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Registration No. 333-
As filed with the Securities and Exchange Commission on February 6, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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OMNICARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1001351
(State of Incorporation) (IRS Employer Identification No.)
50 EAST RIVERCENTER BLVD. -- SUITE 1530
COVINGTON, KENTUCKY 41011
(606) 655-1180
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive office)
CHERYL D. HODGES
C/O OMNICARE MANAGEMENT COMPANY
2800 CHEMED CENTER, 255 E. FIFTH STREET
CINCINNATI, OHIO 45202
(513) 762-6666
(Address, including zip code, and telephone number, including area code,
of agent for service)
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Please send copies of all communications to:
MORTON A. PIERCE, ESQ. JOSEPH M. RIGOT, ESQ.
DEWEY BALLANTINE LLP THOMPSON HINE & FLORY LLP
1301 AVENUE OF THE AMERICAS 2000 COURTHOUSE PLAZA N.E.
NEW YORK, NEW YORK 10019 DAYTON, OHIO 45401-8801
(212) 259-8000 (937) 443-6600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO TIME
AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Each Class of Amount to Proposed Maximum Proposed Maximum Amount of
Securities to be Registered be Registered Offering Price Per Unit(1) Aggregate Offering Price(1) Registration Fee(2)
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<S> <C> <C> <C> <C>
5% Convertible Subordinated
Debentures due 2007 $345,000,000 100% $345,000,000 $101,775
Common Stock, par value
$1.00 per share 8,976,222(3) $28.78 $ 7,600,827 $ 2,242
Total NA NA $352,600,827 $104,017
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<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(i) there is no filing fee with respect to the shares
of Common Stock issuable upon conversion of the Debentures because no
additional consideration will be received in connection with the exercise
of the conversion privilege. With respect to the 264,101 shares of Common
Stock offered hereby that are not issuable upon conversion of the
Debentures, the registration fee has been computed pursuant to Rule 457(c)
based on $28.78, the average of the high and low prices reported on the New
York Stock Exchange on January 30, 1998.
(3) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the Debentures being registered hereunder by means of
adjustment of the conversion price.
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
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SUBJECT TO COMPLETION, DATED _________, 1998
PROSPECTUS
OMNICARE, INC.
$345,000,000 PRINCIPAL AMOUNT OF 5% CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2007
(Interest payable June 1 and December 1)
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8,976,222 SHARES OF COMMON STOCK
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This Prospectus relates to (i) $345,000,000 aggregate principal amount
of 5% Convertible Subordinated Debentures due 2007 (the "Debentures") of
Omnicare, Inc., a Delaware corporation ("Omnicare" or the "Company"), (ii)
8,712,121 shares of common stock, par value $1.00 per share (the "Common
Stock"), of the Company which are initially issuable upon conversion of the
Debentures plus such additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Debentures as a result of
adjustments to the conversion price (the "Conversion Shares") and (iii) 264,101
additional shares of Common Stock (the "Additional Shares"). The Conversion
Shares and the Additional Shares are referred to herein collectively as the
"Shares." The Debentures and the Shares that are being registered hereby are to
be offered for the account of the holders thereof or by their transferees,
pledgees, donees or successors (the "Selling Securityholders"). The Debentures
were initially acquired from the Company by Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, NationsBanc Montgomery Securities, Inc., Smith Barney Inc. and
William Blair & Company, L.L.C. (the "Initial Purchasers") in December 1997 in
connection with a private offering. See "Description of the Debentures."
The Debentures are convertible into Common Stock of the Company at any
time after March 10, 1998 through maturity, unless previously redeemed, at a
conversion price of $39.60 per share, subject to adjustments in certain events.
The Common Stock is traded on the New York Stock Exchange ("NYSE") under the
symbol "OCR." On February 5, 1998, the closing price of the Common Stock on the
NYSE Composite Tape was $31.75 per share.
The Debentures do not provide for a sinking fund. The Debentures are
redeemable at the option of the Company, in whole or in part, at the redemption
prices set forth in this Prospectus, together with accrued interest, except that
no redemption may be made prior to December 6, 2000. Upon a Fundamental Change
(as defined herein), each holder of Debentures shall have the right, at the
holder's option, to require the Company to redeem such holder's Debentures at
declining redemption prices, subject to adjustments in certain events as
described herein, together with accrued interest. See "Description of Debentures
- - Optional Redemption by the Company" and "- Redemption at Option of the
Holder."
The Debentures are unsecured obligations of the Company and are
subordinated to all present and future Senior Indebtedness (as defined herein)
of the Company and will be effectively subordinated to all indebtedness and
liabilities of subsidiaries of the Company. The Indenture (as defined herein)
does not restrict the incurrence of any other indebtedness or liabilities by the
Company or its subsidiaries. See "Description of Debentures - Subordination of
Debentures."
The Initial Purchasers have advised the Company that they intend to
make a market in the Debentures. The Initial Purchasers, however, are not
obligated to do so and any such market making may be discontinued at any time
without notice, in the sole discretion of the Initial Purchasers. No assurance
can be given that any market for the Debentures will develop or be maintained.
The Debentures and the Shares are being registered to permit public
secondary trading of (i) the Debentures and, upon conversion, the Conversion
Shares and (ii) the Additional Shares, by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses (other than underwriting discounts and commissions) in
connection with the registration and sale of the Debentures and the Shares
covered by this Prospectus.
The Company will not receive any of the proceeds from sales of
Debentures or the Shares by the Selling Securityholders. The Debentures and the
Shares may be offered in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The Selling Securityholders may be deemed to be "underwriters" as
defined in the Securities Act of 1933, as amended (the "Securities Act"). If any
broker-dealers are used by the Selling Securityholders, any commissions paid to
broker-dealers and, if broker-dealers purchase any Debentures or Shares as
principals, any profits received by such broker-dealers on the resale of the
Debentures or Shares may be deemed to be underwriting discounts or commissions
under the Securities Act. In addition, any profits realized by the Selling
Securityholders may be deemed to be underwriting commissions.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1998
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") on Form
S-3 under the Securities Act with respect to the Debentures and the Shares
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information with respect to the Company and the Debentures and the
Shares offered hereby, reference is made to the Registration Statement and to
the exhibits and schedules filed therewith. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Commission. Copies of
such reports, proxy statements, the Registration Statement and exhibits thereto
and other information may be inspected without charge at the offices of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at 7 World Trade Center,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and copies of such documents may be obtained from
the Public Reference Section of the Commission at its Washington, D.C. or
regional offices upon the payment of the fees prescribed by the Commission. The
Commission maintains a World Wide Web site on the Internet at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Reports,
proxy statements and other information concerning Omnicare can be inspected at
the NYSE, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended; the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1997, as amended, June 30, 1997 and September 30,
1997, as amended; the Company's Current Reports on Form 8-K dated January 31,
1997, February 6, 1997, May 31, 1997, August 6, 1997, August 8, 1997, September
12, 1997 (as amended September 29, 1997 and December 4, 1997), December 1, 1997
and December 10, 1997; and the Company's Form 8-A Registration Statement filed
September 14, 1993 are hereby incorporated by reference in this Prospectus. All
documents filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering being made hereby shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in any document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the documents that have been or may be
incorporated by reference herein (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Such
requests should be directed to Omnicare, Inc., 50 East RiverCenter Blvd. --
Suite 1530, Covington, Kentucky 41011, Attention: Corporate Secretary -- Cheryl
D. Hodges (telephone: (606) 291-6800).
THE COMPANY
Omnicare is a leading independent provider of pharmacy and related
services to long-term care institutions such as nursing homes, retirement
centers and other institutional health care facilities. Omnicare purchases,
repackages and dispenses pharmaceuticals, both prescription and
non-prescription, and provides computerized medical recordkeeping and
third-party billing for residents in such facilities. Omnicare also provides
consultant pharmacist services, including evaluating monthly patient drug
therapy, monitoring the control, distribution and administration of drugs within
the nursing facility and assisting in compliance with state and federal
regulations. In addition, Omnicare provides ancillary services, such as infusion
therapy, distributes medical supplies and offers clinical care plan and
financial software information systems to its client nursing home facilities.
Omnicare
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currently provides these services to approximately 445,100 residents in
approximately 5,500 long-term care and other institutional health care
facilities in 37 states. Omnicare's executive offices are located at 50 East
RiverCenter Blvd. -- Suite 1530, Covington, Kentucky 41011, and its telephone
number is (606) 655-1180.
RISK FACTORS
This Prospectus (including the documents incorporated by reference
herein) contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below, as well as
those discussed elsewhere in this Prospectus (including the documents
incorporated by reference herein).
RISKS RELATING TO ACQUISITION PROGRAM
In accordance with its strategy for growth, which is to build its
institutional pharmacy business into a national organization dedicated to
serving the long-term care market, Omnicare is presently engaged in a geographic
expansion program which incorporates an active acquisition program in the
long-term care pharmacy industry. The success of Omnicare's acquisition program
and of its underlying growth strategy will depend, among other things, on the
continued availability of suitable acquisition candidates. Although Omnicare
historically has not had difficulty in identifying suitable acquisition
candidates, there can be no assurance that Omnicare will consummate any
additional acquisitions due to the potential for increased competition for
acquisitions from other firms seeking to enter this market or to enhance their
institutional pharmacy businesses.
Omnicare's strategy also contemplates the continued internal growth of
the acquired businesses. Any business acquisition, however, involves inherent
uncertainties, such as the effect on the acquired businesses of integration into
a larger organization and the availability of management resources to oversee
the operations of acquired businesses. Potential obstacles to the successful
integration of acquired businesses include, among others, consolidation of
financial and managerial functions and elimination of operational redundancies,
achievement of purchasing efficiencies and the addition and integration of key
personnel. Even though an acquired business may have enjoyed excellent growth as
an independent company prior to an acquisition, there can be no assurance that
such growth would continue after an acquisition. There can be no assurance, that
any acquisition will be integrated successfully or will not have an adverse
impact on Omnicare's results of operations or financial condition.
RISKS OF GOVERNMENT REGULATION
Omnicare's pharmacy business is subject to federal, state and local
regulations, and its pharmacies are required to be licensed in the states in
which they are located. The failure to obtain or renew any required regulatory
approvals or licenses could adversely affect the continued operation of
Omnicare's business. In addition, the long-term care facilities that contract
for Omnicare's services are also subject to federal, state and local regulations
and are required to be licensed in the states in which they are located. The
failure by these institutions to comply with such regulations or to obtain or
renew any required licenses could result in the loss of Omnicare's ability to
provide pharmacy services to their residents. Omnicare is also subject to
federal and state laws that prohibit certain direct and indirect payments
between health care providers that are intended, among other things, to induce
or encourage the referral of residents to, or the recommendation of, a
particular provider of items or services. Violation of these laws can result in
loss of licensure, civil and criminal penalties and exclusion from the Medicare,
Medicaid and other federal health care programs.
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DEPENDENCE UPON GOVERNMENT-SPONSORED AND THIRD PARTY REIMBURSEMENT
Approximately one-half of Omnicare's pharmacy services billings are
reimbursed by government-sponsored programs, largely Medicaid and to a lesser
extent Medicare, and the remainder is paid or reimbursed by individual
residents, long-term care facilities and other third party payors, including
private insurers. Medicaid and Medicare are highly regulated. The failure, even
if inadvertent, of Omnicare and/or its client institutions to comply with
applicable reimbursement regulations could adversely affect Omnicare's business.
Omnicare's sales and profitability are, and will continue to be,
affected by the efforts of all payors to contain or reduce the cost of health
care by lowering reimbursement rates, limiting the scope of covered services,
and negotiating reduced or capitated pricing arrangements. Any changes which
serve to lower reimbursement levels under Medicare, Medicaid or private pay
programs, including managed care contracts, could adversely affect Omnicare.
Furthermore, other changes in such reimbursement programs or in regulations
related thereto, such as modifications in the timing or processing of payments
and other changes intended to limit or decrease the growth of Medicaid, Medicare
or other third party expenditures, could adversely affect Omnicare's business.
UNCERTAINTIES ASSOCIATED WITH HEALTH CARE REFORM AND FEDERAL BUDGET LEGISLATION
In recent years, a number of legislative proposals have been introduced
in Congress that would effect major changes in the health care system, either
nationally or at the state level. The Balanced Budget Act of 1997 ("Balanced
Budget Act") signed into law on August 5, 1997, seeks to achieve a balanced
federal budget by, among other things, reducing federal spending on the Medicare
and Medicaid programs. With respect to Medicare, the law mandates establishment
of a prospective payment system ("PPS") for Medicare skilled nursing facilities
("SNFs") under which facilities will be paid a federal per diem rate for
virtually all covered SNF services. It is anticipated that the PPS will be
phased in over three cost reporting periods, starting with cost reporting
periods beginning on or after July 1, 1998. In the accompanying Conference
Report, the conferees specifically note that, to ensure that the frail elderly
residing in SNFs receive needed and appropriate medication therapy, the
Secretary of the Department of Health and Human Services is to consider, as part
of the PPS for SNFs, the results of studies conducted by independent
organizations, including those which examine appropriate payment mechanism and
payment rates for medication therapy, and to develop case mix adjustments that
reflect the needs of such residents. The Balanced Budget Act also imposes limits
on annual updates in payments to Medicare SNFs for routine services, and
institutes consolidated billing for SNF services for all non-physician Medicare
Part B items and services for SNF residents, effective July 1, 1998. The law
also imposes numerous other cost savings measures affecting Medicare SNF
services. In addition, the Balanced Budget Act requires, as a condition of
issuance or renewal of a Medicare Part B supplier number, for the supplier to
obtain a surety bond. In January 1998, new rules were proposed to establish
additional supplier standards, including the requirement to obtain a surety
bond. A supplier must obtain a surety bond for each tax identification number
for which it has a Medicare supplier number.
The Balanced Budget Act also repeals the "Boren Amendment" federal
payment standard for Medicaid payments to Medicaid nursing facilities effective
October 1, 1997. There can be no assurance that budget constraints or other
factors will not cause states to reduce Medicaid reimbursement to nursing
facilities or that payments to nursing facilities will be made on a timely
basis. The law also grants greater flexibility to states to establish Medicaid
managed care programs without the need to obtain a federal waiver. Although
these waiver projects
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generally exempt institutional care, including nursing facility and
institutional pharmacy services, no assurances can be given that these programs
ultimately will not change the reimbursement system for long-term care,
including pharmacy services, from fee-for-service to managed care negotiated or
capitated rates. The Company anticipates that federal and state governments will
continue to review and assess alternative health care delivery systems and
payment methodologies. It is not possible to predict the effect of the recent
budget legislation or the interpretation or administration of such legislation
on Omnicare's business. Accordingly, there can be no assurance that these
changes or any future health care legislation will not adversely affect
Omnicare's business.
COMPETITION
The long-term care pharmacy business is highly regionalized and, within
a given geographic region of operations, highly competitive. In the geographic
regions it serves, Omnicare competes with numerous local and regional
institutional pharmacies, as well as the pharmacy operations owned by other
long-term care facilities. In its program of acquiring institutional pharmacy
providers, Omnicare competes with other companies with similar acquisition
strategies. Certain of Omnicare's competitors have substantial financial
resources. There can be no assurance that Omnicare will not encounter increased
competition which could adversely affect its business, results of operations or
financial condition.
SUBORDINATION OF DEBENTURES
The Debentures are subordinate in right of payment to all current and
future Senior Indebtedness of the Company. Senior Indebtedness includes all
indebtedness of the Company, whether existing on or created or incurred after
the date of the issuance of the Debentures, that is not made subordinate to or
pari passu with the Debentures by the instrument creating the indebtedness. At
December 31, 1997, the aggregate amount of Senior Indebtedness outstanding and
the aggregate amount of indebtedness and other liabilities of the Company and
its subsidiaries to which the Debentures are effectively subordinated was
approximately $40,000,000. The Indenture does not limit the amount of
additional indebtedness, including Senior Indebtedness, which the Company can
create, incur, assume or guarantee. By reason of such subordination of the
Debentures, in the event of insolvency, bankruptcy, liquidation, reorganization,
dissolution or winding up of the business of the Company or upon default in
payment with respect to any Senior Indebtedness of the Company or an event of
default with respect to such indebtedness resulting in the acceleration thereof,
the assets of the Company will be available to pay the amounts due on the
Debentures only after all Senior Indebtedness of the Company has been paid in
full. In addition, holders of the Debentures are effectively subordinated to the
claims of creditors of the Company's subsidiaries to the extent of the assets of
such subsidiaries. In the event of the insolvency, bankruptcy, liquidation,
reorganization, dissolution or winding up of the business of any subsidiary of
the Company, creditors of such subsidiary generally will have the right to be
paid in full before any distribution is made to the Company or the holders of
the Debentures. See "Description of Debentures."
LIMITATIONS ON REPURCHASE UPON A FUNDAMENTAL CHANGE
In the event of a Fundamental Change, each holder of the Debentures
will have the right, at the holder's option, to require the Company to
repurchase all or a portion of such holder's Debentures as described herein
under the caption "Description of Debentures - Redemption at Option of the
Holder." The Company's ability to
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repurchase the Debentures upon a Fundamental Change may be limited by the terms
of the Company's Senior Indebtedness and the subordination provisions of the
Indenture. Further, the ability of the Company to repurchase Debentures upon a
Fundamental Change will be dependent on the availability of sufficient funds and
compliance with applicable securities laws. Accordingly, there can be no
assurance that the Company will be able to repurchase the Debentures upon a
Fundamental Change. The term "Fundamental Change" is limited to certain
specified transactions involving a Change in Control (as defined) and may not
include other events that might adversely affect the financial condition of the
Company or result in a downgrade of the credit rating (if any) of the Debentures
nor would the requirement that the Company offer to repurchase the Debentures
upon a Fundamental Change necessarily afford holders of the Debentures
protection in the event of a highly leveraged reorganization, merger or similar
transaction involving the Company. See "Description of Debentures."
ABSENCE OF PUBLIC MARKET; TRANSFER RESTRICTIONS
Prior to this offering there has been no public trading market for the
Debentures, although the Debentures have been eligible for trading through the
Nasdaq Stock Market's Portal Market.SM Debentures acquired pursuant to this
Prospectus will not be eligible for trading in the Portal Market. Although the
Initial Purchasers have advised the Company that the Initial Purchasers
currently intend to make a market in the Debentures, the Initial Purchasers are
not obligated to do so and may discontinue such market making at any time
without notice. In addition, such market making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act. Accordingly, there
can be no assurance that any public market for the Debentures will develop or,
if one does develop, that it will be maintained. If an active public market for
the Debentures fails to develop or be sustained, the trading price of such
Debentures could be materially adversely affected. The Company does not intend
to apply for listing of the Debentures on any securities exchange.
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Debentures or the Shares by the Selling Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 30,
----------------------- -------------
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 3.41x 5.43x 3.92x 6.37x 12.96x 10.64x 19.22x
</TABLE>
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The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
consist of interest expense and that portion of net rental expense (one-third)
deemed representative of the interest factor.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an indenture dated as of December 10,
1997 (the "Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"). Copies of the form of Indenture and
Registration Rights Agreement (as defined below) are available from the Trustee
upon request by a registered holder of the Debentures. The following summaries
of certain provisions of the Debentures, the Indenture and the Registration
Rights Agreement do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Debentures, the Indenture and the Registration Rights Agreement, including the
definitions therein of certain terms which are not otherwise defined in this
Prospectus. Wherever particular provisions or defined terms of the Indenture (or
of the Form of Debenture which is a part thereof) or the Registration Rights
Agreement are referred to, such provisions or defined terms are incorporated
herein by reference. References in this section to the "Company" are solely to
Omnicare, Inc., a Delaware corporation, and not its subsidiaries.
GENERAL
The Debentures represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Debentures" and convertible into Common Stock
as described under "Conversion of Debentures." The Debentures are limited to
$345,000,000 aggregate principal amount, are issuable only in denominations of
$1,000 and multiples thereof and will mature on December 1, 2007 unless earlier
redeemed at the option of the Company or at the option of the holder upon a
Fundamental Change (as defined).
The Indenture does not contain any financial covenants or restrictions
on the payment of dividends, the incurrence of Senior Indebtedness (as defined
below under "Subordination of Debentures") or the issuance or repurchase of
securities of the Company. The Indenture contains no covenants or other
provisions to afford protection to holders of the Debentures in the event of a
highly leveraged transaction or a change in control of the Company except to the
extent described under "Redemption at Option of the Holder."
The Debentures bear interest at the rate of 5% per annum from December
10, 1997, payable semi-annually on June 1 and December 1, commencing on June 1,
1998, to holders of record at the close of business on the preceding May 15 and
November 15, respectively, except (i) that the interest payable upon redemption
(unless the date of redemption is an interest payment date) will be payable to
the person to whom principal is payable and (ii) as set forth in the next
succeeding sentence. In the case of any Debenture (or portion thereof) which is
converted into Common Stock of the Company during the period from (but
excluding) a record date to (but excluding) the next succeeding interest payment
date either (i) if such Debenture (or portion thereof) has been called for
redemption
7
<PAGE> 10
on a redemption date which occurs during such period, or is to be
redeemed in connection with a Fundamental Change on a Repurchase Date (as
defined) which occurs during such period, the Company shall not be required to
pay interest on such interest payment date in respect of any such Debenture (or
portion thereof) or (ii) if otherwise, any Debenture (or portion thereof)
submitted for conversion during such period shall be accompanied by funds equal
to the interest payable on such succeeding interest payment date on the
principal amount so converted (see "Conversion of Debentures"). Interest may, at
the Company's option, be paid either (i) by check mailed to the address of the
person entitled thereto as it appears in the Debenture register or (ii) by
transfer to an account maintained by such person located in the United States;
provided, however, that payments to The Depository Trust Company, New York, New
York ("DTC") will be made by wire transfer of immediately available funds to the
account of DTC or its nominee. Interest will be computed on the basis of a
360-day year composed of twelve 30-day months
FORM, DENOMINATION AND REGISTRATION
Global Debenture, Book-Entry Form. Debentures are issuable in fully
registered form, without coupons, in denominations of $1,000 principal amount
and multiples thereof. Debentures sold by the Selling Securityholders pursuant
to the Registration Statement of which this Prospectus forms a part will be
represented by a global Debenture (the "Registered Global Debenture"), except as
set forth below under "Certificated Debentures." The Registered Global Debenture
will be deposited with, or on behalf of, DTC and registered in the name of Cede
& Co. ("Cede") as DTC's nominee. Beneficial interests in the Registered Global
Debenture will be exchangeable for definitive certificated Debentures only in
accordance with the terms of the Indenture.
Purchasers of the Debentures offered hereby may hold their interests in
the Registered Global Debenture directly through DTC or indirectly through
organizations which are participants in DTC (the "Participants"). Transfers
between Participants will be effected in the ordinary way in accordance with DTC
rules and will be settled in clearing house funds.
Persons who are not Participants may beneficially own interests in the
Registered Global Debenture held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is
the registered owner of the Registered Global Debenture, Cede for all purposes
will be considered the sole holder of the Registered Global Debenture. Except as
provided below, owners of beneficial interests in the Registered Global
Debenture will not be entitled to have certificates registered in their names,
will not receive or be entitled to receive physical delivery of certificates in
definitive form, and will not be considered the holders thereof.
Payment of interest on and the redemption price of the Registered
Global Debenture will be made to Cede, the nominee for DTC, as the registered
owner of the Registered Global Debenture by wire transfer of immediately
available funds on each interest payment date or the redemption date, as the
case may be. Neither the Company, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Registered
Global Debenture or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company has been informed by DTC that, with respect to any payment
of interest on, or the redemption price of, the Registered Global Debenture,
DTC's practice is to credit Participants' accounts on the payment date therefor
with payments in amounts proportionate to their respective beneficial interests
in the principal amount
8
<PAGE> 11
represented by the Registered Global Debenture as shown on the records of DTC,
unless DTC has reason to believe that it will not receive payment on such
payment date. Payments by Participants to owners of beneficial interests in the
principal amount represented by the Registered Global Debenture held through
such Participants will be the responsibility of such Participants, as is now the
case with securities held for the accounts of customers registered in "street
name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the
Registered Global Debenture to pledge such interest to persons or entities that
do not participate in the DTC system, or otherwise take actions in respect of
such interest, may be affected by the lack of a physical certificate evidencing
such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Debentures (including, without limitation, the
presentation of Debentures for exchange as described below), only at the
direction of one or more Participants to whose account with DTC interests in the
Registered Global Debenture are credited, and only in respect of the principal
amount of the Debentures represented by the Registered Global Debenture as to
which such Participant or Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations. Certain of such Participants (or their
representatives), together with other entities, own DTC. Indirect access to the
DTC system is available to others such as banks, brokers, dealers and trust
companies that clear through, or maintain a custodial relationship with, a
Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Registered Global Debenture among
Participants, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. If DTC is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
cause Debentures to be issued in definitive form in exchange for the Registered
Global Debenture.
Certificated Debentures. Holders of Debentures may request that
certificated Debentures be issued in lieu of, or in exchange for, Debentures
represented by the Registered Global Debenture. Furthermore, certificated
Debentures may be issued in exchange for Debentures represented by the
Registered Global Debenture if no successor depositary is appointed by the
Company as set forth above under "Global Debenture, Book-Entry Form."
9
<PAGE> 12
CONVERSION OF DEBENTURES
The holders of Debentures will be entitled at any time after March 10,
1998 through the close of business on the final maturity date of the Debentures,
subject to prior redemption, to convert any Debentures or portions thereof (in
denominations of $1,000 or multiples thereof) into Common Stock of the Company,
at the conversion price set forth on the cover page of this Prospectus, subject
to adjustment as described below. Except as described below, no payment or other
adjustment will be made on conversion of any Debentures for interest accrued
thereon or for dividends on any Common Stock issued. If any Debentures not
called for redemption are converted after a record date for the payment of
interest and prior to the next succeeding interest payment date, such Debentures
must be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted. The Company is not
required to issue fractional shares of Common Stock upon conversion of
Debentures and, in lieu thereof, will pay a cash adjustment based upon the
market price of Common Stock on the last business day prior to the date of
conversion. In the case of Debentures called for redemption, conversion rights
will expire at the close of business on the business day preceding the day fixed
for redemption unless the Company defaults in the payment of the redemption
price. A Debenture in respect of which a holder is exercising its option to
require redemption upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise its option in accordance with the
terms of the Indenture.
