<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SUNRISE MEDICAL, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-3836867
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
</TABLE>
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CALIFORNIA 92008
(760) 930-1500
(Address and telephone number of Registrant's principal executive offices)
------------------------------
STEVEN A. JAYE
SENIOR VICE PRESIDENT
AND GENERAL COUNSEL
SUNRISE MEDICAL, INC.
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CALIFORNIA 92008
(760) 930-1500
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
JEFFREY T. PERO
MELINDA P. HEPPBERGER
LATHAM & WATKINS
505 MONTGOMERY STREET, SUITE 1900
SAN FRANCISCO, CALIFORNIA 94111
(415) 391-0600
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS
DETERMINED BY THE REGISTRANT.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
<S> <C> <C>
Debt securities.............................................
Common stock, $1.00 par value...............................
Preferred stock, $1.00 par value............................
Subscription Rights(3)......................................
Common stock purchase rights(4).............................
Total....................................................... $25,000,000 $6,950
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee, which is
calculated in accordance with Rule 457(o).
(2) Not specified as to each class of securities to be registered hereunder
pursuant to General Instruction II(D) to Form S-3 under the Securities Act
of 1933.
(3) Rights evidencing the right to purchase common stock.
(4) Prior to the occurrence of certain events, rights are attached to and trade
with our common stock. Value attributable to such right, if any, is
reflected in the market price of our common stock.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 26, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUNRISE MEDICAL, INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
SUBSCRIPTION RIGHTS
------------------
We may from time to time sell up to $25,000,000 in the aggregate of:
- debt securities, which may consist of notes, debentures or other types of
debt;
- shares of our common stock, par value $1.00 per share;
- shares of our preferred stock, par value $1.00 per share, in one or more
series; and
- rights to purchase shares of our common stock.
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and any prospectus supplement
carefully before you invest.
Our common stock is traded on The New York Stock Exchange under the symbol
"SMD."
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
We will sell these securities directly to our shareholders or to purchasers
or through agents on our behalf or through underwriters or dealers as designated
from time to time.
This prospectus may not be used to consummate sales of securities unless
accompanied by the applicable prospectus supplement.
The date of this prospectus is , 1999.
<PAGE>
We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and the accompanying supplement to
this prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement as if we had authorized it. This prospectus and the
accompanying supplement to this prospectus do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and the accompanying
supplement to this prospectus constitute an offer to sell or the solicitation of
an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. You should not
assume that the information contained in this prospectus and the supplement to
this prospectus is correct on any date after their respective dates, even though
this prospectus or a supplement is delivered or securities are sold on a later
date.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
ABOUT THIS PROSPECTUS....................................... 3
WHERE YOU CAN FIND MORE INFORMATION......................... 4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 5
THE COMPANY................................................. 5
USE OF PROCEEDS............................................. 5
RATIOS OF EARNINGS TO FIXED CHARGES......................... 6
DESCRIPTION OF DEBT SECURITIES.............................. 7
DESCRIPTION OF COMMON STOCK................................. 15
DESCRIPTION OF PREFERRED STOCK.............................. 15
DESCRIPTION OF RIGHTS....................................... 17
SECTION 203 OF THE DGCL..................................... 18
PLAN OF DISTRIBUTION........................................ 19
LEGAL MATTERS............................................... 20
EXPERTS..................................................... 20
</TABLE>
2
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is a part of registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $25,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the next heading "Where You Can Find More Information."
3
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual and quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You can inspect and
copy these reports, proxy statements and other information at:
- the public reference facilities maintained by the SEC at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and
- the regional offices of the SEC:
Midwest Regional Office, Citicorp Center, Suite 1400, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661-2511
Northeast Regional Office, Suite 1300, 13th Floor, 7 World Trade Center,
New York, New York 10048.
