beneficial owner like most of our stockholders, you
are not a stockholder of record and may not vote your shares in
person at the Special Meeting unless you obtain a legal
proxy by contacting your brokerage house or other
financial institution holding your shares. Any beneficial owner
who attends the meeting without such a legal proxy will not be
able to vote shares in person at the meeting.
Revocation of Proxy.
Any proxy given pursuant
to this solicitation may be revoked by the person giving it at
any time before it is voted. Proxies may be revoked by:
1. Filing with our Secretary, before the taking of the vote
at the meeting, a written notice of revocation bearing a later
date than the date of the proxy to be revoked,
2. Duly executing a later-dated proxy relating to the same
shares and delivering it to the Secretary of the Company before
the taking of the vote at the meeting, OR
3. Attending the meeting and voting in person (although
attendance at the meeting will not in and of itself constitute a
revocation of a proxy).
Any written notice of revocation or subsequent proxy should be
sent so as to be delivered to Evergreen Solar, Inc., 138
Bartlett Street, Marlboro, MA 01752, Attention: Corporate
Secretary, at or before the taking of the vote at the meeting.
Another proxy card is enclosed for your convenience. If you have
already delivered a properly executed proxy card and do not wish
to change your vote based on the changes to
Proposal No. 1, you do not need to do anything. If you
wish to change your vote or you have not yet delivered a
properly executed proxy card, you should follow the procedures
above to vote your shares.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED
TO VOTE BY PROXY TO ENSURE YOUR VOTE IS COUNTED.
41
EVERGREEN SOLAR, INC. 138 BARTLETT STREET MARLBORO, MA 01752 VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. Electronic Deliv
ery of Future PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE 1-800-690-6903 Use any tou
ch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR
DETACH AND RETURN THIS PORTION THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. EVERGREEN SOLAR, INC. The Board of Directors recommends you vote FOR the following proposal (s): For Against Abstain 1. To approve under the applicable provisions of Nasdaq Marketplace Rule 5635 the issuance of new 4% Convertible Subordinated Additional Cash Notes due 2020 and new 7.5% Convertible Senior Notes due 2017 (and the issuance of common stock issuable
upon conversion of the 4% Convertible Subordinated Additional Cash Notes due 2020 and new 7.5% Convertible Senior Notes due 2017) in connection with the proposed Exchange Offers and New 4% Notes Financing described in the attached proxy statement. 2. To amend our Certificate of Incorporation to increase the number of authorized common shares from 120,000,000 shares to 240,000,000 shares 3. To grant management the authority to adjourn, postpone or continue the Special Meeting. NOTE: To approve such other bu
siness as may properly come before the meeting or any adjournment thereof. address changes or comments, mark here. For (see reverse for instructions) Yes No Please indicate if you plan to attend this meeting. Note: Please sign exactly as your name or name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must si
gn. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
|
Important Notice Regarding Internet
Availability of Proxy Materials
for the Special Meeting:
The Notice and Proxy Statement is
available at www.proxyvote.com
M14980-P80689
EVERGREEN SOLAR, INC.
Special Meeting of Stockholders
January 31, 2011
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael El-Hillow and
Christian M. Ehrbar, and each of them,
as proxyholders and attorneys-in-fact of the undersigned, with full power of substitution to
vote all shares of stock of Evergreen Solar, Inc. (the Company) which the undersigned
is entitled to vote at the Special Meeting of Stockholders of Evergreen Solar, Inc. to be held on
Monday, January 31, 2011, at 8:30 a.m. Eastern Time, at the Courtyard by Marriott,
75 Felton Street, Marlboro, Massachusetts 01752, and at any continuation or adjournments thereof,
with all powers that the undersigned would have if personally present at the meeting. In their
discretion, the proxy holders are authorized to vote upon such other business and matters incident
to the conduct of meetings as may properly come before the meeting.
The undersigned hereby acknowledges receipt of the Notice of Special Meeting and Proxy Statement, dated on or about January 3, 2011.
The undersigned hereby expressly revokes any and all proxies heretofore given or executed by the undersigned with respect to
the shares of stock represented by this proxy and, by filing this proxy with the
Secretary of Evergreen Solar, Inc., gives notice of such revocation.
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on the reverse side
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