The initial conversion price of $39.60 per share of Common Stock is
subject to adjustment under formulae as set forth in the Indenture in certain
events, including:
(i) the issuance of Common Stock of the Company as a dividend
or distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common
Stock;
(iii) the issuance to all holders of Common Stock of certain
rights or warrants to purchase Common Stock;
(iv) the distribution to all holders of Common Stock of
capital stock (other than Common Stock) or evidences of Indebtedness of
the Company or of assets (including securities, but excluding those
rights, warrants, dividends and distributions referred to above or paid
in cash);
(v) distributions consisting of cash, excluding any quarterly
cash dividend on the Common Stock to the extent that the aggregate cash
dividend per share of Common Stock in any fiscal quarter does not
exceed the greater of (x) the amount per share of Common Stock of the
next preceding quarterly cash dividend on the Common Stock to the
extent that such preceding quarterly dividend did not require an
adjustment of the conversion price pursuant to this clause (v) (as
adjusted to reflect subdivisions or combinations of the Common Stock),
and (y) 3.75 percent of the average of the last reported sales price of
the Common Stock during the ten trading days immediately prior to the
date of declaration of such dividend,
10
<PAGE> 13
and excluding any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company. If an adjustment
is required to be made as set forth in this clause (v) as a result of a
distribution that is a quarterly dividend, such adjustment would be
based upon the amount by which such distribution exceeds the amount of
the quarterly cash dividend permitted to be excluded pursuant to this
clause (v). If an adjustment is required to be made as set forth in
this clause (v) as a result of a distribution that is not a quarterly
dividend, such adjustment would be based upon the full amount of the
distribution;
(vi) payment in respect of a tender offer or exchange offer by
the Company or any subsidiary of the Company for the Common Stock to
the extent that the cash and value of any other consideration included
in such payment per share of Common Stock exceeds the Current Market
Price (as defined in the Indenture) per share of Common Stock on the
trading day next succeeding the last date on which tenders or exchanges
may be made pursuant to such tender or exchange offer, and
(vii) payment in respect of a tender offer or exchange offer
by a person other than the Company or any subsidiary of the Company in
which, as of the closing date of the offer, the Board of Directors is
not recommending rejection of the offer. The adjustment referred to in
this clause (vii) will only be made if the tender offer or exchange
offer is for an amount that increases the offeror's ownership of Common
Stock to more than 25% of the total shares of Common Stock outstanding,
and if the cash and value of any other consideration included in such
payment per share of Common Stock exceeds the Current Market Price per
share of Common Stock on the business day next succeeding the last date
on which tenders or exchanges may be made pursuant to such tender or
exchange offer. The adjustment referred to in this clause (vii) will
generally not be made, however, if, as of the closing of the offer, the
offering documents with respect to such offer disclose a plan or an
intention to cause the Company to engage in a consolidation or merger
of the Company or a sale of all or substantially all of the Company's
assets.
In the case of (i) any reclassification of the Common Stock or (ii) a
consolidation, merger or combination involving the Company or a sale or
conveyance to another person of the property and assets of the Company as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Debentures then outstanding will generally
be entitled thereafter to convert such Debentures into the kind and amount of
shares of stock, other securities or other property or assets which they would
have owned or been entitled to receive upon such reclassification,
consolidation, merger, combination, sale or conveyance had such Debentures been
converted into Common Stock immediately prior to such reclassification,
consolidation, merger, combination, sale or conveyance assuming that a holder of
Debentures would not have exercised any rights of election as to the stock,
other securities or other property or assets receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock or in
certain other circumstances requiring conversion price adjustments, the holders
of Debentures may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain United States Federal
Income Tax Considerations" below.
11
<PAGE> 14
The Company from time to time may to the extent permitted by law reduce
the conversion price by any amount for any period of at least 20 days, in which
case the Company shall give at least 15 days' notice of such reduction, if the
Board of Directors has made a determination that such reduction would be in the
best interests of the Company, which determination shall be conclusive. The
Company may, at its option, make such reductions in the conversion price, in
addition to those set forth above, as the Board of Directors deems advisable to
avoid or diminish any income tax to holders of Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See Certain United States Federal
Income Tax Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.
OPTIONAL REDEMPTION BY THE COMPANY
The Debentures are not entitled to any sinking fund. At any time on or
after December 6, 2000, the Debentures will be redeemable at the Company's
option on at least 30 days' notice as a whole or, from time to time, in part at
the following prices (expressed as a percentage of the principal amount),
together with accrued interest to, but excluding, the date fixed for redemption:
If redeemed during the period beginning December 6, 2000 and ending on
November 30, 2001 at a redemption price of 103.500%, and if redeemed during the
12-month period beginning December 1:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- -----
<S> <C>
2001.............................. 103.000%
2002.............................. 102.500
2003.............................. 102.000
2004.............................. 101.500
2005.............................. 101.000
2006.............................. 100.500
</TABLE>
and 100% at December 1, 2007, provided that any semi-annual payment of interest
becoming due on the date fixed for redemption shall be payable to the holders of
record on the relevant record date of the Debentures being redeemed.
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<PAGE> 15
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of
$1,000 or multiples thereof by lot, pro rata or by another method the Trustee
considers fair and appropriate. If a portion of a holder's Debentures is
selected for partial redemption and such holder converts a portion of such
Debentures, such converted portion shall be deemed to be of the portion selected
for redemption.
The Company may not give notice of any redemption of Debentures if an
Event of Default with respect to the payment of interest on any Debentures has
occurred and is continuing.
REDEMPTION AT OPTION OF THE HOLDER
If a Fundamental Change (as defined) occurs at any time prior to
December 1, 2007, each holder of Debentures shall have the right, at the
holder's option, to require the Company to redeem any or all of such holder's
Debentures on the date (the "Repurchase Date") that is 30 days after the date of
the Company's notice of such Fundamental Change. The Debentures will be
redeemable in multiples of $1,000 principal amount.
The Company shall redeem such Debentures at a price expressed as a
percentage of the principal amount equal to (i) 105.000% if the Repurchase Date
is before December 1, 1998, (ii) 104.500% if the Repurchase Date is during the
period beginning December 1, 1998 and ending November 30, 1999, (iii) 104.000%
if the Repurchase Date is during the period beginning December 1, 1999 and
ending on December 5, 2000, and (iv) thereafter at the redemption price set
forth under "Optional Redemption by the Company" which would be applicable to a
redemption at the option of the Company on the Repurchase Date; provided that,
if the Applicable Price (as defined) is less than the Reference Market Price (as
defined), the Company shall redeem such Debentures at a price equal to the
foregoing redemption price multiplied by the fraction obtained, by dividing the
Applicable Price by the Reference Market Price. In each case, the Company shall
also pay accrued interest on the redeemed Debentures to, but excluding, the
Repurchase Date; provided that, if such Repurchase Date is an interest payment
date, then the interest payable on such date shall be paid to the holder of
record of the Debentures on the relevant record date.
The Company is required to mail to all holders of record of the
Debentures a notice of the occurrence of a Fundamental Change and of the
redemption right arising as a result thereof on or before the tenth day after
the occurrence of such Fundamental Change. The Company is also required to
deliver the Trustee a copy of such notice. To exercise the redemption right, a
holder of Debentures must deliver, on or before the 30th day after the date of
the Company's notice of a Fundamental Change (the "Fundamental Change Expiration
Time"), written notice of the holder's exercise of such right, together with the
Debentures to be so redeemed, duly endorsed for transfer, to the Company (or an
agent designated by the Company for such purpose). Payment for Debentures
surrendered for redemption (and not withdrawn) prior to the Fundamental Change
Expiration Time will be made promptly following the Repurchase Date.
The term "Fundamental Change" means the occurrence of any transaction
or event in connection with which all or substantially all Common Stock shall be
exchanged for, be converted into, be acquired for, or constitute in all material
respects solely the right to receive, consideration which is not all or
substantially all common stock listed (or, upon consummation of or immediately
following such transaction or event which will be listed) on a
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<PAGE> 16
United States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise). The term "Applicable Price"
means (i) in the event of a Fundamental Change in which the holders of the
Common Stock receive only cash, the amount of cash received by the holder of one
share of Common Stock and (ii) in the event of any other Fundamental Change, the
average of the last reported sale price for the Common Stock during the ten
trading days prior to the record date for the determination of the holders of
Common Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change, or, if there is no such record date,
the date upon which the holders of the Common Stock shall have the right to
receive such cash, securities, property or other assets in connection with the
Fundamental Change. The term "Reference Market Price" shall initially mean $20
and in the event of any adjustment to the conversion price described above
pursuant to the provisions of the Indenture, the Reference Market Price shall
also be adjusted so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such adjustment shall always be the
same as the ratio of $20 to the conversion price specified on the cover page of
this Prospectus (without regards to any adjustment thereto).
The Company will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Debentures in the event
of a Fundamental Change.
The redemption rights of the holders of Debentures could discourage a
potential acquiror of the Company. The Fundamental Change redemption feature,
however, is not the result of management's knowledge of any specific effort to
obtain control of the Company by means of a merger, tender offer, solicitation
or otherwise, or part of a plan by management to adopt a series of anti-takeover
provisions. The term "Fundamental Change" is limited to certain specified
transactions and may not include other events that might adversely affect the
financial condition of the Company, nor would the requirement that the Company
offer to repurchase the Debentures upon a Fundamental Change necessarily afford
the holders of the Debentures protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving the
Company.
If a Fundamental Change were to occur, there can be no assurance that the
Company would have sufficient funds to pay the redemption price for all the
Debentures tendered by the holders thereof. In addition, the Company's ability
to repurchase the Debentures upon a Fundamental Change may be limited by the
terms of the Company's Senior Indebtedness and the subordination provisions of
the Indenture. Further, the ability of the Company to repurchase Debentures upon
a Fundamental Change will be dependent on compliance with applicable laws. The
Company's failure to redeem tendered Debentures in connection with a Fundamental
Change would in any event constitute an Event of Default under the Indenture.
SUBORDINATION OF DEBENTURES
The Indebtedness evidenced by the Debentures is subordinated to the
extent provided in the Indenture to the prior payment in full of all Senior
Indebtedness of the Company. The Debentures also are effectively subordinated to
all indebtedness and other liabilities, including trade payables and lease
obligations, if any, of the Company's subsidiaries.
14
<PAGE> 17
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal of, or
premium, if any, and interest (including liquidated damages, if any) on the
Debentures is to be subordinated to the extent provided in the Indenture in
right of payment to the prior payment in full in cash of all Senior
Indebtedness. In the event of any acceleration of the Debentures because of an
Event of Default (as defined), the holders of any Senior Indebtedness then
outstanding would be entitled to payment in full in cash of all obligations in
respect of such Senior Indebtedness before the holders of the Debentures are
entitled to receive any payment or distribution in respect thereof. The
Indenture requires that the Company promptly notify holders of Senior
Indebtedness if payment of the Debentures is accelerated because of an Event of
Default.
The Company also may not make any payment upon or in respect of the
Debentures (including upon redemption) if (i) a default in the payment of the
principal, premium, if any, interest, rent or other obligations in respect of
Senior Indebtedness occurs and is continuing beyond any applicable period of
grace (a "Payment Default") or (ii) any other default occurs and is continuing
with respect to Designated Senior Indebtedness (as defined) that permits holders
of the Designated Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Company or other person permitted to give
such notice under the Indenture (a "Non-Payment Default"). Payments on the
Debentures may and shall be resumed (a) in case of a Payment Default, upon the
date on which such default is cured or waived or ceases to exist and (b) in case
of a Non-Payment Default, the earlier of the date on which such Non-Payment
Default is cured or waived or ceases to exist or 179 days after the date on
which the applicable Payment Blockage Notice is received. No new period of
payment blockage may be commenced pursuant to a Payment Blockage Notice unless
and until (i) 365 days have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and (ii) all scheduled payments of
principal, premium, if any, and interest (including liquidated damages, if any)
on the Debentures that have come due have been paid in full in cash. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or shall be made, the basis
for a subsequent Payment Blockage Notice.
In the event that, notwithstanding the foregoing, the Trustee or any
holder of the Debentures receives any payment or distribution of assets of the
Company of any kind in contravention of any of the subordination provisions of
the Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Debentures before
all Senior Indebtedness is paid in full, then such payment or distribution will
be held by the recipient in trust for the benefit of holders of Senior
Indebtedness or their representatives to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to or for the holders
of Senior Indebtedness.
By reason of the subordination provisions described above, in the event
of the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined) of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or
15
<PAGE> 18
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same or
the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to the Debentures or expressly provides
that such Indebtedness is pari passu or junior to the Debentures.
Notwithstanding the foregoing, the term Senior Indebtedness shall not include
Indebtedness of the Company to any subsidiary of the Company, a majority of the
voting stock of which is owned, directly or indirectly, by the Company.
The term "Indebtedness" means, with respect to any Person (as defined)
and without duplication:
(a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection
agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the recourse
of the lender is to the whole of the assets of such Person or to only a
portion thereof), other than any account payable or other accrued
current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services;
(b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances;
(c) all obligations and liabilities (contingent or otherwise)
in respect of leases of such Person required, in conformity with
generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person and
all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such
Person is contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum residual
value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a
third party to purchase such leased property;
(d) all obligations of such Person (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement
or other similar instrument or agreement or foreign currency hedge,
exchange, purchase or similar instrument or agreement;
(e) all direct or indirect guaranties or similar agreements by
such Person in respect of, and obligations or liabilities (contingent
or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in
clauses (a) through (d);
(f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
16
<PAGE> 19
regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and
(g) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through
(f).
The term "Designated Senior Indebtedness" means Senior Indebtedness
under the Company's existing revolving credit facility or any other particular
Senior Indebtedness in which the instrument creating or evidencing the same or
the assumption or guarantee thereof (or related agreements or documents to which
the Company is a party) expressly provides that such Senior Indebtedness shall
be "Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness).
The Debentures will also be effectively subordinated to all
liabilities, including trade payables and lease obligations, if any, of the
Company's subsidiaries. Any right of the Company to receive the assets of any of
its subsidiaries upon the liquidation or reorganization thereof (and the
consequent right of the holders of the Debentures to participate in these
assets) will be effectively subordinated to the claims of that subsidiary's
creditors (including trade creditors), except to the extent that the Company is
itself recognized as a creditor of such subsidiary, in which case the claims of
the Company would still be subordinate to any security interests in the assets
of such subsidiary and any indebtedness of such subsidiary senior to that held
by the Company.
The Company's ability to redeem, repurchase or make interest and
principal payments on the Debentures is dependent upon the earnings of its
subsidiaries and the distribution of those earnings (through dividends or
otherwise) to, or upon loans or other payment of funds by those subsidiaries to,
the Company. The subsidiaries are separate and distinct legal entities and have
no obligation, contingent or otherwise, to pay any amounts due pursuant to the
Debentures or to make any funds available therefor, whether by dividends, loans
or other payments. In addition, the payment of dividends and the making of loans
and advances to the Company by its subsidiaries may be subject to statutory,
contractual or other restrictions and are dependent upon the earnings or
financial condition of those subsidiaries and subject to various business
considerations. As a result, the Company may be unable to gain access to the
cash flow or assets of its subsidiaries in amounts sufficient to pay the
principal of or interest on the Debentures when due or to redeem Debentures at
the option of the holders thereof after the occurrence of a Fundamental Change.
As of December 31, 1997, the aggregate amount of Senior Indebtedness
outstanding and the aggregate amount of indebtedness and other liabililties of
the Company and its subsidiaries to which the Debentures are effectively
subordinated was approximately $40,000,000. The Indenture will not limit the
amount of additional indebtedness, including Senior Indebtedness, which the
Company can create, incur, assume or guarantee, nor will the Indenture limit the
amount of indebtedness or other liabilities that any subsidiary can create,
incur, assume or guarantee.
The Company is obligated to pay reasonable compensation to the Trustee
and to indemnify the Trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the Debentures. The
Trustee's claims for such payments will generally be senior to those of the
holders of the Debentures in respect of all funds collected or held by the
Trustee.
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EVENTS OF DEFAULT; NOTICE AND WAIVER
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any (upon redemption or otherwise),
on the Debentures (whether or not such payment is permitted to be made under the
subordination provisions described above); default for 30 days in payment of any
installment of interest, including liquidated damages, if any, on the Debentures
(whether or not such payment is permitted to be made under the subordination
provisions described above); default by the Company for 60 days after notice in
the observance or performance of any other covenants in the Indenture; or
certain events involving bankruptcy, insolvency or reorganization of the Company
or any of its Significant Subsidiaries (as defined). The Indenture provides that
the Trustee may withhold notice to the holders of the Debentures of any default
(except in payment of principal or premium, if any, or interest (including
liquidated damages, if any) with respect to the Debentures) if the Trustee
considers it in the interest of the holders of the Debentures to do so.
The Indenture provides that if an Event of Default shall have occurred
and be continuing, the Trustee or the holders of not less than 25% in principal
amount of the Debentures then outstanding may declare the principal of, premium,
if any, and accrued interest (including liquidated damages, if any) on the
Debentures to be due and payable immediately. In the case of certain events of
bankruptcy or insolvency of the Company, the principal of, premium, if any, and
accrued interest (including liquidated damages, if any) on the Debentures shall
automatically become and be immediately due and payable. However, if the Company
shall cure all defaults (except the nonpayment of principal of, premium, if any,
and interest (including liquidated damages, if any) on any of the Debentures
which shall have become due by acceleration) and certain other conditions are
met, with certain exceptions, such declaration may be canceled and past defaults
may be waived by the holders of a majority of the principal amount of the
Debentures then outstanding.
The Indenture provides that any payment of principal, premium, if any,
or interest (including liquidated damages, if any) that is not made when due
(whether or not such payment is permitted to be made under the subordination
provisions described above) will accrue interest, to the extent legally
permissible, at the annual rate set forth on the cover page hereof from the date
on which such payment was required under the terms of the Indenture until the
date of payment.
The holders of a majority in principal amount of the Debentures then
outstanding shall have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee, subject to
certain limitations specified in the Indenture.
The Indenture provides that no holder of the Debentures may pursue any
remedy under the Indenture, except for a default in the payment of principal,
premium, if any, or interest (including liquidated damages, if any), on the
Debentures, unless such holder shall have previously given to the Trustee
written notice of a continuing Event of Default, and the holders of at least 25%
in principal amount of the outstanding Debentures shall have made a written
request, and offered reasonable indemnity, to the Trustee to pursue the remedy,
and the Trustee shall not have received from the holders of a majority in
principal amount of the outstanding Debentures a direction inconsistent with
such request and shall have failed to comply with such request within 60 days
after receipt of such request.
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MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in principal amount of
the Debentures at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Debentures, except
that no such modification shall (i) extend the fixed maturity of any Debenture,
reduce the rate or extend the time for payment of interest thereon, reduce the
principal amount thereof or premium, if any, thereon, reduce any amount payable
upon redemption thereof, change the obligation of the Company to redeem any
Debenture upon the happening of any Fundamental Change in a manner adverse to
the holders of the Debentures, impair the right of a holder to institute suit
for the payment thereof, change the currency in which the Debentures are
payable, impair the right to convert the Debentures into Common Stock subject to
the terms set forth in the Indenture, or modify the provisions of the Indenture
with respect to the subordination of the Debentures in a manner adverse to the
holders of the Debentures in any material respect, without the consent of each
holder of a Debenture so affected or (ii) reduce the aforesaid percentage of
Debentures whose holders are required to consent to any such modification of the
Indenture or any such supplemental indenture, without the consent of the holders
of all of the Debentures then outstanding. The Indenture also provides for
certain modifications of its terms without the consent of the holders of the
Debentures.
REGISTRATION RIGHTS OF THE DEBENTUREHOLDERS
Pursuant to the terms of the Registration Rights Agreement dated as of
December 10, 1997 between the Company and the Initial Purchasers (the
"Registration Rights Agreement"), the Company has filed with the Commission a
Registration Statement, of which this Prospectus forms a part, covering resales
by holders of the Debentures and the Common Stock issuable upon conversion of
the Debentures. The Company has agreed to keep the Registration Statement
effective until the earlier of (i) the sale pursuant to the Registration
Statement of all the securities registered pursuant to the Registration Rights
Agreement thereunder and (ii) the expiration of the holding period applicable to
such securities under Rule 144(k) under the Securities Act, or any successor
provision. The Registration Rights Agreement provides that the Company may
suspend the use of this Prospectus for a period not to exceed 30 days in any
three-month period, or not to exceed an aggregate of 60 days in any 12-month
period under certain circumstances relating to pending corporate developments,
public filings with the Commission and similar events. The Company has agreed to
pay predetermined liquidated damages to those holders of Debentures and those
holders of Common Stock issued upon conversion of the Debentures who have
requested to sell pursuant to the Registration Statement if the Registration
Statement is unavailable for periods in excess of those permitted above. The
Company has further agreed, if such unavailability continues for an additional
thirty-day period, to pay predetermined liquidated damages to all holders of
Debentures and all holders of Common Stock issued upon conversion of the
Debentures, whether or not such holder has requested to sell pursuant to the
Registration Statement. The Registration Rights Agreement provides for Selling
Securityholders to (i) be named as a selling securityholder in this Prospectus
or a supplement hereto and (ii) deliver this Prospectus together with any
relevant Prospectus Supplement to purchasers, and further provides for Selling
Securityholders to be bound by those provisions of the Registration Rights
Agreement which are applicable to the Selling Securityholders (including
indemnification provisions). The Company has agreed to pay all expenses incident
to the Company's performance of and compliance with the Registration Rights
Agreement (other than underwriting discounts and selling commissions), provide
to each Selling Securityholder copies of this Prospectus and any relevant
Prospectus Supplement, notify the Selling Securityholders by release made to
Reuters Economic Services and Bloomberg Business News when the Registration
Statement has become effective and take certain other actions as are required to
permit, subject to the foregoing, unrestricted resales of the Debentures and the
underlying Common Stock.
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INFORMATION CONCERNING THE TRUSTEE
The First National Bank of Chicago, as Trustee under the Indenture, has
been appointed by the Company as paying agent, conversion agent, registrar and
custodian with regard to the Debentures.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 110,000,000
shares of Common Stock, par value $1.00 per share, and 1,000,000 shares of
preferred stock, without par value. At December 31, 1997, 82,152,665 shares of
Common Stock were issued and outstanding. The Board of Directors, without
further action by the stockholders, is authorized to issue preferred stock in
one or more series and to designate as to any such series the dividend rate,
redemption prices, preferences on liquidation or dissolution, sinking fund
terms, conversion rights, voting rights and any other preferences or special
rights and qualifications. As of December 31, 1997, there was no preferred stock
issued or outstanding, and the Board of Directors has not authorized the
issuance of any preferred stock.
COMMON STOCK
The Common Stock has no preemptive rights and no redemption, sinking
fund or conversion provisions. All shares of Common Stock have one vote on any
matter submitted to the vote of stockholders. The Common Stock does not have
cumulative voting rights. Upon any liquidation of the Company, the holders of
Common Stock are entitled to receive, on a pro rata basis, all assets then
legally available for distribution after payment of debts and liabilities and
preferences on preferred stock, if any. Holders of Common Stock are entitled to
receive dividends when and as declared by the Board of Directors out of funds
legally available therefor (subject to the prior rights of preferred stock, if
any). All outstanding shares of Common Stock are fully paid and nonassessable.
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CERTAIN ANTITAKEOVER PROVISIONS
With certain exceptions, in the event a person owns 10% or more of the
Company's stock entitled to vote, a majority of the shares not so owned is
required to authorize (1) any merger of the Company with such person, (2) any
sale, lease or other disposition of all or substantially all of the Company's
assets to such person or (3) certain issuances and transfers of securities of
the Company to such person. Directors may be removed without cause only by the
affirmative vote of the holders of two-thirds of the Company's capital stock
entitled to vote on the election of directors. The Board of Directors of the
Company, when evaluating any offer of another person to make a tender or
exchange offer, merge or purchase or otherwise acquire all or substantially all
of the assets of the Company, shall, in connection with the exercise of its
judgment in determining what is in the best interests of the Company and its
stockholders, give due consideration to all relevant factors, including the
social and economic effects on employees, customers, suppliers and other
constituents of Omnicare and on the communities in which Omnicare operates or is
located. The sections of the Company's Restated Certificate of Incorporation
described in this paragraph may not be altered, amended or repealed without
approval of two-thirds of the outstanding shares of each class entitled to vote
thereon as a class.
TRANSFER AGENT
Omnicare's transfer agent for its Common Stock is Chase Mellon
Shareholder Services, LLC, Ridgefield Park, New Jersey.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain United States federal tax
consequences relating to an investment in the Debentures. This discussion is
based on existing provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury regulations promulgated thereunder, judicial decisions
and administrative rulings, all of which are subject to change with possible
retroactive effect. This summary does not discuss any state, local or foreign
tax considerations, and does not address all federal income tax consequences
applicable to all categories of investors, some of which may be subject to
special rules, such as life insurance companies, tax-exempt organizations,
dealers in securities or currency, banks or other financial institutions,
investors whose functional currency is not the U.S. dollar, and investors that
hold Debentures as part of a hedge, straddle or conversion transaction. In
addition, this summary is generally limited to Debentures and Common Stock that
are held as "capital assets" within the meaning of the Code. Federal tax
considerations for Non-U.S. Holders are discussed separately below.
Interest on Debentures. Interest paid on the Debentures will be taxable
to a holder as ordinary interest income at the time that such interest is
accrued or received in accordance with the holder's method of tax accounting.
The Debentures were not issued with original issue discount within the meaning
of the Code.
Constructive Dividends. Certain corporate transactions, such as
distributions of assets to holders of Common Stock, may be treated as deemed
distributions to holders of the Debentures if the conversion price of the
Debentures is adjusted to reflect such transaction. Adjustments to the
conversion price, however, made pursuant to a bona fide, reasonable adjustment
formula which has the effect of preventing dilution of the interest of the
holders of Debentures, generally will not be considered to result in a deemed
distribution. Such a deemed distribution will be
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taxable as a dividend, return of capital, or capital gain in accordance with the
rules discussed below under "Dividends on Shares of Common Stock" and holders
may recognize income as a result even though they will receive no cash or
property.
Sale or Exchange of Debentures or Shares of Common Stock. In general, a
holder of Debentures will recognize gain or loss upon the sale, redemption,
retirement or other disposition of Debentures measured by the difference between
(i) the amount of cash and the fair market value of any property received
(except to the extent attributable to accrued interest, which will generally be
taxable as ordinary income) and (ii) such holder's adjusted tax basis in the
Debentures. A holder's tax basis in Debentures generally will equal the cost of
the Debentures to the holder increased by the amount of market discount, if any,
previously taken into income by the holder or decreased by any bond premium
theretofore amortized by the holder with respect to the Debentures. In general,
each holder of the Common Stock into which the Debentures have been converted
will recognize gain or loss upon the sale, exchange, or other disposition of the
Common Stock measured by the difference between (i) the amount of cash and the
fair market value of any property received and (ii) the holder's adjusted basis
in the Common Stock. (For a discussion of the basis and holding period of shares
of Common Stock, see "Conversion of Debentures," below.) Subject to the market
discount rules discussed below, the gain or loss on the disposition of
Debentures or Common Stock will be capital gain or loss and will be long-term
gain or loss if the Debentures or shares of Common Stock have been held for more
than one year at the time of such disposition. In the case of individuals, "net
capital gain," i.e. the excess of net long-term capital gain over net short-term
capital loss is generally subject to a reduced rate of federal income tax.
Capital gains and losses from property held for more than 18 months will be
taken into account in determining "adjusted net capital gain," which is subject
to a further reduction in the rate of tax pursuant to a recent amendment of the
Code. Also, in taxable years beginning after December 31, 2000, an additional
reduction in the rate of tax may be available in certain circumstances for
capital gains from property held by the taxpayer for more than five years.
Conversion of Debentures. A holder of Debentures will not recognize
gain or loss on the conversion of the Debentures solely into Common Stock except
with respect to cash in lieu of fractional shares. The holder's tax basis in the
shares of Common Stock received upon conversion of the Debentures will be equal
to the holder's aggregate basis in the Debentures exchanged therefor (less any
portion thereof allocable to cash received in lieu of a fractional share of
Common Stock). The holding period of the Common Stock will generally include the
period during which such holder held the Debentures prior to conversion. Under
current ruling policy of the Internal Revenue Service, cash received in lieu of
a fractional share of Common Stock should generally be treated as a payment in
exchange for such fractional share rather than as a dividend. Gain or loss
recognized on the receipt of cash paid in lieu of such fractional shares
generally will equal the difference between the amount of cash received and the
amount of tax basis allocable to the fractional shares.