You can also obtain copies of these materials from the public reference
section of the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549, at prescribed rates. You can obtain information on the operation of the
public reference room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a web site (http://www.sec.gov) that makes available reports, proxy
statements and other information regarding registrants that file electronically
with it. You can inspect reports and other information we file at the office of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus. Any statement contained in a document
incorporated by reference in this prospectus is automatically updated and
superseded if information contained in this prospectus, or information that we
later file with the SEC, modifies or replaces this information. We incorporate
by reference the following documents filed by us with the SEC:
- Annual Report on Form 10-K for the year ended July 2, 1999;
- the description of the common stock contained in our Registration
Statement on Form 8-A filed on June 29, 1992, as amended;
- the description of the Common Share Purchase Rights contained in our
registration statement on Form 8-A filed with the SEC on June 29, 1992, as
amended by the description contained in our registration statement on
Form 8-A12B/A filed with the SEC on May 16, 1997 and as further amended by
the description contained in our registration statement on Form 8-A12B/A
filed with the SEC on February 11, 1999;
- all other documents subsequently filed by us pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
and before the termination of the offering, which shall be deemed to be a
part hereof from the date of filing of such documents.
To receive a free copy of any of the documents incorporated by reference in
this prospectus (other than exhibits, unless they are specifically incorporated
by reference in the documents), call or write to the Corporate Secretary,
Sunrise Medical, Inc., 2382 Faraday Avenue, Suite 200, Carlsbad, California
92008, (telephone (760) 930-1500).
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone to
provide you with different information.
4
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information included and incorporated by reference in this
prospectus contains "forward-looking statements" as defined by the Private
Securities Litigation Reform Act of 1995. These statements are only predictions.
Actual events or results may differ materially as a result of risks and
uncertainties facing Sunrise including: (i) the impact of competitive products
and activities; (ii) increased industry pricing pressures; (iii) product
development, commercialization and market acceptance risks; (iv) the rising cost
and availability of raw materials; (v) the reduction or elimination of
government funding for our products; (vi) unfavorable governmental regulatory
actions; (vii) disruptions caused by our consolidations of operations;
(viii) year 2000 compliance related risks; (ix) risks related to our
international operations; (x) our dependence on key personnel; and (xi) other
factors referenced in our Securities and Exchange Commission filings. We
disclaim any obligation to update any such factors or to announce publicly any
revisions to any of the forward-looking statements contained in this prospectus,
or to make corrections to reflect future events or developments, or to forecast
financial results in the future.
THE COMPANY
Sunrise Medical, Inc. is a worldwide leader in the design, manufacture and
marketing of medical products used by the disabled and the elderly. We maintain
number one or number two global market share positions for many of our core
products including:
- custom manual and power wheelchairs and related seating systems;
- home respiratory devices such as compressor nebulizers and oxygen
concentrators;
- personal care products such as walkers, crutches and bath safety products;
- nursing home beds and specialized bathing systems; and
- speech devices for the disabled.
We manufacture our products in the United States, Mexico, the United
Kingdom, Germany, France and Spain and distribute them through company-owned
sales organizations in 19 countries and through independent
importer-distributors in about 80 other countries. Our customers include more
than 20,000 home medical equipment providers and distributors around the world
who provide our products to millions of end-users each year. In addition, we
sell directly to extended care and assisted living facilities and to users of
speech devices.
Headquartered in Carlsbad, California, Sunrise was incorporated in 1983 and
is publicly traded on the New York Stock Exchange under the ticker symbol "SMD."
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we
anticipate that any net proceeds would be used for general corporate purposes,
which may include but are not limited to working capital, capital expenditures,
acquisitions and the repayment or refinancing of our indebtedness. When a
particular series of securities is offered, the prospectus supplement relating
thereto will set forth our intended use for the net proceeds we receive from the
sale of the securities. Pending the application of the net proceeds, we expect
to invest the proceeds in short-term, interest-bearing instruments or other
investment-grade securities.
5
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------------------------
JULY 2, JULY 3, JUNE 27, JUNE 28, JUNE 30,
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
and ratio of earnings to fixed
charges and preferred stock
dividends.......................... 1.5 -- 2.5 -- 4.1
</TABLE>
For the years ended 1998 and 1996, earnings were insufficient to cover fixed
charges in the amounts of $11,802,000 and $51,749,000, respectively.