Market Discount. The Debentures may be affected by the "market
discount" provisions of the Code. For this purpose, the market discount on a
Debenture will generally be equal to the amount, if any, by which the stated
redemption price at maturity of a Debenture exceeds the holder's tax basis in
the Debenture immediately after its acquisition. Subject to a de minimis
exception, a holder of a Debenture acquired at a market discount will generally
be required to treat as ordinary income any gain recognized on the disposition
of such Debenture to the extent of the accrued market discount on such Debenture
at the time of disposition. In general, market discount will be treated as
accruing on a straight-line basis over the term of the Debenture or, at the
election of the holder, under a constant-yield method. A holder of a Debenture
acquired at a market discount may be required to defer the deduction of a
portion of the interest on any indebtedness incurred or maintained to purchase
or carry such Debenture until the Debenture is disposed of in a taxable
transaction, unless the holder elects to include accrued market discount in
income currently. If a holder acquires a Debenture at a market discount and
receives Common Stock upon conversion of the Debenture, the amount of accrued
market discount through the date of conversion will be treated as ordinary
income upon the disposition of the Common Stock.
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Bond Premium. When a Debenture is acquired only with cash, it is
acquired at a premium if the amount paid for the Debenture (less the amount
deemed attributable to the rights to convert the Debenture to Common Stock)
exceeds the principal amount of the Debenture due at maturity. If a Debenture is
acquired at a premium and held as an investment, a holder may elect to amortize
the premium. If a holder elects to amortize the premium, the interest income on
the Debenture is reduced by an amount of the bond premium allocated to the
interest payment. An election also causes a holder's tax basis in the Debenture
to be reduced by the amount of premium used to offset the interest income. An
election applies to all taxable bonds then owned or subsequently acquired by a
holder. If bonds were acquired prior to the taxable year to which the election
applies, the amortizable premium for such bonds does not include the premium
that would have been amortized in prior years had the election been in effect
during those prior years. For purposes of determining the amount of premium and
the amortization period, the Company will be deemed to exercise its optional
redemption in a manner that maximizes a holder's yield on the Debenture. If a
holder does not elect to amortize the premium, then such premium will be taken
into account for determining gain or loss upon a subsequent sale or exchange of
the Debenture.
Dividends on Common Stock. Distributions on shares of Common Stock will
constitute dividends for United States federal income tax purposes to the extent
of current or accumulated earnings and profits of the Company as determined
under United States federal income tax principles. Dividends paid to holders
that are United States corporations may qualify for the dividends-received
deduction. To the extent that a holder receives distributions on shares of
Common Stock that would otherwise constitute dividends for United States federal
income tax purposes but that exceed current and accumulated earnings and profits
of the Company, such distributions will be treated first as a non-taxable return
of capital reducing the holder's basis in the shares of Common Stock. Any such
distributions in excess of the holder's basis in the shares of Common Stock will
generally be treated as capital gain.
CERTAIN FEDERAL TAX CONSIDERATIONS APPLICABLE TO NON-U.S. HOLDERS
For purposes of this summary, the term "U.S. Holder" means a beneficial
owner of Debentures or Common Stock that is (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of its source, and (iv) a trust if (a) a court within
the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more U.S. persons have the authority
to control all substantial decisions of the trust. The term "Non-U.S. Holder"
means a beneficial owner of Debentures or Common Stock other than a U.S. Holder.
Interest on Debentures. Generally, interest paid on Debentures to a
Non-U.S. Holder will not be subject to United States federal income tax if (i)
such interest is not effectively connected with the conduct of a trade or
business within the United States by such Non-U S. Holder, (ii) the Non-U.S.
Holder does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote, is not a
bank receiving interest on an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of its trade or business, and is
not a controlled foreign corporation with respect to which the Company is a
"related person" within the meaning of the Code, and (iii) the beneficial owner,
under penalty of perjury, certifies that the owner is not a United States person
and provides the owner's name and address. For purposes of determining ownership
of stock of the Company, a Non-U.S. Holder of Debentures will be deemed to own
the Common Stock into which the Debentures could be converted. If certain
requirements are satisfied, the certification described in clause (iii) above
may be provided by a securities clearing organization, a bank, or other
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financial institution that holds customers' securities in the ordinary course of
its trade or business. Under recently adopted United States Treasury
regulations, which generally are effective for payments made after December 31,
1998, subject to certain transition rules, the certification described in clause
(iii) above may also be provided by a qualified intermediary on behalf of one or
more beneficial owners or other intermediaries, provided that such intermediary
has entered into a withholding agreement with the Internal Revenue Service and
certain other conditions are met. A Non-U.S. Holder that is not exempt from tax
under the rules described above will generally be subject to United States
federal withholding tax at a rate of 30% unless the interest is effectively
connected with the conduct of a United States trade or business, in which case
the interest will be subject to the United States federal income tax on net
income that applies to United States persons generally. Non-U.S. Holders should
consult applicable tax treaties, which may provide different rules.
Sales or Exchange of Debentures or Shares of Common Stock. A Non-U.S.
Holder generally will not be subject to United States federal income or
withholding tax on gain realized on the sale or exchange of Debentures or Common
Stock unless (i) the holder is an individual who was present in the United
States for 183 days or more during the taxable year and (a) such holder has a
"tax home" in the United States or (b) the gain is attributable to an office or
other fixed place of business maintained in the United States by such holder,
(ii) the gain is effectively connected with the conduct of a trade or business
of the holder in the United States, or (iii) the Company is or has been a
"United States real property holding corporation" at any time within the shorter
of the five-year period preceding such disposition or such holder's holding
period. If the Company becomes a "United States real property holding
corporation," gain recognized on a disposition of Debentures or Common Stock
would not be subject to federal income tax if (i) the Common Stock is "regularly
traded on an established securities market" within the meaning of the Code and
(ii) either (A) the Non-U.S. Holder disposing of Common Stock did not own,
actually or constructively, at any time during the five-year period preceding
the disposition, more than 5% of the Common Stock, or (B) in the case of a
disposition of Debentures, the Non-U.S. Holder did not own, actually or
constructively, Debentures which, as of any date on which such holder acquired
Debentures had a fair market value greater than that of 5% of the Common Stock.
The preceding sentence assumes that the Common Stock is and will continue to be
listed on a domestic stock exchange and regularly quoted by brokers and hence
will be "regularly traded" on an established securities market at the time of
disposition.
Dividends on Shares of Common Stock. Generally, to the extent a
distribution with respect to Common Stock is treated as a dividend (as described
above under "Dividends on Common Stock"), a Non-U.S. Holder will be subject to
United States federal income tax withholding at a rate of 30% unless the
dividend is effectively connected with the conduct of trade or business within
the United States by the Non-U.S. Holder. If the dividend is effectively
connected with the conduct of a trade or business within the United States, the
dividend will be subject to the United States federal income tax on net income
that applies to United States persons generally (and, with respect to corporate
holders, the branch profits tax under certain circumstances). Non-U.S. Holders
should consult any applicable income tax treaties, which may provide for a lower
rate of withholding or other rules different from those described above. A
Non-U.S. Holder (and in the case of Non-U.S. Holders that are treated as
partnerships or otherwise fiscally transparent the partners, shareholders or
other beneficiaries of such Non-U.S. Holders) may be required to satisfy certain
certification requirements in order to claim a reduction of or exemption from
withholding under the foregoing rules.
Estate Tax. Debentures held by an individual who at the time of death
is not a United States citizen or resident, as specially defined for United
States estate tax purposes, will not be subject to United States federal estate
tax provided (i) the Debentures were not held in connection with a United States
trade or business and (ii) the individual does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote. Common Stock owned by such an individual at the
time of death, and in certain circumstances transferred before death, will be
includible in the taxable estate and may be subject to United
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States federal estate tax unless otherwise provided by an applicable tax treaty.
Estates of nonresident aliens are generally allowed a statutory credit which has
the effect of offsetting United States federal estate tax imposed on the first
$60,000 of the taxable estate.
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. Holders. Information reporting and backup withholding may apply to
payments of interest or dividends on or the proceeds of the sale or other
disposition of the Debentures or shares of Common Stock made by the Company
with respect to certain noncorporate U.S. Holders. Such U.S. Holders generally
will be subject to backup withholding at a rate of 31% unless the recipient of
such payment supplies a taxpayer identification number, certified under
penalties of perjury, as well as certain other information, or otherwise
establishes, in the manner prescribed by law, an exemption from backup
withholding. Any amount withheld under backup withholding is allowable as a
credit against the U.S. Holder's federal income tax, upon furnishing the
required information.
Non-U.S. Holders. Generally, information reporting and backup
withholding of United States federal income tax at a rate of 31% may apply to
payments of principal, interest and premium (if any) to Non-U.S. Holders if the
payee fails to certify that the holder is a non-U.S. person or if the Company or
its paying agent has actual knowledge that the payee is a United States person.
The 31% backup withholding tax generally will not apply to dividends paid to
foreign holders outside the United States that are subject to 30% withholding as
discussed above or that are subject to a tax treaty that reduces such
withholding.
The payment of the proceeds on the disposition of Debentures or shares
of Common Stock to or through a United States office of a United States or
foreign broker will be subject to information reporting and backup withholding
unless the owner provides the certification described above or otherwise
establishes an exemption. The proceeds of the disposition by a Non-U.S. Holder
of Debentures or shares of Common Stock to or through a foreign office of a
broker will generally not be subject to backup withholding. However, if such
broker is a U.S. person, a controlled foreign corporation for United States tax
purposes, or a foreign person 50% or more of whose gross income from all sources
for certain periods is effectively connected with a United States trade or
business, information reporting will apply unless such broker has documentary
evidence in its files of the Non-U.S. Holder's foreign status and has no actual
knowledge to the contrary or unless the Non-U.S. Holder otherwise establishes an
exemption. Both backup withholding and information reporting will apply to the
proceeds of such dispositions if the broker has actual knowledge that the payee
is a U.S. Holder.
Recently adopted United States Treasury regulations, which generally
are effective for payments made after December 31, 1998, subject to certain
transition rules, alter the foregoing rules in certain respects. Those
regulations provide presumptions under which a Non-U.S. Holder is subject to
information reporting and backup withholding at the rate of 31% unless the
Company receives certification of the holder's non-U.S. status. Depending on the
circumstances, this certification will need to be provided (i) directly by the
Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder that is treated as a
partnership or other fiscally transparent entity, by the partners, shareholders
or other beneficiaries of such entity, or (iii) certain qualified financial
institutions or other qualified entities on behalf of the Non-U.S. Holder.
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SELLING SECURITYHOLDERS
The Debentures were originally acquired on December 10, 1997 from the
Company by the Initial Purchasers. The Initial Purchasers advised the Company
that the Initial Purchasers have resold the Debentures in transactions exempt
from the registration requirements of the Securities Act to "qualified
institutional buyers" (as defined in Rule 144A of the Securities Act) and
certain institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3), or (7) under the Securities Act). These subsequent purchasers, or their
transferees, pledgees, donees or successors, may from time to time offer and
sell any or all of the Debentures and/or Conversion Shares pursuant to this
Prospectus.
The Debentures and the Conversion Shares have been registered pursuant
to the Registration Rights Agreement which provides that the Company file a
Registration Statement with regard to the Debentures and the Conversion Shares
within 90 days of the date of original issuance of the Debentures and keep such
Registration Statement effective until the earlier of (i) the sale pursuant to
the Registration Statement of all the securities registered pursuant to the
Registration Rights Agreement thereunder and (ii) the expiration of the holding
period applicable to such securities under Rule 144(k) under the Securities Act
or any successor provision. In addition, 264,101 Additional Shares are being
registered pursuant to the Registration Statement for the account of certain
securityholders of the Company. The Selling Securityholders may choose to sell
Debentures and/or Shares from time to time. See "Plan of Distribution."
The following table sets forth the name of each Selling Securityholder
who has provided the Company with notice as of the date of this Prospectus
pursuant to the Registration Rights Agreement of such Selling Securityholder's
intent to sell or otherwise dispose of Debentures and/or Conversion Shares
pursuant to the Registration Statement, the principal amount of Debentures and
the number of Conversion Shares which may be sold from time to time by such
Selling Securityholder pursuant to the Registration Statement and the percentage
of outstanding Debentures and Common Stock beneficially owned by such Selling
Securityholder as of December 31, 1997. No such Selling Securityholder nor any
of its affiliates has held any position or office with, been employed by or
otherwise has had any material relationship with, the Company or any of its
affiliates during the three years prior to the date of this Prospectus. Because
the Selling Securityholders may offer all or some portion of the Debentures and
Conversion Shares, no estimate can be given as to the percentage of Debentures
or Common Stock that will be held by the Selling Securityholders upon
termination of sales pursuant to this Prospectus. In addition, the Selling
Securityholders identified below may have sold, transferred or disposed of all
or a portion of their Debentures since the date on which they provided the
information regarding their holdings in transactions exempt from the
registration requirements of the Securities Act.
<TABLE>
<CAPTION>
Principal Percentage of
Amount of Debentures Outstanding Percentage of Common
Debentures that Beneficially Owned Conversion Shares Stock Beneficially
May be Sold Before Offering That May Be Sold** Owned Before Offering
----------- --------------- ------------------ ---------------------
Name
----
<S> <C> <C> <C> <C>
Aim Balanced Fund $3,500,000 1.014% 88,383 *
Aim Charter Fund $26,500,000 7.681% 669,191 *
</TABLE>
26
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C>
Aim Income Fund $2,000,000 * 50,505 *
Aim Vi Growth & Income $4,000,000 1.159% 101,010 *
American Community Mutual $ 250,000 * 6,313 *
Insurance Company
American Pioneer Life $ 50,000 * 1,262 *
Insurance Company of New York
American Progressive Life & $ 50,000 * 1,262 *
Health Insurance Company of
New York
American Public Entity $ 45,000 * 1,136 *
Excess Pool
American Republic Insurance $ 500,000 * 12,626 *
Company
Anthracite Mutual Fire $ 15,000 * 378 *
Insurance Company
Associated Physicians $ 30,000 * 757 *
Insurance Company
Bank of America Convertible $ 275,000 * 6,944 *
Securities Fund
Bank of America Employee $ 135,000 * 3,409 *
Benefit Convertible Fund
Bank of America Equity $3,310,000 * 83,585 *
Income Fund
BCS Life Insurance Company $ 400,000 * 10,101 *
Capital Markets Transaction, $5,000,000 1.449% 126,262 *
Inc.
Care America Life Insurance $ 20,000 * 505 *
Company
Catholic Relief Insurance $ 220,000 * 5,555 *
Company of America
Century National Insurance $ 780,000 * 19,696 *
Company
CFW-C, L.P. $2,000,000 * 50,505 *
Chicago Mutual Insurance $ 40,000 * 1,010 *
Company
Chrysler Insurance Company $2,500,000 * 63,131 *
Concord Life Insurance $ 100,000 * 2,525 *
Company
Condor Insurance Company $ 110,000 * 2,777 *
Delta Air Lines Master Trust $2,660,000 * 67,171 *
</TABLE>
27
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C>
Farmers Home Mutual $ 95,000 * 2,398 *
Insurance Company
Federated Rural Electric $ 70,000 * 1,767 *
Insurance Company
First Patriot Insurance $ 60,000 * 1,515 *
Company
Frontier Insurance Company $ 500,000 * 12,626 *
Goodville Mutual Casualty $ 40,000 * 1,010 *
Company
Gopher State Mutual $ 85,000 * 2,146 *
Insurance Company
Grain Dealers Mutual $ 90,000 * 2,272 *
Insurance
Guarantee Trust Life $ 500,000 * 12,626 *
Insurance Company
Guaranty Income Life $ 250,000 * 6,313 *
Insurance Company
Holy Family Society $ 40,000 * 1,010 *
Illinois Founders Insurance $ 50,000 * 1,262 *
Company
ISBA Mutual Insurance Company $ 70,000 * 1,767 *
Lebanon Mutual Insurance $ 70,000 * 1,767 *
Company
Lehman Brothers $12,625,000 3.659% 318,813 *
International (Europe)
Lone Star Life Insurance $ 550,000 * 13,888 *
Company
Medico Life Insurance Company $ 320,000 * 8,080 *
MedMarc Insurance Company $ 350,000 * 8,838 *
Michigan Mutual Insurance $ 2,100,000 * 53,030 *
Company
Middle Cities Risk $ 150,000 * 3,787 *
Management Trust
Midwest Security Life $ 170,000 * 4,292 *
Midwestern National Life $ 250,000 * 6,313 *
Insurance Company of Ohio
Millers Casualty Insurance $ 180,000 * 4,545 *
Company of Texas
Millers Mutual Fire $ 1,500,000 * 37,878 *
Insurance Company of Texas
</TABLE>
28
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C>
Mutual Protective Insurance $ 300,000 * 7,575 *
Company
Natwest Securities Limited $5,000,000 * 126,262 *
New Castle Mutual Insurance $ 15,000 * 378 *
Company
Nomic Insurance Company $ 250,000 * 6,313 *
OCM Convertible Limited $ 175,000 * 4,419 *
Partnership
OCM Convertible Trust $4,735,000 1.372% 119,570 *
Old Guard Fire Insurance $ 130,000 * 3,282 *
Company
Old Guard Insurance Company $ 240,000 * 6,060 *
Orrington International Fund $ 185,000 * 4,671 *
Ltd.
Orrington Investments $ 315,000 * 7,954 *
Limited Partnership
Ozark National Life $ 350,000 * 8,838 *
Insurance Company
Pacific Horizon Capital $4,400,000 1.275% 111,111 *
Income Fund
Pacific Innovation Trust $ 180,000 * 4,545 *
Capital Income Fund
Paloma Securities L.L.C $1,000,000 * 25,252 *
Phico Insurance Company $ 150,000 * 3,787 *
Physicians Mutual Insurance $ 150,000 * 3,787 *
Company
Pioneer Insurance Company $ 30,000 * 757 *
Police & Fireman's Insurance $ 60,000 * 1,515 *
Association
Public Employees' Retirement $1,000,000 * 25,252 *
Association of Colorado
Reassurance Company of $ 350,000 * 8,838 *
Hanover
Secura Insurance, A Mutual $ 200,000 * 5,050 *
Company
Security Mutual Life $ 100,000 * 2,525 *
Insurance
Service Life and Casualty $ 40,000 * 1,010 *
Insurance Company
Service Lloyds Insurance $ 40,000 * 1,010 *
Company
</TABLE>
29
<PAGE> 32
<TABLE>
<S> <C> <C> <C> <C>
Shepherd Investments $12,625,000 3.659% 318,813 *
International Ltd.
Silverton International Fund $ 1,100,000 * 27,777 *
Limited
Standard Mutual Insurance $ 125,000 * 3,156 *
Company
State Employees Retirement $ 1,135,000 * 28,661 *
Fund of the State of Delaware
State of Connecticut $ 4,140,000 1.2% 104,545 *
Combined Investment Funds
Texas Builders Insurance $ 80,000 * 2,020 *
Company
Transguard Insurance $ 340,000 * 8,585 *
Company, Inc.
United National Insurance $ 2,000,000 * 50,505 *
Company
United Teacher Associates $ 800,000 * 20,202 *
Insurance Company
Washington International $ 200,000 * 5,050 *
Insurance Company
Western Home Insurance $ 140,000 * 3,535 *
Company
Westward Life Insurance $ 70,000 * 1,767 *
Company
Wisconsin Lawyers Mutual $ 100,000 * 2,525 *
Insurance Company
Wisconsin Mutual Insurance $ 100,000 * 2,525 *
Company
World Insurance Company $ 170,000 * 4,292 *
<FN>
- ----------
* Less than 1%.
** Assumes conversion of full amount of Debentures held by such holder at the
initial rate of $39.60 in principal amount of Debentures per share of
Common Stock.
</TABLE>
30
<PAGE> 33
Set forth below are the names of certain other Selling Securityholders
who acquired shares of Common Stock in certain transactions not related to the
sale of the Debentures and the maximum number of Additional Shares that may be
sold by each such Selling Securityholder from time to time hereunder. Except as
may otherwise be indicated in the footnotes to the table, no such Selling
Securityholder nor any of its affiliates has held any position or office with,
been employed by or otherwise has had any material relationship with, the
Company or any of its affiliates during the three years prior to the date of
this Prospectus. The percentage of Common Stock beneficially owned by each of
the Selling Securityholders identified below both prior to and after giving
effect to the offering being made hereby is less than 1%.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
NAME THAT MAY BE SOLD
---- ----------------
<S> <C>
Pharm-Corp of Maine 66,376(1)
Spectrum Care Pharmacy Limited Liability Company 46,463(1)
Add-On Health Systems, Inc. 59,738(1)
Konsult(2) 61,535(1)
Konsult Data Systems Corporation(3) 15,384(1)
Ralph Kalies(4) 2,737(1)
Michael J. Fiori(4) 11,868(1)
<FN>
- -----------------------------
(1) These Shares were acquired by the Selling Securityholder in connection with
an acquisition by the Company.
(2) The Selling Securityholder is a sole proprietorship owned and operated by
Ralph F. Kalies, Jr.
(3) The Selling Securityholder is a corporation of which Ralph Kalies is the
sole shareholder.
(4) The Selling Securityholder is an employee of the Company or a subsidiary
thereof.
</TABLE>
31
<PAGE> 34
This Prospectus may be supplemented as necessary to set forth
information respecting any Selling Securityholder providing the Company with
notice subsequent to the date of this Prospectus pursuant to the Registration
Rights Agreement of such Selling Securityholder's intent to sell or otherwise
dispose of Debentures and/or Shares pursuant to the Registration Statement.
PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses (other than underwriting discounts and selling commissions)
in connection with the registration and sale of the Debentures and the Shares
covered by this Prospectus.
The Company will not receive any of the proceeds from the offering of
Debentures and the Shares by the Selling Securityholders. Debentures and Shares
offered hereby may be sold from time to time directly by any Selling
Securityholder or, alternatively, through underwriters, broker-dealers or
agents. If Debentures or Shares are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible for underwriting discounts or
commissions or agent's commissions. Such Debentures or Shares may be sold in one
or more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale, or at negotiated prices.
Such sales may be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation service on
which the Debentures or Shares may be listed or quoted at the time of sale, (ii)
in the over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv) through the
writing of options. In connection with sales of the Debentures or Shares or
otherwise, any Selling Securityholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Debentures or
Shares in the course of hedging the positions they assume. Any Selling
Securityholder may also sell short and deliver Debentures or Shares to close out
such short positions, or loan or pledge Debentures or Shares to broker-dealers
that in turn may sell such securities.
The outstanding Common Stock is publicly traded on the New York Stock
Exchange. The Initial Purchasers have advised the Company that they are making
and currently intend to continue making a market in the Debentures; however,
they are not obligated to do so and any such market-making may be discontinued
at any time without notice, in the sole discretion of the Initial Purchasers.
The Company does not intend to apply for listing of the Debentures on any
securities exchange. Accordingly, no assurance can be given as to the
development or liquidity of any trading market that may develop for the
Debentures. See "Risk Factors--Absence of Public Market; Transfer Restrictions."
The Selling Securityholders and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Debentures or the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, in which event any commissions
received by such broker-dealers, agents or underwriters and any profits realized
by the Selling Securityholders on the resales of the Debentures or the Shares
may be deemed to be underwriting commissions or discounts under the Securities
Act.
32
<PAGE> 35
In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the
Debentures or Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described herein.
The Debentures were originally sold by the Company to the Initial
Purchasers in December 1997 in a private placement. The Company agreed to
indemnify and hold the Initial Purchasers harmless against certain liabilities
under the Securities Act that could arise in connection with the sale of the
Debentures by the Initial Purchasers. The Registration Rights Agreement provides
for the Company and the Selling Securityholders to indemnify each other against
certain liabilities arising under the Securities Act.
The Company has agreed pursuant to the Registration Rights Agreement to
use its best efforts to cause the Registration Statement to which this
Prospectus relates to become effective as promptly as is practicable and to keep
the Registration Statement effective until the earlier of (i) the sale pursuant
to the Registration Statement of all the securities registered pursuant to the
Registration Rights Agreement thereunder and (ii) the expiration of the holding
period applicable to such securities under Rule 144(k) under the Securities Act
or any successor provision. The Registration Rights Agreement provides that the
Company may suspend the use of this Prospectus in connection with sales of
Debentures and Shares by holders for a period not to exceed 30 days in any
three-month period, or not to exceed an aggregate of 60 days in any 12-month
period, under certain circumstances relating to pending corporate developments,
public filings with the Commission and similar events. Expenses of preparing and
filing the Registration Statement and all post-effective amendments will be
borne by the Company.
LEGAL MATTERS
The validity of the Debentures and the Shares will be passed upon for
the Company by Thompson Hine & Flory LLP, Dayton, Ohio.
EXPERTS
The audited financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (as amended on Form 10K/A filed August 6, 1997) have been so
incorporated in reliance on the report of Price Waterhouse LLP to the extent and
for the periods appearing therein, given on the authority of said firm as
experts in auditing and accounting.
33
<PAGE> 36
The consolidated financial statements of American Medserve Corporation
as of December 31, 1996 and 1995 and for the year ended December 31, 1996, the
six months ended December 31, 1995 and the year ended June 30, 1995 incorporated
in this Prospectus by reference to Omnicare's Form 8-K dated September 12, 1997
(as amended September 29, 1997 and December 4, 1997) have been audited by Ernst
& Young LLP, independent accountants, as stated in their report appearing
therein.
34
<PAGE> 37
================================================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE DEBENTURES OR THE SHARES OF COMMON STOCK OFFERED HEREBY,
NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
-------------------
TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION.......................................................2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE.............................................................2
THE COMPANY.................................................................2
RISK FACTORS................................................................3
USE OF PROCEEDS.............................................................6
RATIO OF EARNINGS TO FIXED CHARGES..........................................6
DESCRIPTION OF DEBENTURES.................................................. 6
DESCRIPTION OF CAPITAL STOCK...............................................17
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS................................................18
SELLING SECURITYHOLDERS....................................................22
PLAN OF DISTRIBUTION.......................................................27
LEGAL MATTERS..............................................................29
EXPERTS....................................................................29
================================================================================
================================================================================
OMNICARE, INC.
$345,000,000 Principal Amount of
5% Convertible Subordinated Debentures
due 2007
8,976,222 Shares of
Common Stock
PROSPECTUS
, 1998
-------------------
================================================================================
<PAGE> 38
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with the
distribution of the securities being registered are as follows:
SEC Registration Fee........................................ $104,017
NYSE Listing Fee............................................ 1,500
Accounting Fees and Expenses................................ 5,000
Legal Fees and Expenses..................................... 50,000
Miscellaneous............................................... 39,483
--------
Total....................................................... $200,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation and Bylaws of Omnicare, and
separate Indemnification Agreements, provide for the indemnification of each
director and officer of Omnicare in connection with any claim, action, suit or
proceeding brought or threatened by reason of his or her position with Omnicare.
In addition, the General Corporation Law of the State of Delaware ("Delaware
Law") permits Omnicare to indemnify its directors, officers and others against
judgments, fines, amounts paid in settlement and attorneys' fees resulting from
various types of legal actions or proceedings if the actions of the party being
indemnified meet the standards of conduct specified in the Delaware Law.
The Company's directors and officers are, in addition, insured against
loss arising from any claim against them or a wrongful act or omission with
certain exceptions and limitations.
<PAGE> 39
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1 Indenture dated as of December 10, 1997 between the Company and The
First National Bank of Chicago, as Trustee
4.2 Form of Debenture (included in Exhibit 4.1)
4.3 Registration Rights Agreement dated as of December 10, 1997 between the
Company and Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
NationsBanc Montgomery Securities, Inc., Smith Barney Inc. and William
Blair & Company
5.1 Opinion of Thompson Hine & Flory LLP
12.1 Statement re: calculation of ratio of earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Thompson Hine & Flory LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
25.1 Statement of Eligibility of the Trustee on Form T-1
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes:
<PAGE> 40
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, That paragraphs (1)(i) and (1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
<PAGE> 41
(4) For purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 6th day of
February, 1998.
OMNICARE, INC.
By: /s/ Joel F. Gemunder
-----------------------------
Joel F. Gemunder
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Edward L. Hutton, Joel
F. Gemunder and Cheryl D. Hodges, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorneys-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
<PAGE> 43
<TABLE>
<S> <C> <C>
/s/ Edward L. Hutton Chairman and Director February 6, 1998
- --------------------------- (Principal Executive Officer)
Edward L. Hutton
/s/ Joel F. Gemunder President and Director February 6, 1998
- --------------------------- Principal Executive Officer)
Joel F. Gemunder
/s/ David W. Froesel, Jr. Senior Vice President and Chief February 6, 1998
- --------------------------- Financial Officer (Principal
David W. Froesel, Jr. Financial Officer and Principal
Accounting Officer)
/s/ Ronald K. Baur Director February 6, 1998
- ---------------------------
Ronald K. Baur
/s/ Kenneth W. Chesterman Director February 6, 1998
- ---------------------------
Kenneth W. Chesterman
/s/ Charles H. Erhart Director February 6, 1998
- ---------------------------
Charles H. Erhart, Jr.
/s/ Mary Lou Fox Director February 6, 1998
- ---------------------------
Mary Lou Fox
/s/ Cheryl D. Hodges Director February 6, 1998
- ---------------------------
Cheryl D. Hodges
/s/ Thomas C. Hutton Director February 6, 1998
- ---------------------------
Thomas C. Hutton
</TABLE>
<PAGE> 44
<TABLE>
<S> <C> <C>
/s/ Patrick E. Keefe Director February 6, 1998
- ---------------------------
Patrick E. Keefe
/s/ Sandra E. Laney Director February 6, 1998
- ---------------------------
Sandra E. Laney
/s/ Andrea R. Lindell Director February 6, 1998
- ---------------------------
Andrea R. Lindell
/s/ Sheldon Margen Director February 6, 1998
- ---------------------------
Sheldon Margen
/s/ Kevin J. McNamara Director February 6, 1998
- ---------------------------
Kevin J. McNamara
/s/ John M. Mount Director February 6, 1998
- ---------------------------
John M. Mount
/s/ D. Walter Robbins, Jr. Director February 6, 1998
- ---------------------------
D. Walter Robbins, Jr.
</TABLE>
<PAGE> 45
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
<TABLE>
<S> <C>
4.1 Indenture dated as of December 10, 1997 between the Company and
The First National Bank of Chicago, as Trustee
4.2 Form of Debenture (included in Exhibit 4.1)
4.3 Registration Rights Agreement dated as of December 10, 1997 between
the Company and Morgan Stanley & Co. Incorporated, Credit Suisse
First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, NationsBanc Montgomery Securities, Inc., Smith
Barney Inc. and William Blair & Company
5.1 Opinion of Thompson Hine & Flory LLP
12.1 Statement re: calculation of ratio of earnings to fixed charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Thompson Hine & Flory LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
25.1 Statement of Eligibility of the Trustee on Form T-1
</TABLE>
<PAGE> 1
Exhibit 4.1
OMNICARE, INC.
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
INDENTURE
DATED AS OF DECEMBER 10, 1997
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2007
<PAGE> 2
OMNICARE, INC.
Reconciliation and Tie Between the Trust Indenture Act of 1939
and Indenture, dated as of December 10, 1997, between Omnicare Inc. and The
First National Bank of Chicago, as Trustee.
ACT SECTION INDENTURE SECTION
Section 319(a)(1) 8.9
(a)(2) 8.9
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 8.9
(b) 8.8; 8.9; 8.10; 8.11
Section 311(a) 8.13
(b) 8.13
(b)(2) 6.3(a)
Section 312(a) 6.1; 6.2(a)
(b) 6.2(b)
(c) 6.2(c)
Section 313(a) 6.3(a)
(b) 6.3(a)
(c) 6.3(a)
(d) 6.3(b)
Section 314(a) 6.14
(b) Not Applicable
(c)(1) 16.5
(c)(2) 16.5
<PAGE> 3
(c)(3) Not Applicable
(d) Not Applicable
(e) 16.5
Section 315(a) 8.1
(b) 7.8
(c) 8.1
(d) 8.1
(d)(1) 8.1(a)
(d)(2) 8.1(b)
(d)(3) 8.1(c)
(e) 7.9
Section 316(a) 7.7
(a)(1)(A) 7.7
(a)(1)(B) 7.7
(a)(2) Not Applicable
(b) 7.4
Section 317(a)(1) 7.5
(a)(2) 7.5
(b) 5.4
Section 318(a) 16.7
<PAGE> 4
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS....................................................................................1
SECTION 1.1. DEFINITIONS...........................................................................1
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES........................9
SECTION 2.1. DESIGNATION AMOUNT AND ISSUE OF DEBENTURES............................................9
SECTION 2.2. FORM OF DEBENTURES....................................................................9
SECTION 2.3. DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST............................10
SECTION 2.4. EXECUTION OF DEBENTURES..............................................................12
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES; RESTRICTIONS ON TRANSFER;
DEPOSITARY.........................................................................12
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES......................................20
SECTION 2.7. TEMPORARY DEBENTURES.................................................................21
SECTION 2.8. CANCELLATION OF DEBENTURES PAID, ETC.................................................21
SECTION 2.9. CUSIP NUMBERS........................................................................22
ARTICLE III REDEMPTION OF DEBENTURES....................................................................22
SECTION 3.1. REDEMPTION PRICES....................................................................22
SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES........................................22
SECTION 3.3. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION..........................................23
SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION........................................24
SECTION 3.5. REDEMPTION AT OPTION OF HOLDERS......................................................25
ARTICLE IV SUBORDINATION OF DEBENTURES..................................................................28
SECTION 4.1. AGREEMENT OF SUBORDINATION...........................................................28
SECTION 4.2. PAYMENTS TO DEBENTUREHOLDERS.........................................................28
SECTION 4.3. SUBROGATION OF DEBENTURES............................................................31
SECTION 4.4. AUTHORIZATION TO EFFECT SUBORDINATION................................................32
SECTION 4.5. NOTICE TO TRUSTEE....................................................................32
SECTION 4.6. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS............................................33
SECTION 4.7. NO IMPAIRMENT OF SUBORDINATION.......................................................33
SECTION 4.8. CERTAIN CONVERSIONS NOT DEEMED PAYMENT...............................................33
SECTION 4.9. ARTICLE APPLICABLE TO PAYING AGENTS..................................................34
SECTION 4.10. SENIOR INDEBTEDNESS ENTITLED TO RELY.................................................34
SECTION 4.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.......................34
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY...........................................................35
SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST...........................................35
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY......................................................35
SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE...................................36
SECTION 5.4. PROVISIONS AS TO PAYING AGENT........................................................36
SECTION 5.5. EXISTENCE............................................................................37
SECTION 5.6. MAINTENANCE OF PROPERTIES............................................................37
SECTION 5.7. PAYMENT OF TAXES AND OTHER CLAIMS....................................................37
SECTION 5.8. RULE 144A INFORMATION REQUIREMENT....................................................38
SECTION 5.9. STAY, EXTENSION AND USURY LAWS.......................................................38
SECTION 5.10. COMPLIANCE CERTIFICATE...............................................................38
ARTICLE VI DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.......................39
SECTION 6.1. DEBENTUREHOLDERS' LISTS..............................................................39
SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS.................................................39
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SECTION 6.3. REPORTS BY TRUSTEE...................................................................40
SECTION 6.4. REPORTS BY COMPANY...................................................................40
ARTICLE VII REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT.........................40
SECTION 7.1. EVENTS OF DEFAULT....................................................................40
SECTION 7.2. PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR.....................................42
SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE...........................................44
SECTION 7.4. PROCEEDINGS BY DEBENTUREHOLDER.......................................................45
SECTION 7.5. PROCEEDINGS BY TRUSTEE...............................................................46
SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING...................................................46
SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF DEBENTUREHOLDERS......46
SECTION 7.8. NOTICE OF DEFAULTS...................................................................47
SECTION 7.9. UNDERTAKING TO PAY COSTS.............................................................47
ARTICLE VIII CONCERNING THE TRUSTEE....................................................................47
SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE...............................................47
SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC.................................................49
SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC..................................................49
SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN DEBENTURES............50
SECTION 8.5. MONIES TO BE HELD IN TRUST...........................................................50
SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE.................................................50
SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE....................................................51
SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE.....................................................51
SECTION 8.9. ELIGIBILITY OF TRUSTEE...............................................................51
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE....................................................51
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE......................................................52
SECTION 8.12. SUCCESSION BY MERGER, ETC............................................................53
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS....................................................54
SECTION 8.14. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY..............................54
ARTICLE IX CONCERNING THE DEBENTUREHOLDERS..............................................................54
SECTION 9.1. ACTION BY DEBENTUREHOLDERS...........................................................54
SECTION 9.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS...............................................54
SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS.......................................................55
SECTION 9.4. COMPANY-OWNED DEBENTURES DISREGARDED.................................................55
SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND.........................................55
ARTICLE X DEBENTUREHOLDERS' MEETINGS...................................................................56
SECTION 10.1. PURPOSE OF MEETINGS.................................................................56
SECTION 10.2. CALL OF MEETINGS BY TRUSTEE.........................................................56
SECTION 10.3. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS.....................................57
SECTION 10.4. QUALIFICATIONS FOR VOTING...........................................................57
SECTION 10.5. REGULATIONS.........................................................................57
SECTION 10.6. VOTING..............................................................................58
SECTION 10.7. NO DELAY OF RIGHTS BY MEETING.......................................................58
ARTICLE XI SUPPLEMENTAL INDENTURES....................................................................58
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTURE-HOLDERS....................58
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS............................60
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURE....................................................60
SECTION 11.4. NOTATION ON DEBENTURES..............................................................61
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SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TRUSTEE............61
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE........................................61
SECTION 12.1. COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS.......................................61
SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED.............................................62
SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE..............................................62
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE...............................................63
SECTION 13.1. DISCHARGE OF INDENTURE..............................................................63
SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.....................................63
SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD...................................................64
SECTION 13.4. RETURN OF UNCLAIMED MONIES..........................................................64
SECTION 13.5. REINSTATEMENT.......................................................................64
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.........................64
SECTION 14.1. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS...............................64
ARTICLE XV CONVERSION OF DEBENTURES..................................................................65
SECTION 15.1. RIGHT TO CONVERT....................................................................65
SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION; NO
ADJUSTMENT FOR INTEREST OR DIVIDENDS...............................................65
SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES..........................................67
SECTION 15.4. CONVERSION PRICE....................................................................67
SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE......................................................67
SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE...........................76
SECTION 15.7. TAXES ON SHARES ISSUED..............................................................77
SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENTAL
REQUIREMENTS; LISTING OF COMMON STOCK..............................................77
SECTION 15.9. RESPONSIBILITY OF TRUSTEE...........................................................78
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS..........................................79
ARTICLE XVI MISCELLANEOUS PROVISIONS..................................................................79
SECTION 16.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS..........................................79
SECTION 16.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION..............................................80
SECTION 16.3. ADDRESSES FOR NOTICES, ETC..........................................................80
SECTION 16.4. GOVERNING LAW.......................................................................80
SECTION 16.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO TRUSTEE...........80
SECTION 16.6. LEGAL HOLIDAYS......................................................................81
SECTION 16.7. TRUST INDENTURE ACT.................................................................81
SECTION 16.8. NO SECURITY INTEREST CREATED........................................................81
SECTION 16.9. BENEFITS OF INDENTURE...............................................................81
SECTION 16.10. TABLE OF CONTENTS, HEADINGS, ETC....................................................81
SECTION 16.11. AUTHENTICATING AGENT................................................................82
SECTION 16.12. EXECUTION IN COUNTERPARTS...........................................................82
EXHIBIT A FORM OF DEBENTURE...........................................................................A-1
EXHIBIT B ACCREDITED INVESTOR LETTER..................................................................B-1
EXHIBIT C REGISTRATION RIGHTS AGREEMENT...............................................................C-1
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INDENTURE
INDENTURE, dated as of December 10, 1997, between Omnicare,
Inc., a Delaware corporation (hereinafter sometimes called the "Company", as
more fully set forth in Section 1.1), and The First National Bank of Chicago, a
national banking association organized under the laws of the United States of
America, as trustee hereunder (hereinafter sometimes called the "Trustee", as
more fully set forth in Section 1.1).
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue of its 5% Convertible Subordinated Debentures due 2007
(hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $345,000,000 and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to
be borne by the Debentures, a form of assignment, a form of option to elect
repayment upon a Fundamental Change, and a form of conversion notice to be borne
by the Debentures are to be substantially in the forms hereinafter provided for;
and
WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee or a
duly authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized.
NOW THEREFORE THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. The terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. All
other terms used in this Indenture that are
<PAGE> 8
defined in the Trust Indenture Act or which are by reference therein defined in
the Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires) shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
the execution of this Indenture. The words "herein," "hereof," "hereunder," and
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.
AFFILIATE: The term "Affiliate" of any specified Person shall
mean any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
APPLICABLE PRICE: The term "Applicable Price" shall mean (i)
in the event of a Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by the holder of one share of
Common Stock and (ii) in the event of any other Fundamental Change, the
arithmetic average of the Closing Price for the Common Stock (determined as set
forth in Section 15.5(h)) during the ten Trading Days (as defined in Section
15.5(h)) prior to (A) the record date for the determination of the holders of
Common Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change, or, (B) if there is no such record
date, the date upon which the holders of the Common Stock shall have the right
to receive such cash, securities, property or other assets in connection with
the Fundamental Change.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean
the Board of Directors of the Company or a committee of such Board duly
authorized to act for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
CLOSING PRICE: The term "Closing Price" shall have the meaning
specified in Section 15.5(h)(1).
COMMISSION: The term "Commission" shall mean the Securities
and Exchange Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of
any class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.6, however, shares
issuable on conversion of Debentures shall include only shares of the class
designated as common stock of the Company at the
2
<PAGE> 9
date of this Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
COMPANY: The term "Company" shall mean Omnicare, Inc., a
Delaware corporation, having its principal office at 50 East RiverCenter Blvd.
- -- Suite 1530, Covington, Kentucky 41011 and subject to the provisions of
Article XII, shall include its successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall have the
meaning specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or
other similar term, shall mean the principal office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated,
located at One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Securities Division.
CREDIT AGREEMENT: The term "Credit Agreement" shall mean that
certain Credit Agreement, dated as of October 22, 1996, among the Company, The
First National Bank of Chicago, as Agent, and the lenders party thereto, as
amended through the date hereof, as further amended, amended and restated,
supplemented or otherwise modified from time to time.
CUSTODIAN: The term "Custodian" shall mean The First National
Bank of Chicago, as custodian with respect to the Debentures in global form, or
any successor entity thereto.
DEBENTURE OR DEBENTURES: The terms "Debenture" or "Debentures"
shall mean any Debenture or Debentures, as the case may be, authenticated and
delivered under this Indenture, including the Global Debenture.
DEBENTUREHOLDER OR HOLDER: The terms "Debentureholder" or
"holder" as applied to any Debenture, or other similar terms (but excluding the
term "beneficial holder"), shall mean any person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.
DEBENTURE REGISTER: The term "Debenture register" shall have
the meaning specified in Section 2.5.
DEFAULT: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.
3
<PAGE> 10
DEPOSITARY: The term "Depositary" shall mean, with respect to
the Debentures issuable or issued in whole or in part in global form, the person
specified in Section 2.5(d) as the Depositary with respect to such Debentures,
until a successor shall have been appointed and become such pursuant to the
applicable provisions of this Indenture, and thereafter, "Depositary" shall mean
or include such successor.
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior
Indebtedness" shall mean Senior Indebtedness under the Credit Agreement or any
other particular Senior Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company is a party) expressly provides that
such Senior Indebtedness shall be "Designated Senior Indebtedness" for purposes
of this Indenture (provided that such instrument, agreement or other document
may place limitations and conditions on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness). If any payment made to
any holder of any Designated Senior Indebtedness or its Representative with
respect to such Designated Senior Indebtedness is rescinded or must otherwise be
returned by such holder or Representative upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the reinstated Indebtedness of the
Company arising as a result of such rescission or return shall constitute
Designated Senior Indebtedness effective as of the date of such rescission or
return.
EXCHANGE ACT: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
EVENT OF DEFAULT: The term "Event of Default" shall mean any
event specified in Section 7.1(a), (b), (c), (d) or (e).
FUNDAMENTAL CHANGE: The term "Fundamental Change" shall mean
the occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, be converted into, be
acquired for, or constitute in all material respects solely the right to
receive, consideration which is not all or substantially all common stock which
is (or, upon consummation of or immediately following such transaction or event,
will be) listed on a United States national securities exchange or approved for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise).
INDEBTEDNESS: The term "Indebtedness" shall mean, with respect
to any Person, and without duplication, (a) all indebtedness, obligations and
other liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to
4
<PAGE> 11
the whole of the assets of such Person or to only a portion thereof) (other than
any account payable or other accrued current liability or obligation incurred in
the ordinary course of business in connection with the obtaining of materials or
services); (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances; (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a third
party to purchase such leased property; (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement; (e) all direct or
indirect guaranties or similar agreements by such Person in respect of, and
obligations or liabilities (contingent or otherwise) of such Person to purchase
or otherwise acquire or otherwise assure a creditor against loss in respect of
indebtedness, obligations or liabilities of another Person of the kind described
in clauses (a) through (d); (f) any indebtedness or other obligations described
in clauses (a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall
have been assumed by such Person; and (g) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (f).
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
INITIAL PURCHASERS: The term "Initial Purchasers" shall mean
Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, NationsBanc Montgomery
Securities, Inc., Smith Barney Inc. and William Blair & Company, L.L.C.
INSTITUTIONAL ACCREDITED INVESTOR: The term "Institutional
Accredited Investor" shall mean an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
LIQUIDATED DAMAGES: The term "Liquidated Damages" shall have
the meaning specified in Section 2(f) of the Registration Rights Agreement.
NON-U.S. PERSON: The term Non-U.S. Person shall mean a person
other than a U.S. Person (as defined in Regulation S).
5
<PAGE> 12
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when
used with respect to the Company, shall mean a certificate signed by both (a)
the President, the Chief Executive Officer, any Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) by the Treasurer or any Assistant Treasurer or Secretary or any Assistant
Secretary of the Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company, or other counsel reasonably acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference
to Debentures, shall, subject to the provisions of Section 9.4, mean, as of any
particular time, all Debentures authenticated and delivered by the Trustee under
this Indenture, except
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article XIII;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.6; and
(d) Debentures converted into Common Stock pursuant to Article
XV and Debentures deemed not outstanding pursuant to Article III.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice"
shall have the meaning specified in Section 4.2.
PERSON: The term "Person" shall mean a corporation, an
association, a partnership, a limited liability company, an individual, a joint
venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
PORTAL MARKET: The term "The Portal Market" shall mean The
Portal Market operated by the National Association of Securities Dealers, Inc.
or any successor thereto.
PREDECESSOR DEBENTURE: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.6 in lieu of a
6
<PAGE> 13
lost, destroyed or stolen Debenture shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debenture that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional
buyer" as defined in Rule 144A.
REFERENCE MARKET PRICE: The term "Reference Market Price"
initially shall mean $20 and in the event of any adjustment to the Conversion
Price pursuant to Sections 15.5(a), (b), (c), (d), (e), (f) or (g) the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $20 to the initial Conversion Price specified
in the form of Debenture attached hereto (without regard to any adjustment
thereto).
REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights
Agreement" shall mean that certain Registration Rights Agreement, dated as of
December 10, 1997, between the Company and the Initial Purchasers, as amended
from time to time in accordance with its terms, a copy of which is attached as
Exhibit C hereto.
REGULATION S: The term "Regulation S" shall mean Regulation S
as promulgated under the Securities Act.
REPRESENTATIVE: The term "Representative" shall mean the (a)
indenture trustee or other trustee, agent or representative for any Senior
Indebtedness or (b) with respect to any Senior Indebtedness that does not have
any such trustee, agent or other representative, (i) in the case of such Senior
Indebtedness issued pursuant to an agreement providing for voting arrangements
as among the holders or owners of such Senior Indebtedness, any holder or owner
of such Senior Indebtedness acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Indebtedness and (ii) in
the case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
RESPONSIBLE OFFICER: The term "Responsible Officer," when used
with respect to the Trustee, shall mean an officer of the Trustee in the
Corporate Trust Office assigned and duly authorized by the Trustee to administer
its corporate trust matters.
RESTRICTED SECURITIES: The term "Restricted Securities" shall
have the meaning specified in Section 2.5.
RULE 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
SECURITIES ACT: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" shall mean
the principal of, premium, if any, interest (including all interest accruing
subsequent to the
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commencement of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding) and rent
payable on or in connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Debentures or expressly provides that
such Indebtedness is "pari passu" or "junior" to the Debentures. Notwithstanding
the foregoing, the term Senior Indebtedness shall not include any Indebtedness
of the Company to any subsidiary of the Company, a majority of the voting stock
of which is owned, directly or indirectly, by the Company. If any payment made
to any holder of any Senior Indebtedness or its Representative with respect to
such Senior Indebtedness is rescinded or must otherwise be returned by such
holder or Representative upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, the reinstated Indebtedness of the Company arising as
a result of such rescission or return shall constitute Senior Indebtedness
effective as of the date of such rescission or return.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary"
shall mean, as of any date of determination, a subsidiary of the Company, a
majority of the voting stock or other voting power of which is owned directly or
indirectly by the Company, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Company's total consolidated
assets or (b) the total revenue of which represented 10% or more of the
Company's consolidated total revenue for the most recently completed fiscal
year.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to
any Person, (i) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
TRADING DAY: The term "Trading Day" shall have the meaning
specified in Section 15.5(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 15.5(d).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean
the Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.6;
provided, however, that in
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the event the Trust Indenture Act of 1939 is amended after the date hereof, the
term "Trust Indenture Act" shall mean, to the extent required by such amendment,
the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean The First National Bank
of Chicago, and its successors and any corporation resulting from or surviving
any consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
The definitions of certain other terms are as specified in
Sections 2.5 and 3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.1. DESIGNATION AMOUNT AND ISSUE OF DEBENTURES. The
Debentures shall be designated as "5% Convertible Subordinated Debentures due
2007." Debentures not to exceed the aggregate principal amount of $300,000,000
(or $345,000,000 if the over-allotment option set forth in Section 2 of the
Purchase Agreement dated December 4, 1997 (as amended from time to time by the
parties thereto) by and between the Company and the Initial Purchasers is
exercised in full) (except pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2
hereof) upon the execution of this Indenture, or from time to time thereafter,
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Debentures to or
upon the written order of the Company, signed by its (a) Chief Executive
Officer, President, any Executive or Senior Vice President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "Vice President") and (b) Treasurer or Assistant Treasurer or
its Secretary or any Assistant Secretary, without any further action by the
Company hereunder.
SECTION 2.2. FORM OF DEBENTURES. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
made a part of this Indenture.
Any of the Debentures may have such letters, numbers or other
marks of identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage.
Any Debenture in global form shall represent such of the
outstanding Debentures as shall be specified therein and shall provide that it
shall represent the aggregate amount of outstanding Debentures from time to time
endorsed thereon and that the aggregate amount of outstanding Debentures
represented thereby may from time to
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time be increased or reduced to reflect transfers or exchanges permitted hereby.
Any endorsement of a Debenture in global form to reflect the amount of any
increase or decrease in the amount of outstanding Debentures represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Debentures in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Debenture in global form shall be made to the holder of
such Debenture.
The terms and provisions contained in the form of Debenture
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
SECTION 2.3. DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST.
The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Every
Debenture shall be dated the date of its authentication and shall bear interest
from the applicable date in each case as specified on the face of the form of
Debenture attached as Exhibit A hereto. Interest on the Debentures shall be
computed on the basis of a 360-day year comprised of twelve (12) 30-day months.
The person in whose name any Debenture (or its Predecessor
Debenture) is registered on the Debenture register at the close of business on
any record date with respect to any interest payment date shall be entitled to
receive the interest payable on such interest payment date, except (i) that the
interest payable upon redemption (unless the date of redemption is an interest
payment date) will be payable to the person to whom principal is payable and
(ii) as set forth in the next succeeding sentence. In the case of any Debenture
(or portion thereof) which is converted into Common Stock of the Company during
the period from (but excluding) a record date to (but excluding) the next
succeeding interest payment date either (i) if such Debenture (or portion
thereof) has been called for redemption on a redemption date which occurs during
such period, or is to be redeemed in connection with a Fundamental Change on a
Repurchase Date (as defined in Section 3.5) which occurs during such period, the
Company shall not be required to pay interest on such interest payment date in
respect of any such Debenture (or portion thereof) except to the extent required
to be paid upon redemption of such Debenture or portion thereof pursuant to
Section 3.3 or 3.5 hereof or (ii) if otherwise, any Debenture (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted. Interest may, as the Company shall specify to
the paying agent in writing by each record date, be paid either (i) by check
mailed to the address of the person entitled thereto as it appears in the
Debenture register (provided that a holder of Debentures with an aggregate
principal amount in excess of $2,000,000 shall, at the written election of such
holder, be paid by wire transfer in immediately available funds) or (ii) by
transfer to an account maintained by such person located in the United States;
provided, however, that payments to the Depositary will be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.
The term
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"record date" with respect to any interest payment date shall mean the May 15 or
November 15 preceding said June 1 or December 1, respectively.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any said June 1 or December 1 (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Debentureholder on the relevant record date by virtue of his having been such
Debentureholder; and such Defaulted Interest shall be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below;
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) are registered at the
close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest to be paid on each Debenture and the date of the
payment (which shall be not less than twenty-five (25) days after
the receipt by the Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall be not more than
fifteen (15) days and not less than ten (10) days prior to the date
of the proposed payment, and not less than ten (10) days after the
receipt by the Trustee of the notice of the proposed payment, the
Trustee shall promptly notify the Company of such special record
date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first-class postage
prepaid, to each Debentureholder at his address as it appears in
the Debenture register, not less than ten (10) days prior to such
special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been
so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Debentures (or their respective Predecessor
Debentures) were registered at the close of business on such
special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.3.
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation
system on which the Debentures may be listed or designated for
issuance, and upon such notice as may be required by such exchange
or automated quotation system, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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SECTION 2.4. EXECUTION OF DEBENTURES. The Debentures shall be signed in
the name and on behalf of the Company by the facsimile signature of its Chief
Executive Officer, President, any Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") and attested by the facsimile
signature of its Secretary or any of its Assistant Secretaries or Treasurer or
any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debentures shall cease to be such officer before the Debentures so signed
shall have been authenticated and delivered by the Trustee, or disposed of by
the Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company; and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer:
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES; RESTRICTIONS
ON TRANSFER; DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Debenture register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Debentures and of transfers of Debentures. The
Debenture register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "Debenture registrar" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Debenture
to the Debenture registrar or any co-registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.5, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.