The ratio of earnings to fixed charges was computed by dividing earnings by
fixed charges. For purposes of computing this ratio, "earnings" consist of:
- income before income taxes, plus
- fixed charges (excluding capitalized interest), and
- minority interests (relating to subsidiaries whose fixed charges are
included in the computation), less
- equity in undistributed earnings of less than 50% owned investments.
"Fixed charges" include:
- interest (whether expensed or capitalized),
- amortization of debt expense,
- discount or premium related to indebtedness, and
- the portion of rental expense that we deem to be representative of
interest.
To date, we have not issued any shares of preferred stock; therefore, the ratios
of earnings to fixed charges and preferred stock dividends are identical to the
ratios presented in this section.
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of our debt
securities. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement whether the general terms
and provisions described in this prospectus apply to a particular series of debt
securities.
The debt securities offered hereby will be issued under an indenture between
us and the trustee named therein. The indenture is subject to, and governed by,
the Trust Indenture Act of 1939, as amended (the "TIA"). We have filed a copy of
the form of indenture as an exhibit to the registration statement and you should
read the indenture for provisions that may be important to you. We have
summarized select portions of the indenture below. The summary is not complete.
In the summary below, we have included references to the section numbers of the
indenture so that you can easily locate these provisions. Capitalized terms used
in the summary below have the meanings specified in the indenture.
GENERAL
The terms of each series of debt securities will be established by or
pursuant to a resolution of our board of directors and detailed or determined in
the manner provided in an officers' certificate or by a supplemental indenture.
(Section 2.2) The particular terms of each series of debt securities will be
described in a prospectus supplement relating to the series, including any
pricing supplement.
We can issue an unlimited amount of debt securities under the indenture that
may be in one or more series with the same or various maturities, at par, at a
premium, or at a discount. We will set forth in a prospectus supplement,
including any pricing supplement, relating to any series of debt securities
being offered, the initial offering price, the aggregate principal amount and
the following terms of the debt securities:
- the title of the debt securities;
- the price or prices (expressed as a percentage of the aggregate principal
amount) at which we will sell the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the date or dates on which we will pay the principal on the debt
securities;
- the rate or rates (which may be fixed or variable) per annum or the method
used to determine the rate or rates (including any commodity, commodity
index, stock exchange index or financial index) at which the debt
securities will bear interest, the date or dates from which interest will
accrue, the date or dates on which interest will commence and be payable
and any regular record date for the interest payable on any interest
payment date;
- the place or places where principal of, premium, and interest on the debt
securities will be payable;
- the terms and conditions upon which we may redeem the debt securities;
- any obligation we have to redeem or purchase the debt securities pursuant
to any sinking fund or analogous provisions or at the option of a holder
of debt securities;
- the dates on which and the price or prices at which we will repurchase the
debt securities at the option of the holders of debt securities and other
detailed terms and provisions of these repurchase obligations;
- the denominations in which the debt securities will be issued, if other
than denominations of $1,000 and any integral multiple thereof;
7
<PAGE>
- whether the debt securities will be issued in the form of certificated
debt securities or global debt securities;
- the portion of principal amount of the debt securities payable upon
declaration of acceleration of the maturity date, if other than the
principal amount;
- the currency of denomination of the debt securities;
- the designation of the currency, currencies or currency unit in which
payment of principal of, premium and interest on the debt securities will
be made;
- if payments of principal of, premium or interest on the debt securities
will be made in one or more currencies or currency units other than that
or those in which the debt securities are denominated, the manner in which
the exchange rate with respect to these payments will be determined;
- the manner in which the amounts of payment of principal of, premium or
interest on the debt securities will be determined, if these amounts may
be determined by reference to an index based on a currency or currencies
other than that in which the debt securities are denominated or designated
to be payable or by reference to a commodity, commodity index, stock
exchange index or financial index;
- any provisions relating to any security provided for the debt securities;
- any addition to or change in the Events of Default described in this
prospectus or in the indenture with respect to the debt securities and any
change in the acceleration provisions described in this prospectus or in
the indenture with respect to the debt securities;
- any addition to or change in the covenants described in this prospectus or
in the indenture with respect to the debt securities;
- any other terms of the debt securities, which may modify or delete any
provision of the indenture as it applies to that series; and
- any depositaries, interest rate calculation agents, exchange rate
calculation agents or other agents with respect to the debt securities.