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Debentures may be exchanged for other Debentures of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Debentures to be exchanged at any such office or agency
maintained by the Company pursuant to Section 5.2. Whenever any Debentures are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Debentures which the Debentureholder making the
exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.
All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Debentures surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of
transfer or for exchange, redemption or conversion shall (if so required by the
Company or the Debenture registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, and the Debentures shall be duly executed by the Debentureholder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Debentures, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Debentures.
Neither the Company nor the Trustee nor any Debenture
registrar or any Company registrar shall be required to exchange or register a
transfer of (a) any Debentures for a period of fifteen (15) days next preceding
any selection of Debentures to be redeemed or (b) any Debentures or portions
thereof called for redemption pursuant to Section 3.2 or (c) any Debentures or
portion thereof surrendered for conversion pursuant to Article XV or (d) any
Debentures or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.5.
(b) So long as the Debentures are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Debentures that upon initial issuance are beneficially owned by QIBs and all
Debentures that are beneficially owned by Non-U.S. Persons as a result of a sale
or transfer after initial issuance will be represented by one or more Debentures
in global form registered in the name of the Depositary or the nominee of the
Depositary (each, a "Global Debenture"), except as otherwise specified below.
The transfer and exchange of beneficial interests in any such Global Debenture
shall be effected through the Depositary in accordance with this Indenture and
the procedures of the Depositary therefor. The Trustee shall make appropriate
endorsements to reflect increases or decreases in the principal amounts of any
such Global Debenture as set forth on the face of the Debenture ("Principal
Amount") to reflect any such transfers. Except as provided below, beneficial
owners of a Global Debenture shall not be entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered holders
of such Debentures in global form.
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(c) So long as the Debentures are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Debenture to a QIB in accordance with Rule 144A or to a Non-U.S.
Person in accordance with Regulation S, and upon receipt of the definitive
Debenture or Debentures being so transferred, together with a certification,
substantially in the form on the reverse of the Debenture, from the transferor
that the transfer is being made in compliance with Rule 144A or to a Non-U.S.
Person in accordance with Regulation S (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on the applicable Global
Debenture to reflect an increase in the aggregate Principal Amount of the
Debentures represented by such Debenture in global form, the Trustee shall
cancel such definitive Debenture or Debentures in accordance with the standing
instructions and procedures of the Depositary, the aggregate Principal Amount of
Debentures represented by such Debenture in global form to be increased
accordingly; provided that no definitive Debenture, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Debenture in global form until such
definitive Debenture is freely tradable in accordance with Rule 144(k); provided
further that the Trustee shall issue Debentures in definitive form upon any
transfer of a beneficial interest in the Debenture in global form to the Company
or any Affiliate of the Company.
Upon any sale or transfer of a Debenture to an Institutional
Accredited Investor (other than pursuant to a registration statement that has
been declared effective under the Securities Act), such Institutional Accredited
Investor shall, prior to such sale or transfer, furnish to the Company and/or
the Trustee a signed letter containing representations and agreements relating
to restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture.
Any Debenture in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by the
Custodian, the Depositary or by the National Association of Securities Dealers,
Inc. in order for the Debentures to be tradeable on The Portal Market or as may
be required for the Debentures to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or Regulation S or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange or automated quotation system upon
which the Debentures may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Debentures are subject.
(d) Every Debenture that bears or is required under this
Section 2.5(d) to bear the legend set forth in this Section 2.5(d) (together
with any Common Stock issued upon conversion of the Debentures and required to
bear the legend set forth in Section 2.5(e), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set forth in this
Section 2.5(d) (including those set forth in the legend set forth below) unless
such restrictions on transfer shall be waived by written consent of the Company,
and the holder of each such Restricted Security, by such holder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d)
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and 2.5(e), the term "transfer" encompasses any sale, pledge, transfer or other
disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.5(e), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A UNITED STATES
PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT
(A) TO OMNICARE, INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
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OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO THE FIRST
NATIONAL BANK OF CHICAGO, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE FIRST NATIONAL BANK
OF CHICAGO, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A
PURCHASER WHO IS NOT A UNITED STATES PERSON, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE FIRST NATIONAL BANK OF CHICAGO, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F)
ABOVE OR UPON ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED
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<PAGE> 23
STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Debenture for exchange to the Debenture registrar in accordance with the
provisions of this Section 2.5, be exchanged for a new Debenture or Debentures,
of like tenor and aggregate principal amount, which shall not bear the
restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in the second paragraph of Section 2.5(b) and in
this Section 2.5(d)), a Debenture in global form may not be transferred as a
whole or in part except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Debentures in global form. Initially, Global
Debentures shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Custodian for Cede
& Co.
If at any time the Depositary for a Debenture in global form
notifies the Company that it is unwilling or unable to continue as Depositary
for such Debenture, the Company may appoint a successor Depositary with respect
to such Debenture. If a successor Depositary is not appointed by the Company
within ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Debentures, will authenticate and deliver,
Debentures in certificated form, in aggregate principal amount equal to the
principal amount of such Debenture in global form, in exchange for such
Debenture in global form.
If a Debenture in certificated form is issued in exchange for
any portion of a Debenture in global form after the close of business at the
office or agency where such exchange occurs on any record date and before the
opening of business at such office or agency on the next succeeding interest
payment date, interest will not be payable on such interest payment date in
respect of such Debenture, but will be payable on such interest payment date,
subject to the provisions of Section 2.3, only to the person to whom interest in
respect of such portion of such Debenture in global form is payable in
accordance with the provisions of this Indenture.
Debentures in certificated form issued in exchange for all or
a part of a Debenture in global form pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and
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<PAGE> 24
authentication, the Trustee shall deliver such Debentures in certificated form
to the persons in whose names such Debentures in certificated form are so
registered.
At such time as all interests in a Debenture in global form
have been redeemed, converted, canceled, exchanged for Debentures in
certificated form, or transferred to a transferee who receives Debentures in
certificated form thereof, such Debenture in global form shall, upon receipt
thereof, be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in a global Debenture is exchanged
for Debentures in certificated form, redeemed, converted, repurchased or
canceled, exchanged for Debentures in certificated form or transferred to a
transferee who receives Debentures in certificated form therefor or any
Debenture in certificated form is exchanged or transferred for part of a
Debenture in global form, the principal amount of such Debenture in global form
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Debenture in global
form, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
(e) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any stock certificate representing Common Stock issued upon
conversion of such Debenture shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of Debentures that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company in writing with written notice
thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) TO OMNICARE, INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN
18
<PAGE> 25
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER
FURNISHES TO CHASE MELLON SHAREHOLDER SERVICES, LLC, AS TRANSFER AGENT
(OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO
SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT
WILL FURNISH TO CHASE MELLON SHAREHOLDER SERVICES, LLC, AS TRANSFER
AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with
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<PAGE> 26
the procedures of the transfer agent for the Common Stock, be exchanged for a
new certificate or certificates for a like number of shares of Common Stock,
which shall not bear the restrictive legend required by this Section 2.5(e).
(f) Any Debenture or Common Stock issued upon the conversion or
exchange of a Debenture that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent,
as the case may be, of satisfactory security or indemnity and evidence, as
described in the preceding paragraph, the Trustee or such authenticating agent
may authenticate any such substituted Debenture and make available for delivery
such Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debenture which has matured or is about to mature or has
been called for redemption or has been tendered for redemption (and not
withdrawn) or is about to be converted into Common Stock shall become mutilated
or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debenture, pay or authorize the payment of or convert or authorize
the conversion of the same (without surrender thereof except in the case of a
mutilated Debenture), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft of such Debenture
and of the ownership thereof.
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<PAGE> 27
Every substitute Debenture issued pursuant to the provisions
of this Section 2.6 by virtue of the fact that any Debenture is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.7. TEMPORARY DEBENTURES. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form (other than in the case of Debentures in global form) and thereupon any or
all temporary Debentures (other than any such Debenture in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of Debentures in
certificated form. Such exchange shall be made by the Company at its own expense
and without any charge therefor. Until so exchanged, the temporary Debentures
shall in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as Debentures in certificated form
authenticated and delivered hereunder.
SECTION 2.8. CANCELLATION OF DEBENTURES PAID, ETC. All Debentures
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Debenture registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall return such canceled Debentures to the Company. If the Company
shall acquire any of the Debentures, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
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<PAGE> 28
SECTION 2.9. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Debentures,
and any such redemption shall not be affected by any defect in or omission of
such numbers. The Company will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1. REDEMPTION PRICES. The Company may not redeem the
Debentures prior to December 6, 2000. At any time on or after December 6, 2000,
the Company may, at its option, redeem all or from time to time any part of the
Debentures on any date prior to maturity, upon notice as set forth in Section
3.2, and at the optional redemption prices set forth in the form of Debenture
attached as Exhibit A hereto, together with accrued interest to, but excluding,
the date fixed for redemption.
SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Debentures pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption at least thirty (30) days prior to the date fixed for
redemption to the holders of Debentures so to be redeemed as a whole or in part
at their last addresses as the same appear on the Debenture register; provided
that if the Company shall give such notice, it shall also give written notice,
and written notice of the Debentures to be redeemed, to the Trustee. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Debenture designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the aggregate
principal amount of Debentures to be redeemed, the CUSIP numbers, the date fixed
for redemption (which shall be a Business Day), the redemption price at which
Debentures are to be redeemed, the place or places of payment, that payment will
be made upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice, and that on and after said date interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Price and the date on which the right to convert such
Debentures or portions thereof into Common Stock will expire. If fewer than all
the Debentures are
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<PAGE> 29
to be redeemed, the notice of redemption shall identify the Debentures to be
redeemed (including CUSIP numbers, if any). In case any Debenture is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof will be
issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to redeem on the redemption date all
the Debentures (or portions thereof) so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to, but excluding, the date
fixed for redemption; provided that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Debenture called for
redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Debenture shall be paid to the Company upon its written request, or, if then
held by the Company shall be discharged from such trust. Whenever any Debentures
are to be redeemed, the Company will give the Trustee written notice in the form
of an Officers' Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption date
as to the aggregate principal amount of Debentures to be redeemed.
If fewer than all the Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or integral multiples thereof), by lot, on a pro rata basis or by another
method the Trustee deems fair and appropriate. If any Debenture selected for
partial redemption is converted in part after such selection, the converted
portion of such Debenture shall be deemed (so far as may be) to be the portion
to be selected for redemption. The Debentures (or portions thereof) so selected
shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Debenture is converted as a whole or in part
before the mailing of the notice of redemption.
Upon any redemption of less than all Debentures, the Company
and the Trustee may (but need not) treat as outstanding any Debentures
surrendered for conversion during the period of fifteen (15) days next preceding
the mailing of a notice of redemption and may (but need not) treat as
outstanding any Debenture authenticated and delivered during such period in
exchange for the unconverted portion of any Debenture converted in part during
such period.
SECTION 3.3. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Debentures or portion of
Debentures with respect to which such notice has been given shall, unless
converted into Common
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<PAGE> 30
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Debentures at the redemption price, together with
interest accrued to said date), interest on the Debentures or portion of
Debentures so called for redemption shall cease to accrue and such Debentures
shall cease after the close of business on the Business Day next preceding the
date fixed for redemption to be convertible into Common Stock and, except as
provided in Sections 8.5 and 13.4, to be entitled to any benefit or security
under this Indenture, and the holders thereof shall have no right in respect of
such Debentures except the right to receive the redemption price thereof and
unpaid interest to (but excluding) the date fixed for redemption. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to (but excluding) the date fixed for redemption;
provided that, if the applicable redemption date is an interest payment date,
the semi-annual payment of interest becoming due on such date shall be payable
to the holders of such Debentures registered as such on the relevant record date
instead of the holders surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
or Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem
any Debentures or mail any notice of optional redemption during the continuance
of a default in payment of interest or premium on the Debentures or of any Event
of Default of which, in the case of any Event of Default other than under
Sections 7.1 (a) or 7.1 (b), a Responsible Officer of the Trustee has knowledge.
If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
borne by the Debenture and such Debenture shall remain convertible into Common
Stock until the principal and premium, if any, shall have been paid or duly
provided for.
SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment bankers or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to (but excluding) the date fixed for redemption, of such
Debentures. Notwithstanding anything to the contrary contained in this Article
III, the obligation of the Company to pay the redemption price of such
Debentures, together with interest accrued to (but excluding) the date fixed for
redemption, shall be deemed to be satisfied and discharged to
24
<PAGE> 31
the extent such amount is so paid by such purchasers. If such an agreement is
entered into, a copy of which will be filed with the Trustee prior to the date
fixed for redemption, any Debentures not duly surrendered for conversion by the
holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article XV) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Debentures shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Debentures. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Debentures shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture.
SECTION 3.5. REDEMPTION AT OPTION OF HOLDERS.
(a) If there shall occur a Fundamental Change, then each
Debentureholder shall have the right, at such holder's option, to require the
Company to redeem all of such holder's Debentures, or any portion thereof that
is an integral multiple of $1,000 principal amount, on the date (the "Repurchase
Date") that is thirty (30) days after the date of the Company Notice (as defined
in Section 3.5(b) below) of such Fundamental Change (or, if such 30th day is not
a Business Day, the next succeeding Business Day). Such repayment shall be made
at 105.000% from the date of initial issuance of the Debentures through November
30, 1998; 104.500% from December 1, 1998 through November 30, 1999; 104.000%
from December 1, 1999 through December 5, 2000; 103.500% from December 6, 2000
through November 30, 2001 and thereafter at the following prices (expressed as
percentages of the principal amount) in the event of a Fundamental Change
occurring during the twelve (12) month period beginning December 1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
<S> <C> <C>
2001 103.000%
2002 102.500%
2003 102.000%
2004 101.500%
2005 101.000%
2006 100.500%
</TABLE>
and 100% at December 1, 2007; provided that, if the Applicable Price with
respect to the Fundamental Change is less than the Reference Market Price, the
Company shall redeem such Debentures at a price equal to the foregoing
redemption price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. In each case, the Company shall also pay to
such holders accrued interest on the redeemed Debentures to, but excluding, the
Repurchase Date; provided that, if such Repurchase
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<PAGE> 32
Date is June 1 or December 1, then the interest payable on such date shall be
paid to the holders of record of the Debentures on the next preceding May 15 or
November 15, respectively.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and, upon the Company's written direction to the Trustee,
the Trustee shall authenticate and deliver to the holder thereof, at the expense
of the Company, a new Debenture or Debentures, of authorized denominations, in
principal amount equal to the unredeemed portion of the Debentures so presented.
(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company, or, at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below), the Trustee in the name
of and at the expense of the Company, shall mail or cause to be mailed to all
holders of record on the date of the Fundamental Change a notice (the "Company
Notice") of the occurrence of such Fundamental Change and of the redemption
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.2. The Company shall also deliver a copy of the Company
Notice to the Trustee at such time as it is mailed to Debentureholders.
Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the price at which the
Company shall be obligated to redeem Debentures, the latest time (not less than
thirty (30) days after the date of the Company's Notice of the Fundamental
Change) on the Repurchase Date by which the holder must exercise the redemption
right (the "Fundamental Change Expiration Time"), that the holder shall have the
right to withdraw any Debentures surrendered prior to the Fundamental Change
Expiration Time, a description of the procedure which a Debentureholder must
follow to exercise such redemption right and to withdraw any surrendered
Debentures, the place or places where the holder is to surrender such holder's
Debentures, and the amount of interest accrued on each Debenture to the
Repurchase Date.
No failure of the Company to give the foregoing notices and no
defect therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.5.
(c) For a Debenture to be so redeemed at the option of the
holder, the Company must receive at the office or agency of the Company
maintained for that purpose or, at the option of such holder, the Corporate
Trust Office, such Debenture with the form entitled "Option to Elect Repayment
Upon A Fundamental Change" on the reverse thereof duly completed, together with
such Debentures duly endorsed for transfer, on or before the Fundamental Change
Expiration Time. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding absent manifest
error.
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<PAGE> 33
(d) On or prior to the Repurchase Date, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.4) an amount of money sufficient to repay on the
Repurchase Date all the Debentures to be repaid on such date at the appropriate
redemption price, together with accrued interest to (but excluding) the
Repurchase Date; provided that if such payment is made on the Repurchase Date it
must be received by the Trustee or paying agent, as the case may be, by 10:00
a.m. New York City time, on such date: Payment for Debentures surrendered for
redemption (and not withdrawn) prior to the Fundamental Change Expiration Time
will be made promptly (but in no event more than five (5) Business Days)
following the Repurchase Date by mailing checks for the amount payable to the
holders of such Debentures entitled thereto as they shall appear on the registry
books of the Company.
(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 15.6 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or another person that are,
or upon issuance will be, traded on a United States national securities exchange
or approved for trading on an established automated over-the-counter trading
market in the United States and such shares constitute at the time such change
or exchange becomes effective in excess of 50% of the aggregate fair market
value of such stock, securities or other property or assets (including cash) (as
determined by the Company, which determination shall be conclusive and binding),
then the Person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Debentures to cause the
Company to repurchase the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.5 and the
definitions of the Applicable Price, Common Stock, Fundamental Change and
Reference Market Price, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to the common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
(f) The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Debentures
in the event of a Fundamental Change.
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ARTICLE IV
SUBORDINATION OF DEBENTURES
SECTION 4.1. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Debentures issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article IV; and each Person holding any Debenture,
whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest
(including Liquidated Damages, if any) on all Debentures (including, but not
limited to, the redemption price with respect to the Debentures called for
redemption in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in the Indenture)
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article IV shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 4.2. PAYMENTS TO DEBENTUREHOLDERS. No payment shall be made
with respect to the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Debentures (including, but not limited to,
the redemption price with respect to the Debentures to be called for redemption
in accordance with Section 3.2 or submitted for redemption in accordance with
Section 3.5, as the case may be, as provided in this Indenture), except payments
and distributions made by the Trustee as permitted by the first or second
paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness occurs and
is continuing (or, in the case of Senior Indebtedness for which there is a
period of grace, in the event of such a default that continues beyond the period
of grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness) (a "Payment Default"), unless and until such Payment Default shall
have been cured or waived or shall have ceased to exist; or
(ii) a default, other than a Payment Default, on any
Designated Senior Indebtedness occurs and is continuing that then permits
holders of such Designated Senior Indebtedness to accelerate its maturity and
the Trustee receives a notice of the default (a "Payment Blockage Notice") from
a holder of Designated Senior Indebtedness, a Representative of Designated
Senior Indebtedness or the Company (a "Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant
to clause (ii) above, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section 4.2 unless and until (A) at least 365 days shall
have elapsed since the initial
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effectiveness of the immediately prior Payment Blockage Notice and (B) all
scheduled payments of principal, premium, if any, and interest (including
Liquidated Damages, if any) on the Debentures that have come due have been paid
in full in cash. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Debentures upon the earlier of:
(1) the date upon which any such Payment Default
is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default, the
earlier of (a) the date upon which such
default is cured or waived or ceases to
exist or (b) 179 days after notice is
received if the maturity of such Designated
Senior Indebtedness has not been
accelerated,
unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Indebtedness before any payment is made on account of
the principal of, premium, if any, or interest (including Liquidated Damages, if
any) on the Debentures (except payments made pursuant to Article XIII from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding up, liquidation or reorganization);
and upon any such dissolution or winding up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the holders of the
Debentures or the Trustee would be entitled, except for the provision of this
Article IV, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior
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Indebtedness in full, in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Debentures or to the Trustee.
For purposes of this Article IV, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article IV with respect
to the Debentures to the payment of all Senior Indebtedness which may at the
time be outstanding; provided that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
are not assumed by the Company or the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 4.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
In the event of the acceleration of the Debentures because of
an Event of Default, no payment or distribution shall be made to the Trustee or
any holder of Debentures in respect of the principal of, premium, if any, or
interest (including Liquidated Damages, if any) on the Debentures (including,
but not limited to, the redemption price with respect to the Debentures called
for redemption in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in the Indenture),
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 4.5, until all Senior Indebtedness has been paid
in full in cash or other payment satisfactory to the holders of Senior
Indebtedness or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Debentures is accelerated because of an Event
of Default, the Company shall promptly notify holders of Senior Indebtedness of
the acceleration.
In the event that, notwithstanding the foregoing provisions,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.2, shall be received by the Trustee or the holders of the Debentures before
all Senior Indebtedness is paid in full in cash or other payment satisfactory to
the holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any
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Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of any
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.6. This Section 4.2
shall be subject to the further provisions of Section 4.5.
SECTION 4.3. SUBROGATION OF DEBENTURES. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article IV (equally
and ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest (including Liquidated Damages, if any)
on the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article IV, and no payment over pursuant to the provisions of this Article IV,
to or for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of cash, property or securities
to or for the benefit of the holders of the Debentures pursuant to the
subrogation provisions of this Article IV, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Debentures. It is understood that the
provisions of this Article IV are and are intended solely for the purposes of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of,
premium, if any, and interest (including Liquidated Damages, if any) on the
Debentures as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Debentures and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the holder of any Debenture from exercising all remedies otherwise
permitted by applicable law
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upon default under this Indenture, subject to the rights, if any, under this
Article IV of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article IV, the Trustee, subject to the provisions of
Section 8.1, and the holders of the Debentures shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Trustee or to the holders of the Debentures, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon and all other facts pertinent thereto or to
this Article IV.
SECTION 4.4. AUTHORIZATION TO EFFECT SUBORDINATION. Each holder of a
Debenture by the holder's acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Debentures.
SECTION 4.5. NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article
IV. Notwithstanding the provisions of this Article IV or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions of this
Article IV, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers' Certificate) or a Representative or a holder or
holders of Senior Indebtedness or from any trustee thereof; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 8.1, shall be entitled in all respects to assume that no such facts
exist; provided that if on a date not less than two Business Days prior to the
date upon which by the terms hereof any such monies may become payable for any
purpose (including, without limitation, the payment of the principal of, or
premium, if any, or interest (including Liquidated Damages, if any) on any
Debenture) the Trustee shall not have received, with respect to such monies, the
notice provided for in this Section 4.5, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
apply moneys received to the purpose for which
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they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary,
nothing shall prevent any payment by the Trustee to the Debentureholders of
monies deposited with it pursuant to Section 13.1, and any such payment shall
not be subject to the provisions of Section 4.1 or 4.2.
The Trustee, subject to the provisions of Section 8.1, shall
be entitled to rely on the delivery to it of a written notice by a
Representative or a person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a Representative or a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. The Trustee shall not be
required to make any payment or distribution to or on behalf of a holder of
Senior Indebtedness pursuant to this Article IV unless it has received
satisfactory evidence as to the amount of Senior Indebtedness held by such
person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article IV.
SECTION 4.6. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article IV, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and,
subject to the provisions of Section 8.1, the Trustee shall not be liable to any
holder of Senior Indebtedness (i) for any failure to make any payments or
distributions to such holder or (ii) if it shall pay over or deliver to holders
of Debentures, the Company or any other person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article IV or
otherwise.
SECTION 4.7. NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
SECTION 4.8. CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes
of this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Debentures in accordance with Article XV shall not be deemed to
constitute a payment or
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distribution on account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on Debentures or on account of the
purchase or other acquisition of Debentures, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 15.3), property or securities (other than junior securities) upon
conversion of a Debenture shall be deemed to constitute payment on account of
the principal of, premium, if any, or interest (including Liquidated Damages, if
any) on such Debenture. For the purposes of this Section 4.8, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article. Nothing
contained in this Article IV or elsewhere in this Indenture or in the Debentures
is intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Indebtedness) and the Debentureholders, the right, which is
absolute and unconditional, of the Holder of any Debenture to convert such
Debenture in accordance with Article XV.
SECTION 4.9. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; provided, however, that the first paragraph of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or
inactions of any other paying agents (including the Company if acting as its own
paying agent) and shall have no control of any funds held by such other paying
agents.
SECTION 4.10. SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article IV, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.
SECTION 4.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Debentureholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company,
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the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including upon redemption pursuant to
Article III), and interest (including Liquidated Damages, if any) on each of the
Debentures at the places, at the respective times and in the manner provided
herein and in the Debentures. Each installment of interest on the Debentures due
on any semi-annual interest payment date may be paid either (i) by check mailed
to the address of the person entitled thereto as it appears in the Debenture
register; provided that the holder of Debentures with an aggregate principal
amount in excess of $2,000,000 shall, at the written election of such holder, be
paid by wire transfer in immediately available funds; or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of Depositary or its nominee.
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
an office or agency in The Borough of Manhattan, The City of New York, where the
Debentures may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in The Borough of Manhattan, The City of New York (which shall
initially be located at 14 Wall Street, 8th Floor, New York, New York 10005).
The Company may also from time to time designate co-registrars
and one or more other offices or agencies where the Debentures may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations. The Company will give prompt written notice to any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying
agent, Debenture registrar, Custodian and conversion agent and each of the
Corporate Trust Office of the Trustee and the office or agency of the Trustee in
The Borough of Manhattan, The City of New York (which shall initially be located
at 14 Wall Street, 8th Floor, New York, New York 10005), shall be considered as
one such office or agency of the Company for each of the aforesaid purposes.
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So long as the Trustee is the Debenture registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in Section 8.10(a)
and the third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.
SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4. PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.4:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the
holders of the Debentures;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debentures) to make any
payment of the principal of and premium, if any, or interest on the
Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal
of, premium, if any, or interest on the Debentures, deposit with the paying
agent a sum sufficient to pay such principal, premium, if any, or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of any failure to take such action; provided that if such deposit is
made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Debentures, set aside, segregate
and hold in trust for the benefit of the holders of the Debentures a sum
sufficient to pay such principal, premium, if any, or interest (including
Liquidated Damages, if any) so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Debentures) to make any payment of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Debentures
when the same shall become due and payable.
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(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.4 is subject to Sections 13.3 and 13.4. The Trustee shall not be responsible
for the actions of any other paying agents (including the Company if acting as
its own paying agent) and shall have no control of any funds held by such other
paying agents.
SECTION 5.5. EXISTENCE. Subject to Article XII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the holders.
SECTION 5.6. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Significant
Subsidiary and not disadvantageous in any material respect to the holders.
SECTION 5.7. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Debentures or with respect
to this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a
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material adverse impact on the Company, or (B) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.
SECTION 5.8. RULE 144A INFORMATION REQUIREMENT. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof (other than a holder or beneficial holder of Debentures or any Common
Stock issued upon conversion thereof that is an Affiliate of the Company) which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of Debentures or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Debentures or such Common Stock and it will take such further action as any
holder or beneficial holder of such Debentures or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Debentures or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Debentures or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
SECTION 5.9. STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Debentures as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.
SECTION 5.10. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
the signer may have knowledge.
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The Company will deliver to the Trustee, forthwith upon
becoming aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 shall
be delivered to the Trustee at its Corporate Trust Office.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
SECTION 6.1. DEBENTUREHOLDERS' LISTS. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each May 15 and November 15 in each year
beginning with May 15, 1998, and at such other times as the Trustee may request
in writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Debentures as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Debenture registrar.
SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 6.1 or maintained by the Trustee in its capacity as
Debenture registrar or co-registrar in respect of the Debentures, if so acting.
The Trustee may destroy any list furnished to it as provided in Section 6.1 upon
receipt of a new list so furnished.
(b) The rights of Debentureholders to communicate with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
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SECTION 6.3. REPORTS BY TRUSTEE.
(a) Within sixty (60) days after May 15 of each year
commencing with the year 1998, the Trustee shall transmit to holders of
Debentures such reports dated as of May 15 of the year in which such reports are
made concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of such report shall, at the time of such
transmission to holders of Debentures, be filed by the Trustee with each stock
exchange and automated quotation system upon which the Debentures are listed and
with the Company. The Company will notify the Trustee in writing within a
reasonable time when the Debentures are listed on any stock exchange or
automated quotation system.
SECTION 6.4. REPORTS BY COMPANY. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON AN EVENT OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest
(including Liquidated Damages, if any) upon any of the Debentures as and when
the same shall become due and payable, and continuance of such default for a
period of thirty (30) days, whether or not such payment is permitted under
Article IV hereof; or
(b) default in the payment of the principal of or premium, if
any, on any of the Debentures as and when the same shall become due and payable
either at
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maturity or in connection with any redemption pursuant to Article III, by
acceleration or otherwise, whether or not such payment is permitted under
Article IV hereof; or
(c) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Debentures or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this Section 7.1
specifically dealt with) continued for a period of sixty (60) days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or to the Company
and a Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate principal amount of the Debentures at the time
outstanding determined in accordance with Section 9.4; or
(d) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or any Significant Subsidiary or its or such
Significant Subsidiary's debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
Significant Subsidiary or any substantial part of the property of the Company or
any Significant Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it or any Significant Subsidiary, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; provided that a liquidation or winding up
of a Significant Subsidiary pursuant to applicable corporate law shall not be
deemed an Event of Default hereunder; or
(e) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or any Significant Subsidiary
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any Significant
Subsidiary or any substantial part of the property of the Company or any
Significant Subsidiary, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1 (d) or (e) with respect to the Company), unless the principal of
all of the Debentures shall have already become due and payable, either the
Trustee or the holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Debentures then outstanding hereunder determined in
accordance with Section 9.4, by notice in writing to the Company (and to the
Trustee if given by Debentureholders), may declare the principal of and premium,
if any, on all the Debentures and the interest accrued thereon (including
Liquidated Damages, if any) to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debentures contained to the contrary
notwithstanding. If an Event of Default specified in Section 7. 1(d) or (e) with
respect to the Company
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occurs, the principal of all the Debentures and the interest accrued thereon
(including Liquidated Damages, if any) shall be immediately and automatically
due and payable without necessity of further action. This provision, however, is
subject to the conditions that if, at any time after the principal of the
Debentures shall have been so declared due and payable, and before any judgment
or decree for the payment of the monies due shall have been obtained or entered
as hereinafter provided, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured installments of interest upon (including
Liquidated Damages, if any) all Debentures and the principal of and premium, if
any, on any and all Debentures which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest (including
Liquidated Damages, if any) (to the extent that payment of such interest is
enforceable under applicable law) and on such principal and premium, if any, at
the rate borne by the Debentures, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 8.6, and if any and all defaults
under this Indenture, other than the nonpayment of principal of and premium, if
any, and accrued interest on (including Liquidated Damages, if any) Debentures
which shall have become due by acceleration, shall have been cured or waived
pursuant to Section 7.7 -- then and in every such case the holders of a majority
in aggregate principal amount of the Debentures then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee, promptly
upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such waiver or rescission and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in every
such case the Company, the holders of Debentures, and the Trustee shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the Company, the holders of Debentures, and the
Trustee shall continue as though no such proceeding had been taken.
SECTION 7.2. PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Debentures as and when the same shall become due and payable, and such default
shall have continued for a period of thirty (30) days, or (b) in case default
shall be made in the payment of the principal of or premium, if any, on any of
the Debentures as and when the same shall have become due and payable, whether
at maturity of the Debentures or in connection with any redemption, by or under
this Indenture declaration or otherwise -- then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the
Debentures, the whole amount that then shall have become due and payable on all
such Debentures for principal and premium, if any, or interest (including
Liquidated Damages, if any), as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under
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applicable law) upon the overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Debentures; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and any expenses or liabilities incurred by the Trustee
hereunder other than through its negligence or bad faith. Until such demand by
the Trustee, the Company may pay the principal of and premium, if any, and
interest on (including Liquidated Damages, if any) the Debentures to the
registered holders, whether or not the Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Debentures and collect in the manner provided by law out of the
property of the Company or any other obligor on the Debentures wherever situated
the monies adjudged or decreed to be payable.
In the case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Debentures under Title 11 of the United States Code, or any other applicable
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or such other obligor, the property of the
Company or such other obligor, or in the case of any other judicial proceedings
relative to the Company or such other obligor upon the Debentures, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Debentures shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.2, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (including Liquidated
Damages, if any) owing and unpaid in respect of the Debentures, and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Debentureholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Debentures, its or their
creditors, or its or their property, and to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 8.6; and
any receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of,
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any and all distributions, dividends, monies, securities and other property
which the holders of the Debentures may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Debentures, may be enforced by the Trustee
without the possession of any of the Debentures, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Debentures.
In any proceedings brought by the Trustee (and in any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Debentures, and it shall not be necessary to make any holders
of the Debentures parties to any such proceedings.
SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 8.6;
SECOND: Subject to the provisions of Article IV, in case the
principal of the outstanding Debentures shall not have become due and be unpaid,
to the payment of interest on (including Liquidated Damages, if any) the
Debentures in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been collected by
the Trustee) upon the overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Debentures, such payments to be made
ratably to the persons entitled thereto;
THIRD: Subject to the provisions of Article IV, in case the
principal of the outstanding Debentures shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount then owing and
unpaid upon the Debentures for principal and premium, if any, and interest
(including Liquidated Damages, if any), with interest on the overdue principal
and premium, if any, and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Debentures; and in case such monies
shall be insufficient to pay in full the whole amounts so due and unpaid upon
the Debentures, then to the payment of such principal and premium, if any, and
interest (including Liquidated Damages, if any) without preference or priority
of principal and premium, if any, over interest (including Liquidated Damages,
if any), or of interest (including Liquidated Damages, if any) over principal
and premium, if any, or of any installment of interest over any other
installment of interest, or of any Debenture over any
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other Debenture, ratably to the aggregate of such principal and premium, if any,
and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article IV, to the
payment of the remainder, if any, to the Company or any other person lawfully
entitled thereto.
SECTION 7.4. PROCEEDINGS BY DEBENTUREHOLDER. No holder of any Debenture
shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
(60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or proceeding
and no direction inconsistent with such written request shall have been given to
the Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture with every other
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures (except as otherwise provided
herein). For the protection and enforcement of this Section 7.4, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to receive
payment of the principal of and premium, if any (including upon redemption
pursuant to Article III), and accrued interest on (including Liquidated Damages,
if any) such Debenture, on or after the respective due dates expressed in such
Debenture or in the event of redemption, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
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SECTION 7.5. PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this Article VII or
by law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY OF DEBENTUREHOLDERS. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.4 shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, however, that (a) such
direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction and (c) the Trustee may decline to take any
action that would benefit some Debentureholder to the detriment of other
Debentureholders. The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding determined in accordance with Section 9.4 may
on behalf of the holders of all of the Debentures waive any past default or
Event of Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of redemption price pursuant to Article III or (iv) a
default in respect of a covenant or provisions hereof which under Article XI
cannot be modified or amended without the consent of the holders of all
Debentures then outstanding. Upon any such waiver, the Company, the Trustee and
the holders of the Debentures shall be restored to their former positions and
rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.7, said default or Event of Default shall for all purposes of the
Debentures and this Indenture be deemed
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to have been cured and to be not continuing; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 7.8. NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Debentureholders, as the names and addresses of such
holders appear upon the Debenture register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; and provided that, except in the case of default in
the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Debentures, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Debentureholders.
SECTION 7.9. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
Suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 7.9 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Debentureholder, or group of Debentureholders,
holding in the aggregate more than ten percent in principal amount of the
Debentures at the time outstanding determined in accordance with Section 9.4, or
to any suit instituted by any Debentureholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Debenture on or after
the due date expressed in such Debenture or to any suit for the enforcement of
the right to convert any Debenture in accordance with the provisions of Article
XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
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(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding determined as provided in Section 9.4
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment
(as to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Debentures; and
(f) if any party fails to deliver a notice relating to an
event the fact of which, pursuant to this Indenture, requires notice to be sent
to the Trustee, the Trustee may conclusively rely on its failure to receive such
notice as reason to act as if no such event occurred.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if
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there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, note, debenture, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with due care
hereunder.
SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any
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Debentures authenticated and delivered by the Trustee in conformity with the
provisions of this Indenture.
SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN DEBENTURES. The Trustee, any paying agent, any conversion agent or Debenture
registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture registrar.
SECTION 8.5. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed from time to time by the Company and the Trustee.
SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to in writing between the Company and the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee) in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any loss, liability or expense incurred without negligence, willful misconduct,
recklessness, or bad faith on the part of the Trustee or such officers,
directors, employees and agent or authenticating agent, as the case may be, and
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the costs and expenses of
defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 8.6 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Debentures. The obligation
of the Company under this Section shall survive the satisfaction and discharge
of this Indenture.
When the Trustee and its agents and any authenticating agent
incur expenses or render services after an Event of Default specified in Section
7.1(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services
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are intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 8.9. ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and to the holders of Debentures. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment sixty (60) days after
the mailing of such notice of resignation to the Debentureholders, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
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(1) the Trustee shall fail to comply with Section 8.8 after
written request therefor by the Company or by any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for at least
six (6) months; or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.9 and shall fail to resign after
written request therefor by the Company or by any such Debentureholder;
or
(3) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Debentureholders has removed the Trustee, the Trustee so removed may petition
any court of competent jurisdiction for an appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.11.
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor
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hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor trustee,
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 8.6, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property and
funds held or collected by such trustee as such, except for funds held in trust
for the benefit of holders of particular Debentures, to secure any amounts then
due it pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in
this Section 8.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.11, the Company (or the former trustee, at the
written direction of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Debentures at their
addresses as they shall appear on the Debenture register. If the Company fails
to mail such notice within ten (10) days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 8.12. SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture, any of the Debentures shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee or
authenticating agent appointed by such predecessor trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee or an
authenticating agent appointed by such successor trustee may authenticate such
Debentures either in the name of any predecessor trustee hereunder or in the
name of the successor trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Debentures or in this Indenture
provided that the certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or authenticate Debentures in the name of any
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predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
SECTION 8.14. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the holders of the Debentures or holders of
Senior Indebtedness under this Indenture, including, without limitation, under
Article IV hereof) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
SECTION 9.1. ACTION BY DEBENTUREHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article X, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
SECTION 9.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such
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reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holding of Debentures shall
be proved by the registry of such Debentures or by a certificate of the
Debenture registrar.
The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.6.
SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee, any
paying agent, any conversion agent and any Debenture registrar may deem the
person in whose name such Debenture shall be registered upon the Debenture
register to be, and may treat it as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and interest on such
Debenture, for conversion of such Debenture and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Debenture registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Debenture.
SECTION 9.4. COMPANY-OWNED DEBENTURES DISREGARDED. In determining whether
the holders of the requisite aggregate principal amount of Debentures have
concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 9.4 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described persons; and, subject to Section 8.1, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.
SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the Debentures the holders
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of which have consented to such action may, by filing written notice with the
Trustee at its Corporate Trust Office and upon proof of holding as provided in
Section 9.2, revoke such action so far as concerns such Debenture. Except as
aforesaid, any such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debenture and of any Debentures issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Debenture or any Debenture issued in exchange or substitution therefor.
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
SECTION 10.1. PURPOSE OF MEETINGS. A meeting of Debentureholders may be
called at any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Debentureholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII; (3) to consent to the execution
of an indenture or indentures supplemental hereto pursuant to the
provisions of Section 11.2; or (4) to take any other action authorized to
be taken by or on behalf of the holders of any specified aggregate
principal amount of the Debentures under any other provision of this
Indenture or under applicable law.
SECTION 10.2. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call
a meeting of Debentureholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Debentureholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 9.1, shall
be mailed to holders of Debentures at their addresses as they shall appear on
the Debenture register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if
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the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.3. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 10.1, by mailing notice thereof as provided in Section
10.2.
SECTION 10.4. QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures. The only persons who shall be entitled to be present or to speak at
any meeting of Debentureholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
SECTION 10.5. REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Debentureholders as provided in Section 10.3, in which case
the Company or the Debentureholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.4, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.2 or 10.3 may be adjourned from time to time by the holders of a majority of
the aggregate principal amount of Debentures represented at
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the meeting, whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.
SECTION 10.6. VOTING. The vote upon any resolution submitted to any meeting
of Debentureholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Debentures or of their representatives by proxy and
the principal amount of the Debentures held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.2. The record shall show the principal amount of the
Debentures voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTURE-
HOLDERS. The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 15.6 and the
redemption obligations of the Company pursuant to the requirements of Section
3.5(e);
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debentures, any property or assets;
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(c) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Debentures, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not materially adversely affect the
interests of the holders of the Debentures;
(g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 11.2.
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Notwithstanding any other provision of the Indenture or the
Debentures, the Registration Rights Agreement and the obligation to pay
Liquidated Damages thereunder may be amended, modified or waived in accordance
with the provisions of the Registration Rights Agreement.
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in Article IX) of the holders of not
less than a majority in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption thereof, or impair the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debentures, or modify the provisions of this Indenture with
respect to the subordination of the Debentures in a manner adverse to the
Debentureholders in any material respect, or change the obligation of the
Company to redeem any Debenture upon the happening of a Fundamental Change in a
manner adverse to the holder of Debentures, or impair the right to convert the
Debentures into Common Stock subject to the terms set forth herein including
Section 15.6, in each case, without the consent of the holder of each Debenture
so affected, or (ii) reduce the aforesaid percentage of Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy
of the resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Debentureholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders under this Section 11.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; provided that this Section 11.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture
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Act or the Indenture has been qualified under the Trust Indenture Act, nor shall
it constitute any admission or acknowledgment by any party to such supplemental
indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article XI, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights;
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 11.4. NOTATION ON DEBENTURES. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 16.11) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.1. COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Debentures shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company), authorized to acquire and operate
the same and which shall be organized under the laws of the United States of
America, any state thereof or the District of Columbia; provided that upon any
such consolidation, merger, sale, conveyance or lease, the due and punctual
payment of the principal of and premium, if any, and interest (including
Liquidated
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Damages, if any) on all of the Debentures, according to their tenor, and the due
and punctual performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.6.
SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Omnicare, Inc. any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Debentures which previously
shall have been signed and delivered by the officers of the Company to the
Trustee for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof. In the
event of any such consolidation, merger, sale, conveyance or lease, the person
named as the "Company" in the first paragraph of this Indenture or any successor
which shall thereafter have become such in the manner prescribed in this Article
XII may be dissolved, wound up and liquidated at any time thereafter and such
person shall be released from its liabilities as obligor and maker of the
Debentures and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form (but not in substance) may be made
in the Debentures thereafter to be issued as may be appropriate.
SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article XII.
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ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1. DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Debentures theretofore authenticated (other
than any Debentures which have been destroyed, lost or stolen and in lieu of or
in substitution for which other Debentures shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or redemption date, as the case may be,
accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other financial professional
satisfactory to the Trustee, and if the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on written demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.5 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
and to compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Debentures.
SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article IV, shall be held in trust
for the sole benefit of the Debentureholders and not to be subject to the
subordination provisions of Article IV, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Debentures for the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest and premium, if any.
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SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.4. RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Debentures and not applied but
remaining unclaimed by the holders of Debentures for two years after the date
upon which the principal of, premium, if any, or interest on such Debentures, as
the case may be, shall have become due and payable, shall be repaid to the
Company by the Trustee on demand and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the
Debentures shall thereafter look only to the Company for any payment which such
holder may be entitled to collect unless an applicable abandoned property law
designates another Person.
SECTION 13.5. REINSTATEMENT. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.1 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
13.2; provided, however, that if the Company makes any payment of interest on or
principal of any Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Debentures to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.1. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debentures.
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ARTICLE XV
CONVERSION OF DEBENTURES
SECTION 15.1. RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, including without limitation Article IV, the
holder of any Debenture shall have the right, at its option, at any time after
ninety (90) days following the latest date of original issuance thereof through
the close of business on December 1, 2007 (except that, with respect to any
Debenture or portion of a Debenture which shall be called for redemption, such
right shall terminate, except as provided in Section 15.2 or Section 3.4, at the
close of business on the Business Day next preceding the date fixed for
redemption of such Debenture or portion of a Debenture unless the Company shall
default in payment due upon redemption thereof) to convert the principal amount
of any such Debenture, or any portion of such principal amount which is $1,000
or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Debenture or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Debenture so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 15.2. A Debenture in
respect of which a holder is exercising its option to require redemption upon a
Fundamental Change pursuant to Section 3.5 may be converted only if such holder
withdraws its election to exercise in accordance with Section 3.5. A holder of
Debentures is not entitled to any rights of a holder of Common Stock until such
holder has converted his Debentures to Common Stock, and only to the extent such
Debentures are deemed to have been converted to Common Stock under this Article
XV.
SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Debenture in certificated form, the
holder of any such Debenture to be converted in whole or in part shall surrender
such Debenture, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.2, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.2, and shall give written notice of
conversion in the form provided on the Debentures (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Debenture or the portion thereof specified in said notice. Such
notice shall also state the name or names (with address or addresses) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.7. Each such Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to
any interest in a Debenture in global form, the holder must complete the
appropriate instruction form for conversion pursuant to the Depository's
book-entry conversion program, deliver by book-
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entry delivery an interest in such Debenture in global form, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 15.2 and
any transfer taxes if required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Debentureholder (as if such transfer were a transfer
of the Debenture or Debentures (or portion thereof) so converted), the Company
shall issue and shall deliver to such holder at the office or agency maintained
by the Company for such purpose pursuant to Section 5.2, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Debenture or portion thereof in accordance with the
provisions of this Article and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion, as
provided in Section 15.3. In case any Debenture of a denomination greater than
$1,000 shall be surrendered for partial conversion, and subject to Section 2.3,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Debenture so surrendered, without charge to him, a new Debenture
or Debentures in authorized denominations in an aggregate principal amount equal
to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to
any such Debenture (or portion thereof) on the date on which the requirements
set forth above in this Section 15.2 have been satisfied as to such Debenture
(or portion thereof), and the person in whose name any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on said date the holder of record of the shares
represented thereby; provided, however, that any such surrender on any date when
the stock transfer books of the Company shall be closed shall constitute the
person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion
during the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day next preceding the
following interest payment date shall (unless such Debenture or portion thereof
being converted shall have been called for redemption on a redemption date which
occurs during the period from the close of business on such record date to the
close of business on the Business Day next preceding the following interest
payment date) be accompanied by payment, in New York Clearing House funds or
other funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such interest payment date on the principal amount being
converted; provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Debentures. Except as provided above in this Section 15.2, no payment or other
adjustment shall be made for
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interest accrued on any Debenture converted or for dividends on any shares
issued upon the conversion of such Debenture as provided in this Article.
Upon the conversion of an interest in a Debenture in global
form, the Trustee (or other conversion agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other conversion agent appointed
by the Company), shall make a notation on such Debenture in global form as to
the reduction in the principal amount represented thereby. The Company shall
notify the Trustee in writing of any conversions of Debentures effected through
any conversion agent other than the Trustee.
SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Debentures. If more than one Debenture shall be surrendered
for conversion at one time by the same holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Debentures (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Debentures. The current market price of a
share of Common Stock shall be the Closing Price on the last Business Day
immediately preceding the day on which the Debentures (or specified portions
thereof) are deemed to have been converted.
SECTION 15.4. CONVERSION PRICE. The conversion price shall be as
specified in the form of Debenture (herein called the "Conversion Price")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
XV.
SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
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(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
15.5(a) applies) or evidences
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of its indebtedness or assets (including securities, but excluding any rights or
warrants referred to in Section 15.5(b), and excluding any dividend or
distribution (x) paid exclusively in cash or (y) referred to in Section 15.5(a)
(any of the foregoing hereinafter in this Section 15.5(d) called the
"Securities")), then, in each such case (unless the Company elects to reserve
such Securities for distribution to the Debentureholders upon the conversion of
the Debentures so that any such holder converting Debentures will receive upon
such conversion, in addition to the shares of Common Stock to which such holder
is entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Debentures into Common Stock
immediately prior to the Record Date (as defined in Section 15.5(h) for such
distribution of the Securities)), the Conversion Price shall be reduced so that
the same shall be equal to the price determined by multiplying the Conversion
Price in effect on the Record Date with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on such Record Date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date of the
portion of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be the Current Market Price per share of the Common
Stock, such reduction to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that in the
event the fair market value (as so determined) of the portion of the Securities
so distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each
Debentureholder shall have the right to receive upon conversion the amount of
Securities such holder would have received had such holder converted each
Debenture on the Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 15.5(d) by reference to
the actual or when issued trading market for any securities, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price of the Common Stock.
Rights or warrants distributed by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"): (i) are deemed to be transferred with such
shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 15.5 (and no adjustment to the
Conversion Price under this Section 15.5 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 15.5(d). If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the
occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of
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any and each such event shall be deemed to be the date of distribution and
record date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 15.5 was made, (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
Notwithstanding the foregoing, in the event that the Company
shall distribute rights or warrants to subscribe for additional shares of the
Common Stock (other than rights or warrants described in Section 15.5(b)), pro
rata to holders of Common Stock, and in the case of the rights issued pursuant
to the Company's stockholder rights agreement in existence as of the date
hereof, the Company may, in lieu of making any adjustment pursuant to this
Section 15.5(d), make proper provision (in the case of the Company's stockholder
rights agreement in existence as of the date thereof, to the extent it does not
make proper provision) so that each holder of a Debenture who converts such
Debenture (or any portion thereof) after the record date for such distribution
shall be entitled to receive upon such conversion, in addition to the shares of
Common Stock issuable upon such conversion (the "Conversion Shares"), a number
of rights or warrants to be determined as follows: (i) if such conversion occurs
on or prior to the date for the distribution to the holders of such rights or
warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants to which a holder of
a number of shares of Common Stock equal to the number of Conversion Shares is
entitled at the time of such conversion in accordance with the terms and
provisions of and applicable to such rights or warrants; and (ii) if such
conversion occurs after the Distribution Date, the same number of rights or
warrants to which a holder of the number of shares of Common Stock into which
the principal amount of the Debenture so converted was convertible immediately
prior to the Distribution Date would have been entitled on the Distribution Date
in accordance with the terms and provisions of, and applicable to such rights or
warrants.
For purposes of this Section 15.5(d) and Sections 15.5(a) and
(b), any dividend or distribution to which this Section 15.5(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets or
shares of capital stock other than such shares of Common Stock or rights or
warrants (and any Conversion Price reduction required by
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this Section 15.5(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such shares of
Common Stock or such rights or warrants (and any further Conversion Price
reduction required by Sections 15.5(a) and (b) with respect to such dividend or
distribution shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution" and "the
date fixed for such determination" within the meaning of Sections 15.5(a) and
(b) and (B) any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash dividend
on the Common Stock to the extent the aggregate cash dividend per share of
Common Stock in any fiscal quarter does not exceed the greater of (A) the amount
per share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 15.5(e)
(as adjusted to reflect subdivisions or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.5(h)) during the ten Trading Days (as defined in Section
15.5(h)) immediately prior to the date of declaration of such dividend, and (y)
any dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such Record Date by a fraction of which the
numerator shall be the Current Market Price of the Common Stock on the record
date less the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator shall be such
Current Market Price of the Common Stock, such reduction to be effective
immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Debentureholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Debenture on
the Record Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If any adjustment is required to be made as set forth in this Section
15.5(e) as a result of a distribution that is a quarterly dividend, such
adjustment shall be based upon the amount by which such distribution exceeds the
amount of the quarterly cash dividend permitted to be excluded pursuant hereto.
If an adjustment is required to be made as set forth in this Section 15.5(e)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
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(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) that
exceeds the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the Expiration Time multiplied by the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange offer
had not been made.
(g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such person of consideration
per share of Common Stock having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Offer Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
and in which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Offer Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time and the denominator shall be the sum
of (x) the fair market value
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(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Offer Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Accepted Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Accepted
Purchased Shares) on the Offer Expiration Time and the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
such reduction to become effective immediately prior to the opening of business
on the day following the Offer Expiration Time. In the event that such person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.5(g) shall not be made if, as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article XII.
(h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in each case on the New York Stock Exchange,
or, if such security is not listed or admitted to trading on such Exchange,
on the principal national security exchange or quotation system on which
such security is quoted or listed or admitted to trading, or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors for that purpose, or a price determined in
good faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination
shall be conclusive.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading
Days immediately prior to the date in question; provided, however, that (1)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
15.5(a), (b), (c), (d), (e), (f) or (g) occurs during such ten consecutive
Trading Days, the Closing Price for each Trading Day prior to the "ex" date
for such other event shall be adjusted by multiplying such Closing Price by
the same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex"
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date for any event (other than the issuance, distribution or Fundamental
Change requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or
(g) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as
a result of such other event, and (3) if the "ex" date for the issuance,
distribution or Fundamental Change requiring such computation is prior to
the day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto
the amount of any cash and the fair market value (as determined by the
Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof in a manner consistent with any determination
of such value for purposes of Section 15.5(d), (f) or (g), whose
determination shall be conclusive and described in a resolution of the
Board of Directors or such duly authorized committee thereof, as the case
may be) of the evidences of indebtedness, shares of capital stock or assets
being distributed applicable to one share of Common Stock as of the close
of business on the day before such "ex" date. For purposes of any
computation under Section 15.5(f) or (g), the Current Market Price of the
Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for any
event (other than the tender or exchange offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the Expiration
Time or Offer Expiration Time, as the case may be, for the tender or
exchange offer requiring such computation and prior to the day in question,
the Closing Price for. each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance
or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after
the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such exchange or in
such market after the Offer Expiration Time of such offer.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
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(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or
another national security exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made on thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5 (a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a determination
that such reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Debentures a notice of the reduction at least fifteen (15) days prior to
the date the reduced Conversion Price takes effect, and such notice shall state
the reduced Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided, however, that any adjustments which by reason of this
Section 15.5(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XV shall be made by the Company and shall be made to the nearest cent or to the
nearest one-hundredth (1/100) of a share, as the case may be. No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. To the extent the Debentures become
convertible into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
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(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the holder of each Debenture at his last address appearing on the Debenture
register provided for in Section 2.5 of this Indenture, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the holder of any
Debenture converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any of the following events occur, namely (i) any reclassification or change of
the outstanding shares of Common Stock (other than a subdivision or combination
to which Section 15.5(c) applies), (ii) any consolidation, merger or combination
of the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Debenture shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such Debentures
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock available to convert all such Debentures) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
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assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("nonelecting share")),
then for the purposes of this Section 15.6 the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares. Such supplemental indenture shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Debentures, at its address
appearing on the Debenture register provided for in Section 2.5 of this
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such supplemental
indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.6 applies to any event or occurrence,
Section 15.5 shall not apply.
SECTION 15.7. TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Debentures shall be made without charge to the converting
Debentureholder for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Debenture converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Debentures from time to time as such Debentures are presented
for conversion.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Debentures, the Company will take
all corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Price.