(Section 2.2)
We may issue debt securities that provide for an amount less than their
stated principal amount to be due and payable upon declaration of acceleration
of their maturity pursuant to the terms of the indenture. We will provide you
with information on the federal income tax considerations and other special
considerations applicable to any of these debt securities in the applicable
prospectus supplement.
If we denominate the purchase price of any of the debt securities in a
foreign currency or currencies or a foreign currency unit or units, or if the
principal of and any premium and interest on any series of debt securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
we will provide you with information on the restrictions, elections, general tax
considerations, specific terms and other information with respect to that issue
of debt securities and such foreign currency or currencies or foreign currency
unit or units in the applicable prospectus supplement.
PAYMENT OF INTEREST AND EXCHANGE
Each debt security will be represented by either one or more global
securities registered in the name of The Depository Trust Company, as Depositary
(the "Depositary"), or a nominee of the Depositary (we will refer to any debt
security represented by a global debt security as a "book-entry debt security"),
or a certificate issued in definitive registered form (we will refer to any debt
security represented by a certificated security as a "certificated debt
security"), as described in the applicable
8
<PAGE>
prospectus supplement. Except as described under "Global Debt Securities and
Book-Entry System" below, book-entry debt securities will not be issuable in
certificated form.
CERTIFICATED DEBT SECURITIES. You may transfer or exchange certificated
debt securities at the trustee's office or paying agencies in accordance with
the terms of the indenture. No service charge will be made for any transfer or
exchange of certificated debt securities, but we may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
with a transfer or exchange.
You may transfer certificated debt securities and the right to receive the
principal of, premium and interest on certificated debt securities only by
surrendering the old certificate representing those certificated debt securities
and either we or the trustee will reissue the old certificate to the new holder
or we or the trustee will issue a new certificate to the new holder.
GLOBAL DEBT SECURITIES AND BOOK-ENTRY SYSTEM. Each global debt security
representing book-entry debt securities will be deposited with, or on behalf of,
the Depositary, and registered in the name of the Depositary or a nominee of the
Depositary.
The Depositary has indicated it intends to follow the following procedures
with respect to book-entry debt securities.
Ownership of beneficial interests in book-entry debt securities will be
limited to persons that have accounts with the Depositary for the related global
debt security ("participants") or persons that may hold interests through
participants. Upon the issuance of a global debt security, the Depositary will
credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal amounts of the book-entry debt securities
represented by the global debt security beneficially owned by such participants.
The accounts to be credited will be designated by any dealers, underwriters or
agents participating in the distribution of the book-entry debt securities.
Ownership of book-entry debt securities will be shown on, and the transfer of
the ownership interests will be effected only through, records maintained by the
Depositary for the related global debt security (with respect to interests of
participants) and on the records of participants (with respect to interests of
persons holding through participants). The laws of some states may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. These laws may impair the ability to own, transfer or pledge
beneficial interests in book-entry debt securities.
So long as the Depositary for a global debt security, or its nominee, is the
registered owner of that global debt security, the Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the book-entry
debt securities represented by such global debt security for all purposes under
the indenture. Except as described herein, beneficial owners of book-entry debt
securities will not be entitled to have securities registered in their names,
will not receive or be entitled to receive physical delivery of a certificate in
definitive form representing securities and will not be considered the owners or
holders of those securities under the indenture. Accordingly, to exercise any
rights of a holder under the indenture, each person beneficially owning
book-entry debt securities must rely on the procedures of the Depositary for the
related global debt security and, if that person is not a participant, on the
procedures of the participant through which that person owns its interest.