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<PAGE> 84
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the Common
Stock shall be listed on the Nasdaq National Market or any other national
securities exchange or automated quotation system the Company will, if permitted
by the rules of such exchange or automated quotation system, list and keep
listed, so long as the Common Stock shall be so listed on such exchange or
automated quotation system, all Common Stock issuable upon conversion of the
Debentures; provided, however, that if rules of such exchange or automated
quotation system permit the Company to defer the listing of such Common Stock
until the first conversion of the Debentures into Common Stock in accordance
with the provisions of this Indenture, the Company covenants to list such Common
Stock issuable upon conversion of the Debentures in accordance with the
requirements of such exchange or automated quotation system at such time.
SECTION 15.9. RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Price or whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 15.6 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event referred to in such Section 15.6 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 8.1, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which
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<PAGE> 85
the Company shall be obligated to file with the Trustee prior to the execution
of any such supplemental indenture) with respect thereto.
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company or any Significant Subsidiary;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture register provided
for in Section 2.5 of this Indenture, as promptly as possible but in any event
at least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
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<PAGE> 86
SECTION 16.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.3. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures on the Company shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Omnicare, Inc., 50 East RiverCenter Blvd. -- Suite 1530, Covington,
Kentucky, 41011, Attention: Chief Financial Officer. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at One First National Plaza, Suite
0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust Securities
Division.
The Trustee, by notice to the Company, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall
be mailed to him by first class mail, postage prepaid, at his address as it
appears on the Debenture register and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder
or any defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 16.4. GOVERNING LAW. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York.
SECTION 16.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of
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<PAGE> 87
the examination or investigation upon which the statement or opinion contained
in such certificate or opinion is based: (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 16.6. LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Debentures or the date fixed for redemption of
any Debenture will not be a Business Day, then payment of such interest on or
principal of the Debentures need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period from and after such date.
SECTION 16.7. TRUST INDENTURE ACT. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that, unless otherwise required by law,
notwithstanding the foregoing, this Indenture and the Debentures issued
hereunder shall not be subject to the provisions of subsections (a)(1), (a)(2),
and (a)(3) of Section 314 of the Trust Indenture Act as now in effect or as
hereafter amended or modified; provided, further; that this Section 16.7 shall
not require this Indenture or the Trustee to be qualified under the Trust
Indenture Act prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in an indenture qualified under the Trust Indenture Act, such
required provision shall control.
SECTION 16.8. NO SECURITY INTEREST CREATED. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its subsidiaries is located.
SECTION 16.9. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debentures, expressed or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
registrar and their successors hereunder, the holders of Debentures and the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 16.10. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
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SECTION 16.11. AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to
all intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Debentures. For all purposes of this Indenture, the authentication and delivery
of Debentures by the authenticating agent shall be deemed to be authentication
and delivery of such Debentures "by the Trustee" and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent
shall be deemed to satisfy any requirement hereunder or in the Debentures for
the Trustee's certificate of authentication. Such authenticating agent shall at
all times be a person eligible to serve as trustee hereunder pursuant to Section
8.9.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
authenticating agent shall be a party, or any corporation succeeding to the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 16.11, without the execution or filing of any paper
or any further act on the part of the parties hereto or the authenticating agent
or such successor corporation.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any authenticating agent by giving written
notice of termination to such authenticating agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any authenticating agent shall cease to be eligible under this Section,
the Trustee shall either promptly appoint a successor authenticating agent or
itself assume the duties and obligations of the former authenticating agent
under this Indenture, and upon such appointment of a successor authenticating
agent, if made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture register.
The Trustee agrees to pay to the authenticating agent from
time to time reasonable compensation for its services (to the extent
pre-approved by the Company in writing), and the Trustee shall be entitled to be
reimbursed for such pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section
16.11 shall be applicable to any authenticating agent.
SECTION 16.12. EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
indenture to be duly executed.
OMNICARE, INC.
By: /s/ Cheryl D. Hodges
--------------------------------------
Name: Cheryl D. Hodges
Title: Senior Vice President and
Secretary
THE FIRST NATIONAL BANK OF
CHICAGO,
as Trustee
By: /s/ Victoria Y. Douyon
--------------------------------------
Name: Victoria Y. Douyon
Title: Vice President
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EXHIBIT A
[For Global Debenture only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO OMNICARE, INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E)
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PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO THE FIRST NATIONAL
BANK OF CHICAGO, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR
OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO
CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE DEBENTURES EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
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<PAGE> 92
OMNICARE, INC.
5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2007
No: _______ CUSIP: ________
OMNICARE, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "Company"),
which term includes any successor corporation under the Indenture referred to on
the reverse hereof, for value received hereby promises to pay to
___________________________________ or registered assigns, the principal sum of
________________ ($____________) on December 1, 2007, at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, or, at the option of the holder of this Debenture, at the Corporate
Trust Office, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on June 1 and December 1, of each
year, commencing June 1, 1998, on said principal sum at said office or agency,
in like coin or currency, at the rate per annum of 5% from December 10, 1997 and
thereafter to maturity from the June 1 or December 1, as the case may be, next
preceding the date of this Debenture to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Debenture, or unless
no interest has been paid or duly provided for on the Debentures, in which case
from December 10, 1997, until payment of said principal sum has been made or
duly provided for. Notwithstanding the foregoing, if the date hereof is after
any May 15 or November 15, as the case may be, and before the following June 1
or December 1, this Debenture shall bear interest from such June 1 or December
1; provided, however, that if the Company shall default in the payment of
interest due on such June 1 or December 1, then this Debenture shall bear
interest from the next preceding June 1 or December 1, to which interest has
been paid or duly provided for or, if no interest has been paid or duly provided
for on such Debenture, from December 10, 1997. The interest payable on the
Debenture pursuant to the Indenture on any June 1 or December 1 will be paid to
the person entitled thereto as it appears in the Debenture register at the close
of business on the record date, which shall be the May 15 or November 15
(whether or not a Business Day) next preceding such June 1 or December 1, as
provided in the Indenture; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Interest
may, at the option of the Company, be paid either (i) by check mailed to the
registered address of such person (provided that the holder of Debentures with
an aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder, be paid by wire transfer in immediately available
funds) or (ii) by transfer to an account maintained by such person located in
the United States.
Reference is made to the further provisions of this Debenture
set forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest on
the Debentures to the prior payment in
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<PAGE> 93
full of all Senior Indebtedness, as defined in the Indenture, and provisions
giving the holder of this Debenture the right to convert this Debenture into
Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Debenture shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be construed in
accordance with and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee or a duly authorized authenticating agent under the
Indenture.
IN WITNESS WHEREOF, the Company has caused this Debenture to
be duly executed under its corporate seal to be affixed or imported hereon.
OMNICARE, INC.
BY:
-------------------------------------
Name:
Title:
Attest:
---------------------------------
Name:
Title:
Dated: __________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:
-------------------------------
Authorized Signatory
By:
-------------------------------
As Authenticating Agent
(if different from Trustee)
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<PAGE> 94
[FORM OF REVERSE OF DEBENTURE]
OMNICARE, INC.
5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2007
This Debenture is one of a duly authorized issue of Debentures
of the Company, designated as its 5% Convertible Subordinated Debentures due
2007 (herein called the "Debentures"), limited to the aggregate principal amount
of $345,000,000 all issued or to be issued under and pursuant to an Indenture
dated as of December 10, 1997 (herein called the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (herein called the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of, premium, if any, and
accrued interest (including Liquidated Damages, if any) on all Debentures may be
declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture:
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time outstanding, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption thereof, or impair the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debenture, or modify the provisions of the Indenture with
respect to the subordination of the Debentures in a manner adverse to the
Debentureholders in any material respect, or change the obligation of the
Company to make redemption of any Debenture upon the happening of a Fundamental
Change in a manner adverse to the holder of the Debentures, or impair the right
to convert the Debentures into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Debenture so affected or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then outstanding. It is also provided in the Indenture that, prior to any
declaration accelerating the maturity of the Debentures, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default
A-5
<PAGE> 95
or Event of Default under the Indenture and its consequences except a default in
the payment of interest (including Liquidated Damages, if any) or any premium on
or the principal of any of the Debentures, a default in the payment of
redemption price pursuant to Article III or a failure by the Company to convert
any Debentures into Common Stock of the Company. Any such consent or waiver by
the holder of this Debenture (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Debenture and any Debentures which may be issued in exchange or
substitute hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent
and in the manner provided in the Indenture, expressly subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness of
the Company, as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Debenture, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest (including Liquidated Damages, if any) on this Debenture at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.
Interest on the Debentures shall be computed on the basis of a
year of twelve 30-day months.
The Debentures are issuable in registered form without coupons
in denominations of $1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Debentures, Debentures may be exchanged for a like aggregate
principal amount of Debentures of other authorized denominations.
The Debentures will not be redeemable at the option of the
Company prior to December 6, 2000. At any time on or after December 6, 2000, and
prior to maturity, the Debentures may be redeemed at the option of the Company
as a whole, or from time to time in part, upon mailing a notice of such
redemption not less than 30 days before the date fixed for redemption to the
holders of Debentures at their last registered addresses, all as provided in the
Indenture, at the following optional redemption prices (expressed as percentages
of the principal amount), together in each case with accrued interest (including
Liquidated Damages, if any) to, but excluding, the date fixed for redemption:
A-6
<PAGE> 96
If redeemed during the period beginning December 6, 2000 and
ending on November 30, 2001, at a redemption price of 103.500%, and if redeemed
during the 12-month period beginning December 1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
<S> <C>
2001 103.000%
2002 102.500%
2003 102.000%
2004 101.500%
2005 101.000%
2006 100.500%
</TABLE>
and 100% at December 1, 2007; provided that if the date fixed for redemption is
on June 1 or December 1, then the interest payable on such date shall be paid to
the holder of record on the next preceding May 15 or November 15, respectively.
The Debentures are not subject to redemption through the
operation of any sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs
at any time prior to December 1, 2007, the Debentures will be redeemable on the
30th day after notice thereof at the option of the holder. Such payment shall be
made at 105.000% from the date of initial issuance of the Debentures through
November 30, 1998; at 104.500% from December 1, 1998 through November 30, 1999;
at 104.000% from December 1, 1999 through December 5, 2000; at 103.500% from
December 6, 2000 through November 30, 2001; and at the following prices
(expressed as percentages of the principal amount) in the event of a Fundamental
Change occurring during the 12-month period beginning December 1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
<S> <C>
2001 103.000%
2002 102.500%
2003 102.000%
2004 101.500%
2005 101.000%
2006 100.500%
</TABLE>
and 100% at December 1, 2007; provided in each case that if the Applicable Price
(as defined in the Indenture) is less than the Reference Market Price (as
defined in the Indenture), the Company shall redeem such Debentures at a price
equal to the foregoing repayment price multiplied by the fraction obtained by
dividing the Applicable Price by the Reference Market Price. In each case, the
Company shall also pay accrued interest, if any (including Liquidated Damages,
if any) on such Debentures to, but excluding, the Repurchase Date; provided that
if such Repurchase Date is June 1 or December 1, then
A-7
<PAGE> 97
the interest payable on such date shall be paid to the holder of record of the
Debenture on the next preceding May 15 or November 15. The Company shall mail
to all holders of record of the Debentures a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on
or before the 10th day after the occurrence of such Fundamental Change. For a
Debenture to be so repaid at the option of the holder, the Company must receive
at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, such Debenture with the form
entitled "Option to Elect Repayment Upon a Fundamental Change" on the reverse
thereof duly completed, together with such Debentures duly endorsed for
transfer, on or before the 30th day after the date of such notice (or if such
30th day is not a Business Day, the immediately preceding Business Day).
Subject to the provisions of the Indenture, the holder hereof
has the right, at its option, at any time after 90 days following the latest
date of original issuance thereof through the close of business on December 1,
2007, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Business Day immediately preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 or an integral multiple thereof into that number of shares of the
Company's Common Stock, as said shares shall be constituted at the date of
conversion, obtained by dividing the principal amount of this Debenture or
portion thereof to be converted by the Conversion Price of $39.60 or such
Conversion Price as adjusted from time to time as provided in the Indenture,
upon surrender of this Debenture, together with a conversion notice as provided
in the Indenture, to the Company at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or at
the option of such holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Debenture, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustment in respect of interest or dividends will be made upon any conversion;
provided, however, that if this Debenture shall be surrendered for conversion
during the period from the close of business on any record date for the payment
of interest to the close of business on the Business Day preceding the interest
payment date, this Debenture (unless it or the portion being converted shall
have been called for redemption during the period from the close of business on
any record date for the payment of interest to the close of business on the
Business Day preceding the interest payment date) must be accompanied by an
amount, in New York Clearing House funds or other funds acceptable to the
Company, equal to the interest payable on such interest payment date on the
principal amount being converted. No fractional shares will be issued upon any
conversion, but an adjustment in cash will be made, as provided in the
Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Debenture or Debentures for conversion.
Any Debentures called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for redemption,
may be deemed to be purchased from the holder of such Debentures at an amount
equal to the applicable redemption price, together with accrued interest
(including Liquidated Damages, if any)
A-8
<PAGE> 98
to (but excluding) the date fixed for redemption, by one or more investment
bankers or other purchasers who may agree with the Company to purchase such
Debentures from the holders thereof and convert them into Common Stock of the
Company and to make payment for such Debentures as aforesaid to the Trustee in
trust for such holders.
Upon due presentment for registration of transfer of this
Debenture at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, or at the option of the holder of
this Debenture, at the Corporate Trust Office, a new Debenture or Debentures of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange thereof; subject to the limitations provided in
the Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying
agent, any conversion agent and any Debenture registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
registrar), for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Debenture registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or any premium
or interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof; and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
Terms used in this Debenture and defined in the Indenture are
used herein as therein defined.
A-9
<PAGE> 99
ABBREVIATIONS
The following abbreviations, when used in the inscription of
the face of this Debenture, shall be construed as though they were written out
in full according to applicable laws or regulations:
- --------------------------------------------------------------------------------
TEN COM- as tenants in common UNIF GIFT MIN ACT--_____________ Custodian
(Cust)
------------
(Minor)
- --------------------------------------------------------------------------------
TEN ENT - as tenant by the
entireties
- --------------------------------------------------------------------------------
JT TEN- as joint tenants with under Uniform Gifts to Minors Act
right of survivorship
and not as tenants in -------------------------------------
common (State)
- --------------------------------------------------------------------------------
Additional abbreviations may also be used
though not in the above list.
A-10
<PAGE> 100
CONVERSION NOTICE
To: OMNICARE, INC.
The undersigned registered owner of this Debenture hereby
irrevocably exercises the option to convert this Debenture, or the portion
hereof (which is $1,000 or an integral multiple thereof) below designated, into
shares of Common Stock of Omnicare, Inc. in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon such conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Debenture not converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below and pay all
transfer taxes payable with respect thereto. Any amount required to be paid to
the undersigned on account of interest accompanies this Debenture.
Dated: _____________
-------------------------------------
-------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange
if shares of Common Stock are to be
issued, or Debentures to be
delivered, other than to and in the
name of the registered holder.
-------------------------------------
Signature Guarantee
A-11
<PAGE> 101
Fill in for registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
- -----------------------------------
(Name)
- -----------------------------------
(Street Address)
- -----------------------------------
(City, State and Zip Code)
- -----------------------------------
Please print name and address
Principal amount to be converted
(if less than all): $____________
Social Security or Other Taxpayer
Identification Number ______________
A-12
<PAGE> 102
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
TO: OMNICARE, INC.
The undersigned registered owner of this Debenture hereby
irrevocably acknowledges receipt of a notice from Omnicare, Inc. (the "Company")
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repay the entire principal amount of this
Debenture, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Debenture at the redemption price, together with accrued
interest to, but excluding, such date, to the registered holder hereof.
Dated: ____________________
-------------------------------------
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with
the name as written upon the face of
the Debenture in every particular
without alteration or enlargement or
any change whatever.
Principal amount to be converted (if
less than all):
$__________________
-------------------------------------
Social Security or Other Taxpayer
Identification Number
A-13
<PAGE> 103
ASSIGNMENT
For value received ___________________________ hereby sell(s),
assign(s) and transfer(s) unto ___________________________ (Please insert social
security or other Taxpayer Identification Number of assignee) the within
Debenture, and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer the said Debenture on the books
of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture within the
period prior to the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision) (other
than any transfer pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such
Debenture is being transferred:
To Omnicare, Inc. or a subsidiary thereof, or
Pursuant to and in compliance with Rule 144A under the Securities Act of
1933, as amended; or
To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
Pursuant to and in compliance with Regulation S under the Securities Act
of 1933, as amended; or
Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended;
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate").
A-14
<PAGE> 104
The transferee is an Affiliate of the Company.
Dated: ________________________ _____________________________________
-------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange
if shares of Common Stock are to be
issued, or Debentures to be
delivered, other than to or in the
name of the registered holder.
-------------------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Debenture in every particular without alteration or
enlargement or any change whatever.
A-15
<PAGE> 105
EXHIBIT B
Omnicare, Inc.
50 East RiverCenter Blvd. - Suite 1530
Covington, Kentucky 41011
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Securities Division
Ladies/Gentlemen:
We are delivering this letter in connection with an offering
of 5% Convertible Subordinated Debentures due 2007 (the "Debentures), which are
convertible into shares of Common Stock, $1.00 par value (the "Common Stock"),
of Omnicare, Inc. (the "Company").
We hereby confirm that:
- - we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3)
under the Securities Act (an "Institutional Accredited Investor");
- - (A) any purchase of Debentures by us will be for our own account or for
the account of one or more other Institutional Accredited Investors or
as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment
discretion or (B) we are a "bank," within the meaning of Section
3(a)(2) of the Securities Act, or a "savings and loan association" or
other institution described in Section 3(a)(5)(A) of the Securities Act
that is acquiring Debentures as fiduciary for the account of one or
more institutions for which we exercise sole investment discretion;
- - in the event that we purchase any Debentures, we will acquire
Debentures having a minimum principal amount of not less than $100,000
for our own account or for any separate account for which we are
acting;
- - we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of purchasing
the Debentures;
- - we are not acquiring Debentures with a view to distribution thereof or
with any present intention of offering or selling Debentures or the
Common Stock issuable upon conversion thereof, except as permitted
below; provided that the disposition of
B-1
<PAGE> 106
our property and property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
- - we have received a copy of the Offering Memorandum and acknowledge that
we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions or representatives
of the Company and receive answers thereto, as we deem necessary in
connection with our decision to purchase Debentures.
We understand that the Debentures are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Debentures and the shares of
Common Stock issuable upon conversion thereof have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Debentures, that if in the future we decide to resell
or otherwise transfer such Debentures or the Common Stock issuable upon
conversion thereof, such Debentures or Common Stock may be resold or otherwise
transferred only (i) to the Company or any subsidiary thereof, or (ii) inside
the United States to a person who is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, or (iii) inside the United States to an Institutional
Accredited Investor that, prior to such transfer, furnishes to the Trustee or
transfer agent for such securities a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from such Trustee or
transfer agent), or (iv) outside the United States in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
applicable), or (vi) pursuant to a registration statement which has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), and in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction and in accordance with the legends set forth on the
Debentures or the Common Stock issuable upon conversion thereof, as the case may
be. We further agree to provide any person purchasing any of the Debentures or
the Common Stock issuable upon conversion thereof other than pursuant to clause
(vi) above from us a notice advising such purchaser that resales of such
securities are restricted as stated herein. We understand that the Trustee or
transfer agent for the Debentures and the Common Stock will not be required to
accept for registration of transfer any Debentures or any shares of Common Stock
issued upon conversion of the Debentures except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Debentures and any
certificates representing Common Stock will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph other than certificates representing Common
Stock transferred pursuant to clause (vi) above.
We acknowledge that the Company, others and you will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
B-2
<PAGE> 107
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
-----------------------------------------
(Name of Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address:
---------------------------------
-----------------------------------------
-----------------------------------------
B-3
<PAGE> 108
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
B-4
<PAGE> 1
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as
of December 10, 1997 by and among OMNICARE, INC., a Delaware corporation (the
"Company") and MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE FIRST BOSTON
CORPORATION, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, NATIONSBANC
MONTGOMERY SECURITIES, INC., SMITH BARNEY INC. and WILLIAM BLAIR & COMPANY,
L.L.C. (the "Initial Purchasers") pursuant to the Purchase Agreement, dated as
of December 4, 1997 (the "Purchase Agreement"), between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for their
benefit as Initial Purchasers and (ii) for the benefit of the holders from time
to time of the Debentures (including the Initial Purchasers) and the holders
from time to time of the Common Stock issued upon conversion of the Debentures
(each of the foregoing a "Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms have the following meanings:
AFFILIATE: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, such specified person or
(ii) any officer or director of such other person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlling
by" and "under common control with") of a person means the possession, direct or
indirect, of the power (whether or not exercised) to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
COMMON STOCK: The shares of common stock, $1.00 par value per
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, in each case, and issuable or
issued upon conversion of the Debentures.
DAMAGES ACCRUAL PERIOD: See Section 2(f) hereof.
<PAGE> 2
DAMAGES PAYMENT DATE: Each of the semi-annual interest payment
dates provided in the Indenture.
DEBENTURES: 5% Convertible Subordinated Debentures due 2007 of
the Company being issued and sold pursuant to the Purchase Agreement and the
Indenture.
DEFERRAL PERIOD: See Section 2(e) hereof.
EFFECTIVENESS PERIOD: The period commencing with the date
hereof and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
EVENT: See Section 2(f) hereof.
EVENT DATE: See Section 2(f) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
FILING DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDENTURE: The Indenture, dated as of December 10, 1997,
between the Company and The First National Bank of Chicago, as Trustee, pursuant
to which the Debentures are being issued, as amended or supplemented from time
to time in accordance with the terms thereof.
INITIAL PURCHASERS: Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, NationsBanc Montgomery Securities, Inc., Smith Barney Inc. and
William Blair & Company, L.L.C.
INITIAL SHELF REGISTRATION: See Section 2(a) hereof.
LIQUIDATED DAMAGES: See Section 2(f) hereof.
LOSSES: See Section 6 hereof.
MANAGING UNDERWRITERS: The investment banking firm or firms
that shall manage or co-manage an Underwritten Offering.
NOTICE AND QUESTIONNAIRE: A written notice delivered to the
Company containing substantially the information called for by the Notice and
Questionnaire attached as Appendix B to the Offering Memorandum of the Company
dated December 4, 1997 relating to the Debentures.
NOTICE HOLDER: See Section 2(d) hereof.
2
<PAGE> 3
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by an amendment or prospectus
supplement, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the first paragraph of this Agreement.
RECORD HOLDER: (i) With respect to any Damages Payment Date
relating to any Debenture as to which any such Liquidated Damages have accrued,
the registered holder of such Debenture on the record date with respect to the
interest payment date under the Indenture on which such Damages Payment Date
shall occur and (ii) with respect to any Damages Payment Date relating to any
Common Stock as to which any such Liquidated Damages have accrued, the
registered holder of such Common Stock 15 days prior to the next succeeding
Damages Payment Date.
REGISTRABLE SECURITIES: (A) The Common Stock of the Company
into which the Debentures are convertible or converted, whether or not such
Debentures have been converted, and any Common Stock issued with respect thereto
upon any stock dividend, split or similar event until, in the case of any such
Common Stock, (i) it is effectively registered under the Securities Act and
resold in accordance with the Registration Statement covering it, (ii) it is
saleable by the holder thereof pursuant to Rule 144(k) or (iii) it is sold to
the public pursuant to Rule 144, and, as a result of the event or circumstance
described in any of the foregoing clauses (i) through (iii), the legends with
respect to transfer restrictions required under the Indenture (other than any
such legends required solely as the consequence of the fact that such Common
Stock (or the Debentures, upon the conversion of which, such Common Stock was
issued or is issuable) is owned by, or was previously owned by, the Company or
an Affiliate of the Company) are removed or removable in accordance with the
terms of the Indenture; (B) the Debentures, until, in the case of such
Debenture, (i) it is converted into shares of Common Stock in accordance with
the terms of the Indenture, (ii) it is effectively registered under the
Securities Act and resold in accordance with the Registration Statement covering
it, (iii) it is saleable by the holder thereof pursuant to Rule 144(k) or (iv)
it is sold to the public pursuant to Rule 144, and, as a result of the event or
circumstance described in any of the foregoing clauses (ii) through (iv), the
legends with respect to transfer restrictions required under the Indenture
(other than any such legends required solely as the consequence of that fact
that such Debenture is owned by, or was previously owned by, the Company or an
Affiliate of the Company) are removed or removable in accordance with the terms
of the Indenture.
REGISTRATION STATEMENT: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material
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incorporated by reference or deemed to be incorporated by reference in such
registration statement.
RULE 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION: See Section 2(a) hereof.
SPECIAL COUNSEL: Dewey Ballantine LLP, or such successor
counsel as shall be specified by the Holders of a majority of the Registrable
Securities, the fees and expenses of which will be paid by the Company pursuant
to Section 5 hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The Trustee under the Indenture.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. SHELF REGISTRATION.
(a) SHELF REGISTRATION. The Company shall prepare and file
with the SEC, as soon as practicable but in any event on or prior to the date
ninety (90) days following the latest date of original issuance of the
Debentures (the "Filing Date"), a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by the Holders
in the manner or manners designated by them (including, without limitation, one
or more Underwritten Offerings). The Company shall use reasonable best efforts
to cause the Initial Shelf Registration to be declared effective under the
Securities Act as promptly as practicable and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the earlier
of the expiration of the Effectiveness Period or the date a Subsequent Shelf
Registration, as defined below, covering all of the Registrable Securities has
been declared effective under the Securities Act.
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(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use reasonable best efforts to obtain
the prompt withdrawal of any order suspending the effectiveness thereof, and in
any event shall within thirty (30) days of such cessation of effectiveness amend
the Shelf Registration in manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use reasonable best efforts to cause the Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of a majority of the Holders of the
Registrable Securities covered by such Registration Statement or by any Managing
Underwriter of such Registrable Securities in the event of an Underwritten
Offering of the Registrable Securities.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). Each Holder of Registrable Securities agrees to deliver a Notice
and Questionnaire to the Company at least three Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration. As
soon as practicable after the date the Notice and Questionnaire is provided, and
in any event within two Business Days after such date, the Company shall (i) if
necessary, prepare and file with the SEC a post-effective amendment to the Shelf
Registration or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide each Holder who has delivered
a Notice and Questionnaire (each, a "Notice Holder") copies of any documents
filed pursuant to Section 2(d)(i); and (iii) inform each Notice Holder that the
Company has complied with its obligation in Section 2(d)(i) (or that, if the
Company has filed a post-effective amendment to the Shelf Registration which has
not yet been declared effective, the Company will notify the Notice Holder to
that effect, will use reasonable best efforts to secure the effectiveness of
such post-effective amendment and will immediately notify the Notice Holder when
the amendment has become effective).
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<PAGE> 6
(e) In the event (i) of the happening of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof
or (ii) that, in the judgment of the Company, it is advisable to suspend use of
the Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which the Company believes public disclosure will be
prejudicial to the Company, the Company shall deliver a certificate in writing,
signed by an authorized executive officer of the Company, to the Notice Holders,
the Special Counsel and the Managing Underwriters, if any, to the effect of the
foregoing and, upon receipt of such certificate, each such Notice Holder shall
not sell any Registrable Securities and shall not use the Prospectus until such
Notice Holder's receipt of copies of the supplemented or amended Prospectus
provided for in Section 2(d)(i) hereof, or until it is advised in writing by the
Company that the Prospectus may be used and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus. The Company will use reasonable best efforts to
ensure that the use of the Prospectus may be resumed, and sales of Registrable
Securities can commence, as soon as practicable and, in the case of a pending
development or event referred to in Section 2(e)(ii) hereof, as soon as the
earlier of (x) public disclosure of such pending material corporate development
or similar material event or (y) in the judgment of the Company, public
disclosure of such material corporate development or similar material event
would not be prejudicial to the Company. Notwithstanding any other provision in
this Agreement, the Company shall not under any circumstances be entitled to
exercise its rights under this Section 2(e) to defer sales of Registrable
Securities except as follows: the Company may defer sales of Registrable
Securities in accordance with this Section 2(e) for a period not to exceed
thirty (30) days in any three-month period, or not to exceed an aggregate of
sixty (60) days in any 12-month period, and the period in which sales of
Registrable Securities are suspended shall not exceed fifteen (15) days unless
the Company shall deliver to such Notice Holders a second notice to the effect
set forth above, which shall have the effect of extending the period during
which sales of Registrable Securities are deferred by up to an additional
fifteen (15) days, or such shorter period of time as is specified in such second
notice.
(f) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
had not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
periods permitted pursuant to Section 2(e) hereof or (iv) the number of Deferral
Periods exceeds the number permitted pursuant to Section 2(e) hereof (each of
the events of a type described in any of the foregoing clauses (i) through (iv)
are individually referred to herein as an "Event," and the Filing Date in the
case of clause (i), the date on which the effectiveness of the Shelf
Registration has been suspended or proceedings with respect to the Shelf
Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the periods permitted by Section 2(e) hereof in the case
of clause (iii), and the date of the commencement of a Deferral Period that
causes the limit on the number of
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<PAGE> 7
Deferral Periods under Section 2(e) hereof to be exceeded in the case of clause
(iv), being referred to herein as an "Event Date"). Events shall be deemed to
continue until the date of the termination of such Event, which shall be the
following dates with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date that all stop orders suspending effectiveness
of the Shelf Registration have been removed and the proceedings initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have terminated, as the case may be, in the case of Events of the types
described in clause (ii), termination of the Deferral Period which caused the
aggregate number of days in any one Deferral Period to exceed the number
permitted by Section 2(e) to be exceeded in the case of Events of the type
described in clause (iii), and termination of the Deferral Period the
commencement of which caused the number of Deferral Periods permitted by Section
2(e) to be exceeded in the case of Events of the type described in clause (iv).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events which have occurred and are continuing (a "Damages
Accrual Period"), commencing on the Event Date on which such Damages Accrual
Period began, the Company agrees to pay, as liquidated damages, and not as a
penalty, an additional amount (the "Liquidated Damages"): (A)(i) to each holder
of a Debenture that is a Notice Holder, accruing at a rate equal to one-half of
one percent per annum (50 basis points) on the aggregate principal amount of
Debentures held by such Notice Holder and (ii) to each holder of Common Stock
that is a Notice Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
then-applicable Conversion Price (as defined in the Indenture) multiplied by (y)
the number of shares of Common Stock held by such holder; and (B) if the Damages
Accrual Period continues for a period in excess of thirty (30) days from the
Event Date, from and after the end of such thirty (30) days until such time as
there are no Events which have occurred and are continuing, (i) to each holder
of a Debenture (whether or not a Notice Holder), accruing at a rate equal to
one-half of one percent per annum (50 basis points) on the aggregate principal
amount of Debentures held by such holder and (ii) to each holder of Common Stock
into which Debentures have been converted (whether or not a Notice Holder),
accruing at a rate equal to one-half of one percent per annum (50 basis points)
calculated on an amount equal to the product of (x) the then applicable
Conversion Price (as defined in the Indenture) multiplied by (y) the number of
shares of Common Stock held by such holder. Notwithstanding the foregoing, no
Liquidated Damages shall accrue under clause (A) for the preceding sentence
during any period for which Liquidated Damages accrue under clause (B) of the
preceding sentence or as to any Registrable Securities from and after the
expiration of the Effectiveness Period. The rate of accrual of the Liquidated
Damages with respect to any period shall not exceed the rate provided for in
this paragraph notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any
Debentures or Common Stock by depositing with the Trustee under the Indenture,
in trust, for the benefit of the holders of Debentures or Common Stock or Notice
Holders, as the case may be, entitled thereto, at least one (1) Business Day
prior to the applicable Damages Payment Date, sums sufficient to pay the
Liquidated Damages accrued or accruing since
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<PAGE> 8
the last preceding Damages Payment Date through such Damages Payment Date. The
Liquidated Damages shall be paid by the Trustee on behalf of the Company to the
Record Holders on each Damages Payment Date by wire transfer of immediately
available funds to the accounts specified by them or by mailing checks to their
registered addresses as they appear in the Debenture register (as defined in the
Indenture), in the case of the Debentures, and in the register of the Company
for the Common Stock, in the case of the Common Stock, if no such accounts have
been specified on or before the Damages Payment Date; provided, however, that
any Liquidated Damages accrued with respect to any Debenture or portion thereof
called for redemption on a redemption date, redeemed or repurchased in
connection with a Fundamental Change (as defined in the Indenture) on a
repurchase date, or converted into Common Stock on a conversion date prior to
the Damages Payment Date, shall, in any such event, be paid instead to the
holder who submitted such Debenture or portion thereof for redemption,
repurchase or conversion on the applicable redemption date, repurchase date or
conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion of a Debenture). The Trustee shall be
entitled, on behalf of the holders of Debentures, holders of Common Stock and
Notice Holders, to seek any available remedy for the enforcement of this
Agreement, including for the payment of such Liquidated Damages. Notwithstanding
the foregoing, the parties agree that the sole damages payable for a violation
of the terms of this Agreement with respect to which Liquidated Damages are
expressly provided shall be such Liquidated Damages. Nothing shall preclude a
Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement,
in addition to the payment of Liquidated Damages.
All of the Company's obligations set forth in this Section
2(f) which are outstanding with respect to any Registrable Securities at the
time such security ceases to be a Registrable Security shall survive until such
time as all such obligations with respect to such security have been satisfied
in full (notwithstanding termination of the Agreement pursuant to Section 8(o)).
The parties hereto agree that the Liquidated Damages provided
for in this Section 2(f) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities, as the case may be, in accordance
with the provisions hereof.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
reasonable best efforts to
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cause each such Registration Statement to become effective and remain effective
as provided herein; provided that, before filing any such Registration Statement
or Prospectus or any amendments or supplements thereto (other than documents
that would be incorporated or deemed to be incorporated therein by reference and
that the Company is required by applicable securities laws or stock exchange
requirements to file), the Company shall furnish to the Initial Purchasers, the
Special Counsel and the Managing Underwriters of such offering, if any, copies
of all such documents proposed to be filed, which documents will be subject to
the review of the Initial Purchasers, the Special Counsel and such Managing
Underwriters, and the Company shall not file any such Registration Statement or
amendment thereto or any Prospectus or any supplement thereto (other than such
documents which, upon filing, would be incorporated or deemed to be incorporated
by reference therein and that the Company is required by applicable securities
laws or stock exchange requirements to file) to which the Holders of a majority
of the Registrable Securities covered by such Registration Statement, the
Initial Purchasers or the Special Counsel shall reasonably object in writing
within two (2) full Business Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement and Prospectus during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchasers, the
Special Counsel and the Managing Underwriters, if any, promptly, and (if
requested by any such person) confirm such notice in writing, (i) when a
Prospectus, any Prospectus supplement, a Registration Statement or a
post-effective amendment to a Registration Statement has been filed with the
SEC, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the existence of any fact
or happening of any event which makes any statement of a material
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fact in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue or which
would require the making of any changes in the Registration Statement or
Prospectus in order that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading and (vi) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate. Notice of the filing and effectiveness of the
Initial Registration Statement and any Subsequent Registration Statement shall
be made by the Company by release made to Reuters Economic Services and
Bloomberg Business News.
(d) Use reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) If reasonably requested by the Initial Purchasers or the
Managing Underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel, the Managing Underwriters, if any, or
such Holders, in connection with any offering of Registrable Securities, agree
should be included therein as required by applicable law and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as reasonably practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided that the Company shall not be required to take any actions
under this Section 3(e) that are not, in the reasonable opinion of counsel for
the Company, in compliance with applicable law.
(f) Furnish to each Notice Holder, the Special Counsel, the
Initial Purchasers and each Managing Underwriter, if any, without charge, at
least one conformed copy of the Registration Statement or Statements and any
amendment thereto, including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits (unless requested in writing by such Notice Holder, counsel, the
Initial Purchasers or underwriter).
(g) Deliver to each Notice Holder, the Special Counsel, the
Initial Purchasers and each Managing Underwriter, if any, in connection with any
offering of Registrable Securities, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the Notice
Holders of Registrable Securities and the underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the Notice Holders, the Managing
Underwriters, if any, and the
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Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder or Managing
Underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such Notice Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the Notice Holder or Holders thereof or the Managing
Underwriters, if any, to consummate the disposition of such Registrable
Securities.
(j) Other than during a Deferral Period, immediately upon the
existence of any fact or the occurrence of any event as a result of which a
Registration Statement shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or a Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, promptly
prepare and file (subject to the proviso in Section 3(a)) a post-effective
amendment to each Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any other
required document (such as a Current Report on Form 8-K) that would be
incorporated by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-effective amendment to a Registration
Statement, use its reasonable best efforts to cause it to become effective as
soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an Underwritten Offering, those
reasonably requested by the Managing Underwriters, if any, or the Holders of a
majority of the
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Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into, and if the registration is an
underwritten registration, (i) make such representations and warranties, subject
to the Company's ability to do so, to the Holders of such Registrable Securities
and the underwriters with respect to the business of the Company and its
subsidiaries, the Registration Statement, Prospectus and documents incorporated
by reference or deemed incorporated by reference, if any, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings (provided that the scope and substance shall not be
materially different than those contained in the Purchase Agreement) and confirm
the same if and when requested; (ii) use its best efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the Managing
Underwriters, if any, Special Counsel and the Holders of a majority of the
Registrable Securities being sold) addressed to each of the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Special
Counsel and Managing Underwriters; (iii) use its best efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any business acquired or to be acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the Managing Underwriters, if
any, such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings; and (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable Securities being sold,
the Special Counsel and the Managing Underwriters, if any, to evidence the
continued validity of the representations and warranties of the Company and its
subsidiaries made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The above shall be done at each closing
under such underwriting or similar agreement as and to the extent required
thereunder.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of Registrable Securities being
sold, any Managing Underwriter participating in any disposition of Registrable
Securities, if any, and any attorney or accountant retained by such Notice
Holders or underwriter, financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
executive officers, directors and employees of the Company and its subsidiaries,
to supply all information reasonably requested by any such representative,
Managing Underwriter, attorney or accountant in connection with such
disposition; subject to reasonable assurances by each such person that such
information will only be used in connection with matters relating to such
Registration Statement; provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights
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under this Agreement, unless (i) disclosure of such information is required by
court or administrative order or is necessary to respond to inquiries of
regulatory authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities laws in
connection with the filing of any Registration Statement or the use of any
prospectus referred to in this Agreement), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement.
(m) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earning statements
(which need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than forty-five (45) days after the end of any
twelve (12) month period (or ninety (90) days after the end of any twelve (12)
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company commencing after the effective date of a
Registration Statement, which statements shall cover said twelve (12) month
period.
(n) Cooperate with the Notice Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as such Holders may request.
(o) Provide the Trustee under the Indenture and the transfer
agent for the Common Stock with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depositary Trust
Company.
(p) Cause the Common Stock covered by the Registration
Statement to be listed on each securities exchange or quoted on each automated
quotation system on which any of the Company's "Common Stock," as that term is
defined in the Indenture, is then listed or quoted) no later than the date the
Registration Statement is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
(q) Cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.
4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of the
Debentures and Registrable Securities, that no Holder of Registrable Securities
shall be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company
13
<PAGE> 14
with the Notice and Questionnaire required pursuant to Section 2(d) hereof and
such other information regarding such Holder and the distribution of such
Registrable Securities as may be required to be included in the Registration
Statement or the Prospectus or as the Company may from time to time reasonably
request. The Company may exclude from such registration the Registrable
Securities of any Holder who does not furnish such information provided above
for so long as such information is not so furnished. Each Holder of Registrable
Securities as to which any Registration Statement is being effected agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not misleading. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to such Holder or its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact relating to such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in light of the circumstances under
which they were made, not misleading.
5. REGISTRATION EXPENSES. All fees and expenses incident to the
Company's performance of or compliance with this Agreement shall be borne by the
Company whether or not any of the Registration Statements become effective. Such
fees and expenses shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (x) with respect
to filings required to be made with the SEC or the National Association of
Securities Dealers, Inc. and (y) relating to compliance with federal securities
or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities under the laws of such jurisdictions as the Managing
Underwriters, if any, or Holders of a majority of the Registrable Securities
being sold may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the Special Counsel
or the Holders of a majority of the Registrable Securities included in any
Registration Statement), (iii) the reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock, (iv) messenger, telephone and delivery expenses relating to the
performance of the Company's obligations hereunder, (v) reasonable fees and
disbursements of counsel for the Company and the Special Counsel in connection
with the Shelf Registration (provided that the Company shall not be liable for
the fees and expenses of more than one separate firm, in addition to counsel for
the Company, for all parties participating in any transaction hereunder), (vi)
fees and disbursements of all independent certified public accountants referred
to in Section 3(k)(iii) hereof (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance) and (vii)
Securities Act liability insurance, to the extent obtained by the Company in its
sole discretion. In addition, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the
14
<PAGE> 15
fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay all underwriting discounts, selling commissions and stock transfer taxes
applicable to the Registrable Securities, all selling expenses and all
registration expenses to the extent that the Company is prohibited by applicable
Blue Sky laws from paying such expenses for or on behalf of such seller of
Registrable Securities.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall
indemnify and hold harmless the Initial Purchasers, each Holder and each person,
if any, who controls the Initial Purchasers or any Holder (within the meaning of
either Section 15 of the Securities Act or Section 20(a) of the Exchange Act)
from and against all losses, liabilities, damages and expenses (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
Losses arise out of or are based upon the information relating to the Initial
Purchasers or any Holder furnished to the Company in writing by the Initial
Purchasers or such Holder expressly for use therein (including, without
limitation, any information relating to the plan of distribution of Registrable
Securities furnished by such person); provided that the Company shall not be
liable to any Holder of Registrable Securities (or any person controlling such
Holder) to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if either (A)(i) such Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such Holder to the person asserting the claims from
which such Losses arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission, or
(B)(x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which Losses arise. The Company shall also
indemnify each underwriter and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided above with
respect to the indemnification of the Initial Purchasers or the Holders of
Registrable Securities.
15
<PAGE> 16
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each
Holder agrees, and such agreement shall be evidenced by the Holder delivering
the Notice and Questionnaire described in Section 2(d) hereof, severally and not
jointly to indemnify and hold harmless the Initial Purchasers, the other
Holders, the Company, its directors, its officers who sign a Registration
Statement, and each person, if any, who controls the Company, the Initial
Purchasers and any other Holder (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act), from and against all losses
arising out of or based upon any untrue statement of a material fact contained
in any Registration Statement, Prospectus or preliminary prospectus or arising
out of or based upon any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information relating to such Holder so furnished in writing by
such Holder to the Company expressly for use in such Registration Statement or
Prospectus. In no event shall the liability of any Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Initial Purchasers and all persons, if
any, who control the Initial Purchasers within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Holders and all persons, if any, who control any Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (c) the fees and expenses of more than one separate firm (in addition to any
local counsel) for the Company, its directors, its officers who sign a
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Company, and such directors, officers and the control persons of the
16
<PAGE> 17
Company, such firm shall be designated in writing by the Company. In such case
involving the Initial Purchasers and persons who control the Initial Purchasers,
such firm shall be designated in writing by Morgan Stanley & Co. Incorporated.
In such case involving the Holders and such persons who control Holders, such
firm shall be designated in writing by the Holders of the majority of
Registrable Securities sold pursuant to the Registration Statement. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
forty-five (45) days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party, shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability or claims that are the subject matter of such
proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement (before deducting expenses) of the
Debentures pursuant to the Purchase Agreement. Benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions received by them pursuant to the Purchase Agreement and benefits
received by any other Holders shall be deemed to be equal to the value of
receiving Debentures registered under the Securities Act. Benefits received by
any underwriter shall be deemed to be equal to the total discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. The relative fault of
the Holders on the one hand and the Company on the other hand shall be
determined by reference to, among other things, whether the untrue or
17
<PAGE> 18
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method or allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
Losses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a Holder of Registrable Securities shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any liability the
Company may otherwise have hereunder, under the Purchase Agreement or otherwise.
The provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchasers, any Holder or any person controlling any Initial
Purchaser or any Holder and (iii) the sale of any Registrable Securities by any
Holder.
7. INFORMATION REQUIREMENTS.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation, making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable such
Holder to sell
18
<PAGE> 19
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 and Rule 144A under the
Securities Act. Upon the request of any Holder of Registrable Securities, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements. Notwithstanding the foregoing, nothing
in this Section 7 shall be deemed to require the Company to register any of its
securities under any such section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the instructions to Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3.
8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement, provided that the sole damages payable for a violation of
the terms of this Agreement for which Liquidated Damages are expressly provided
pursuant to Section 2(e) hereof shall be such Liquidated Damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) NO CONFLICTING AGREEMENTS. The Company has not, as of the
date hereof, and shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which conflicts with the rights
granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders or Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Common Stock constituting Registrable
Securities (with Holders of Debentures deemed to be the Holders, for purposes of
this Section, of the number of outstanding shares of Common Stock into which
such Debentures are convertible). Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders; provided that the provisions of this
statement may not be amended,
19
<PAGE> 20
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (ii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(i) if to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company in accordance with the
provisions of Sections 8(e):
(ii) if to the Company, to:
Omnicare, Inc.
50 East RiverCenter Blvd. - Suite 1530
Covington, Kentucky 41011
Attention: Chief Financial Order
Telecopy No: (513) 762-6678
with a copy to:
Thompson Hine & Flory LLP
2000 Courthouse Plaza N.E.
Dayton, Ohio 45402
Attention: Joseph M. Rigot
Telecopy No: (937) 443-6586
and
(iii) if to the Special Counsel to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attention: Morton A. Pierce
Telecopy No: (212) 259-6333
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) OWNER OF REGISTRABLE SECURITIES. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the
20
<PAGE> 21
Company as the owner thereof for all purposes, including without limitation, the
giving of notices under this Agreement.
(f) APPROVAL OF HOLDERS. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, (i) Holders of Debentures shall be deemed to be Holders, for such
purposes, of the number of outstanding shares of Common Stock into which such
Debentures are convertible and (ii) Registrable Securities held by the Company
or its affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than the Initial Purchasers or subsequent Holders of Registrable
Securities if such subsequent Holders are deemed to be such affiliates solely by
reason of their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(g) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(h) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.
(i) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
in the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, illegal, void or unenforceable.
(l) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive
21
<PAGE> 22
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights.
(m) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) FURTHER ASSURANCES. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for Liquidated Damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
22
<PAGE> 23
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
OMNICARE, INC.
By: /s/ Cheryl D. Hodges
----------------------------------
Name: Cheryl D. Hodges
Title: Senior Vice President and
Secretary
Accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES, INC.
SMITH BARNEY INC.
WILLIAM BLAIR & COMPANY, L.L.C.
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Allan J. Rimland
--------------------------------
Name: Allan J. Rimland
Title: Vice President
23
<PAGE> 1
Exhibit 5.1
THOMPSON HINE & FLORY LLP
2000 Courthouse Plaza N.E.
P. O. Box 8801
Dayton, OH 45401-8801
Attorneys at Law
(937) 443-6586
February 6, 1998
Omnicare, Inc.,
50 East Rivercenter Blvd.
Suite 1530
Covington, KY 41011
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 being filed
under the Securities Act of 1933 (the "Registration Statement"), pursuant to
which certain securityholders of Omnicare, Inc., a Delaware corporation (the
"Company"), may offer to sell (i) up to an aggregate of $345,000,000 principal
amount of the Company's 5% Convertible Subordinated Debentures due 2007 (the
"Debentures"), (ii) 8,712,121 shares of the Company's Common Stock, par value
$1.00 per share, which are issuable upon the conversion of the Debentures, plus
such additional indeterminate number of shares of Common Stock as may become
issuable upon conversion of the Debentures as a result of adjustments to the
conversion price (the "Conversion Shares"), and (iii) 264,101 shares of the
Company's Common Stock, par value $1.00 per share, which have been issued in
certain transactions by the Company (the "Additional Shares"). Schedule A hereto
lists the number of Additional Shares to be offered by each selling stockholder
thereof pursuant to the Prospectus forming a part of the Registration Statement.
As counsel for the Company, we have examined and are familiar with the
Restated Certificate of Incorporation of the Company and various corporate
records and proceedings relating to the organization of the Company and the
issuance of the Debentures and the Additional Shares. Based upon the foregoing
and upon investigation of such other matters as we considered appropriate to
permit us to render an informed opinion, it is our opinion that:
<PAGE> 2
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2. The Additional Shares are duly authorized, validly issued,
fully paid and nonassessable.
3. The Conversion Shares are duly authorized, and when issued
in accordance with the Indenture dated as of December 10, 1997 by the
Company to The First National Bank of Chicago, as trustee (the
"Indenture"), the Conversion Shares will be validly issued, fully paid
and nonassessable.
4. The Debentures are duly authorized, executed and issued by
the Company and constitute valid and binding obligations of the
Company.
We are members of the bar of the State of Ohio and do not express any
opinion herein other than with respect to the laws of the State of Ohio, the
general corporate laws of the State of Delaware and the federal laws of the
United States of America. This opinion is solely for your information in
connection with the Registration Statement and is not to be quoted or otherwise
referred to in any of your financial statements or public releases, filed with
any governmental agency, or given to any other person without our prior written
consent except as set forth below. This opinion may not be relied upon by any
other person, or used by you for any other purpose, without our prior written
consent.
We consent to the use of this opinion as an Exhibit to the Registration
Statement, and we consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ Thompson Hine & Flory LLP
JMR:PCN
<PAGE> 3
Schedule A
----------
<TABLE>
<CAPTION>
Shares of Common Stock
Selling Stockholder That May be Sold
------------------- ----------------------
<S> <C>
Pharm-Corp of Maine 66,376
Spectrum Care Pharmacy
Limited Liability Company 46,463
Add-On Health Systems, Inc. 57,738
Konsult 61,535
Konsult Data Systems Corporation 15,384
Ralph Kalies 2,737
Michael J. Fiori 11,868
</TABLE>
<PAGE> 1
EXHIBIT 12.1
OMNICARE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7)
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
------------------ ---------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
(1) Income before Income Taxes $68,948 $50,619 $72,143 $41,180 $22,678 $16,983 $ 9,045
Add:
(2) Interest on Indebtedness 1,460 3,450 3,432 5,644 6,223 2,747 2,520
(3) Amortization of Debt Expense 0 220 220 310 310 77 0
(4) Interest Portion of Rent Expense 1,742 1,314 1,963 1,522 1,157 1,012 1,237
------- ------- ------- ------- ------- ------- -------
(5) Income as Adjusted $72,150 $55,603 $77,758 $48,656 $30,368 $20,819 $12,802
======= ======= ======= ======= ======= ======= =======
Fixed Charges
(6) Interest on Indebtedness $ 1,460 $ 3,450 $ 3,432 $ 5,644 $ 6,223 $ 2,747 $ 2,520
(7) Amortization of Debt Expense 0 220 220 310 310 77 0
(8) Capitalized Interest 552 243 386 158 49 0 0
(9) Interest Portion of Rent Expense 1,742 1,314 1,963 1,522 1,157 1,012 1,237
------- ------- ------- ------- ------- ------- -------
(10) Fixed Charges $ 3,754 $ 5,227 $ 6,001 $ 7,634 $ 7,739 $ 3,836 $ 3,757
======= ======= ======= ======= ======= ======= =======
(11) Ratio of Earnings to Fixed Charges(1) 19.22 x 10.64 x 12.96 x 6.37 x 3.92 x 5.43 x 3.41 x
======= ======= ======= ======= ======= ======= =======
<FN>
(1) The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes plus fixed charges (excluding capitalized
interest expense) by fixed charges. Fixed charges consist of interest
expense on debt (including capitalized interest) and one-third (the
proportion deemed representative of the interest portion) of rent
expense.
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 29, 1997 appearing on page 27 of Omnicare Inc.'s Annual Report on Form
10K/A for the year ended December 31, 1996. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Cincinnati, Ohio
February 6, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Omnicare, Inc. for
the registration of $345,000,000 of 5% Convertible Subordinated Debentures due
2007 and 8,976,222 shares of its common stock and to the incorporation by
reference therein of our report dated March 19, 1997 with respect to the
consolidated financial statements and schedule of American Medserve Corporation
included in its Form 10-K for the year ended December 31, 1996 filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Chicago, Illinois
February 5, 1998
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)__
----------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------
OMNICARE, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 31-1001351
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
50 EAST RIVERCENTER BOULEVARD
SUITE 1530
COVINGTON, KENTUCKY 41011
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 3
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 4th day of February, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
25, 1996 (REGISTRATION NO. 333-14201).
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 4, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Omnicare,
Inc. and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN -------
THOUSANDS RCFD BIL MIL THOU
--------- ---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) ................... 0081 4,499,157 1.a.
b. Interest-bearing balances(2) ............................................ 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) ............... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ............ 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to
resell ..................................................................... 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) ...................................................................... RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses ............................... RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve ................................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) .................................... 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D) ........................................ 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases) ................... 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M) ............................... 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) ............................................. 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding ............... 2155 614,921 9.
10. Intangible assets (from Schedule RC-M) ..................................... 2143 277,105 10.
11. Other assets (from Schedule RC-F) .......................................... 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11) ................................... 2170 56,108,875 12.
<FN>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
--------- ------------
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).............................................. RCON 2200 21,496,468 13.a
(1) Noninterest-bearing(1)............................................... RCON 6631 8,918,843 13.a.1
(2) Interest-bearing..................................................... RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)....................................... RCFN 2200 14,164,129 13.b.
(1) Noninterest bearing.................................................. RCFN 6631 352,399 13.b.1
(2) Interest-bearing..................................................... RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: ............................................................. RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury ................................ RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D).................................. RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less............................ RCFD 2332 2,608,057 16.a
b. With a remaining maturity of more than one year through three years ..... A547 379,893 16.b
. c. With a remaining maturity of more than three years ...................... A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... RCFD 2920 614,921 18
19. Subordinated notes and debentures (2)....................................... RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)...................................... RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20).............................. RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... RCFD 3838 0 23
24. Common stock................................................................ RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).................... RCFD 3839 989,408 25
26. a. Undivided profits and capital reserves................................... RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................................. RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments......................... RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27)........................... RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28)............... RCFD 3300 56,108,875 29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of
auditing work performed for the bank by independent external Number
auditors as of any date during 1996 . . . . . . RCFD 6724 . ... M.1
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4 = Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5 = Review of the bank's financial statements by external
auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