We understand, however, that under existing industry practice, the
Depositary will authorize the persons on whose behalf it holds a global debt
security to exercise certain rights of holders of debt securities, and the
indenture provides that we, the trustee and our respective agents will treat as
the holder of a debt security the persons specified in a written statement of
the Depositary with respect to that global debt security for purposes of
obtaining any consents or directions required to be given by holders of the debt
securities pursuant to the indenture. (Section 2.14.6)
We will make payments of principal of, and premium and interest on
book-entry debt securities to the Depositary or its nominee, as the case may be,
as the registered holder of the related global debt
9
<PAGE>
security. (Section 2.14.5) Sunrise, the trustee and any other agent of ours or
agent of the trustee will not have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a global debt security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
We expect that the Depositary, upon receipt of any payment of principal of,
premium or interest on a global debt security, will immediately credit
participants' accounts with payments in amounts proportionate to the respective
amounts of book-entry debt securities held by each participant as shown on the
records of the Depositary. We also expect that payments by participants to
owners of beneficial interests in book-entry debt securities held through those
participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of those participants.
We will issue certificated debt securities in exchange for each global debt
security if the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by us within 90 days. In addition, we may at any time and
in our sole discretion determine not to have any of the book-entry debt
securities of any series represented by one or more global debt securities and,
in that event, we will issue certificated debt securities in exchange for the
global debt securities of that series. Global debt securities will also be
exchangeable by the holders for certificated debt securities if an Event of
Default with respect to the book-entry debt securities represented by those
global debt securities has occurred and is continuing. Any certificated debt
securities issued in exchange for a global debt security will be registered in
such name or names as the Depositary shall instruct the trustee. We expect that
such instructions will be based upon directions received by the Depositary from
participants with respect to ownership of book-entry debt securities relating to
such global debt security.
We have obtained the foregoing information in this section concerning the
Depositary and the Depositary's book-entry system from sources we believe to be
reliable, but we take no responsibility for the accuracy of this information.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into, or convey, transfer or lease all
or substantially all of our properties and assets to, any person (a "successor
person"), and we may not permit any person to merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to us, unless:
- the successor person is a corporation, partnership, trust or other entity
organized and validly existing under the laws of any U.S. domestic
jurisdiction and expressly assumes our obligations on the debt securities
and under the indenture;
- immediately after giving effect to the transaction, no Event of Default,
and no event which, after notice or lapse of time, or both, would become
an Event of Default, shall have occurred and be continuing under the
indenture; and
- certain other conditions are met. (Section 5.1)
COVENANTS
Unless we state otherwise in (a) the applicable prospectus supplement and in
a supplement to the indenture, (b) a board resolution, or (c) an officers'
certificate delivered pursuant to the indenture, the debt securities will not
contain any restrictive covenants, including covenants restricting us or any of
our subsidiaries from incurring, issuing, assuming or guarantying any
indebtedness secured by a lien on
10
<PAGE>
any of our or our subsidiaries' property or capital stock, or restricting us or
any of our subsidiaries from entering into any sale and leaseback transactions.
EVENTS OF DEFAULT
"Event of Default" means with respect to any series of debt securities, any
of the following:
- default in the payment of any interest upon any debt security of that
series when it becomes due and payable, and continuance of that default
for a period of 30 days (unless the entire amount of such payment is
deposited by us with the trustee or with a paying agent prior to the
expiration of the 30-day period);
- default in the payment of principal of or premium on any debt security of
that series when due and payable;
- default in the deposit of any sinking fund payment, when and as due in
respect of any debt security of that series;
- default in the performance or breach of any other covenant or warranty by
us in the indenture (other than a covenant or warranty that has been
included in the indenture solely for the benefit of a series of debt
securities other than that series), which default continues uncured for a
period of 60 days after we receive written notice from the trustee or we
and the trustee receive written notice from the holders of at least 25% in
principal amount of the outstanding debt securities of that series as
provided in the indenture;
- an event of default under any of our Debt (including a default with
respect to debt securities of any series other than that series) or any
Subsidiary, whether that Debt exists today or is created at a later date,
if the default results from our failure to pay the Debt when it becomes
due;
- the principal amount of the Debt, together with the principal amount of
any other Debt in default for failure to pay principal at stated final
maturity or the maturity of which has been accelerated, at any time
exceeds a specified amount; and
- the Debt is not discharged or the acceleration is not rescinded or
annulled within 10 days after we receive written notice as provided in the
indenture;
- certain events of bankruptcy, insolvency or reorganization; and
- any other Event of Default provided with respect to debt securities of
that series that is described in the applicable prospectus supplement
accompanying this prospectus.
No Event of Default with respect to a particular series of debt securities
(except as to certain events of bankruptcy, insolvency or reorganization)
necessarily constitutes an Event of Default with respect to any other series of
debt securities. (Section 6.1) An Event of Default may also be an event of
default under our bank credit agreements in existence from time to time and
under certain guaranties by us of any subsidiary indebtedness. In addition,
certain Events of Default or an acceleration under the indenture may also be an
event of default under some of our other indebtedness outstanding from time to
time.
If an Event of Default with respect to debt securities of any series at the
time outstanding occurs and is continuing, then the trustee or the holders of
not less than 25% in principal amount of the outstanding debt securities of that
series may, by written notice to us (and to the trustee if given by the
holders), declare to be due and payable immediately the principal (or, if the
debt securities of that series are discount securities, that portion of the
principal amount as may be specified in the terms of that series) and premium of
all debt securities of that series. In the case of an Event of Default resulting
from certain events of bankruptcy, insolvency or reorganization, the principal
(or such specified amount) and premium of all outstanding debt securities will
become and be immediately due and
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payable without any declaration or other act by the trustee or any holder of
outstanding debt securities. At any time after a declaration of acceleration
with respect to debt securities of any series has been made, but before the
trustee has obtained a judgment or decree for payment of the money due, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other than
by acceleration and certain other conditions, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal and premium with respect to debt securities of that series, have been
cured or waived as provided in the indenture. (Section 6.2) For information as
to waiver of defaults see the discussion under "--Modification and Waiver"
below. We refer you to the prospectus supplement relating to any series of debt
securities that are discount securities for the particular provisions relating
to acceleration of a portion of the principal amount of the discount securities
upon the occurrence of an Event of Default and the continuation of an Event of
Default.
The indenture provides that the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of outstanding debt securities, unless the trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Section 7.1(e))
Subject to certain rights of the trustee, the holders of a majority in principal
amount of the outstanding debt securities of any series 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 with respect to the debt securities of that series. (Section 6.12)
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the indenture
or for the appointment of a receiver or trustee, or for any remedy under the
indenture, unless:
- that holder has previously given to the trustee written notice of a
continuing Event of Default with respect to debt securities of that
series; and
- the holders of at least 25% in principal amount of the outstanding debt
securities of that series have made written request, and offered
reasonable indemnity, to the trustee to institute such proceeding as
trustee, and the trustee shall not have received from the holders of a
majority in principal amount of the outstanding debt securities of that
series a direction inconsistent with that request and has failed to
institute the proceeding within 60 days. (Section 6.7)
Notwithstanding the foregoing, the holder of any debt security will have an
absolute and unconditional right to receive payment of the principal of, premium
and any interest on that debt security on or after the due dates expressed in
that debt security and to institute suit for the enforcement of payment.
(Section 6.8)
The indenture requires us, within 90 days after the end of our fiscal year,
to furnish to the trustee a statement as to compliance with the indenture.
(Section 4.3) The indenture provides that the trustee may withhold notice to the
holders of debt securities of any series of any Default or Event or Default
(except in payment on any debt securities of that series) with respect to debt
securities of that series if it in good faith determines that withholding notice
is in the interest of the holders of those debt securities. (Section 7.5)
MODIFICATION AND WAIVER
We and the trustee may modify and amend the indenture with the consent of
the holders of at least a majority in principal amount of the outstanding debt
securities of each series affected by the modifications or amendments. We and
the trustee may not make any modification or amendment
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without the consent of the holder of each affected debt security then
outstanding if that amendment will:
- change the amount of debt securities whose holders must consent to an
amendment or waiver;
- reduce the rate of or extend the time for payment of interest (including
default interest) on any debt security;
- reduce the principal of or premium on or change the fixed maturity of any
debt security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation with respect to any
series of debt securities;
- reduce the principal amount of discount securities payable upon
acceleration of maturity;
- waive a default in the payment of the principal of, premium or interest on
any debt security (except a rescission of acceleration of the debt
securities of any series by the holders of at least a majority in
aggregate principal amount of the then outstanding debt securities of that
series and a waiver of the payment default that resulted from that
acceleration);
- make the principal of or premium or interest on any debt security payable
in currency other than that stated in the debt security;
- make any change to certain provisions of the indenture relating to, among
other things, the right of holders of debt securities to receive payment
of the principal of, premium and interest on those debt securities and to
institute suit for the enforcement of any payment and to waivers or
amendments; or
- waive a redemption payment with respect to any debt security or change any
of the provisions with respect to the redemption of any debt securities.
(Section 9.3)
Except for certain specified provisions, the holders of at least a majority
in principal amount of the outstanding debt securities of any series may on
behalf of the holders of all debt securities of that series waive our compliance
with provisions of the indenture. (Section 9.2) The holders of a majority in
principal amount of the outstanding debt securities of any series may on behalf
of the holders of all the debt securities of that series waive any past default
under the indenture with respect to that series and its consequences, except a
default in the payment of the principal of, premium or any interest on any debt
security of that series; provided, however, that the holders of a majority in
principal amount of the outstanding debt securities of any series may rescind an
acceleration and its consequences, including any related payment default that
resulted from the acceleration. (Section 6.13)
DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
LEGAL DEFEASANCE. The indenture provides that, unless otherwise provided by
the terms of the applicable series of debt securities, we may be discharged from
any and all obligations in respect of the debt securities of any series (except
for certain obligations to register the transfer or exchange of debt securities
of the series, to replace stolen, lost or mutilated debt securities of the
series, and to maintain paying agencies and certain provisions relating to the
treatment of funds held by paying agents). We will be so discharged upon the
deposit with the trustee, in trust, of money and/or U.S. Government Obligations
or, in the case of debt securities denominated in a single currency other than
U.S. Dollars, Foreign Government Obligations, that, through the payment of
interest and principal in accordance with their terms, will provide money in an
amount sufficient in the opinion of a nationally recognized firm of independent
public accountants to pay and discharge each installment of principal, premium
and interest on and any mandatory sinking fund payments in respect of the debt
securities of that series on the stated maturity of such payments in accordance
with the terms of the indenture and those debt securities.
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This discharge may occur only if, among other things, we have delivered to
the trustee an officers' certificate and an opinion of counsel stating that we
have received from, or there has been published by, the United States Internal
Revenue Service a ruling or, since the date of execution of the indenture, there
has been a change in the applicable United States federal income tax law, in
either case to the effect that holders of the debt securities of such series
will not recognize income, gain or loss for United States federal income tax
purposes as a result of the deposit, defeasance and discharge and will be
subject to United States federal income tax on the same amount and in the same
manner and at the same times as would have been the case if the deposit,
defeasance and discharge had not occurred. (Section 8.3)
DEFEASANCE OF CERTAIN COVENANTS. The indenture provides that, unless
otherwise provided by the terms of the applicable series of debt securities,
upon compliance with certain conditions:
- we may omit to comply with the restrictive covenants contained in Sections
4.2, 4.3 through 4.6 and Section 5.1 of the indenture, as well as any
additional covenants contained in a supplement to the indenture, a board
resolution or an officers' certificate delivered pursuant to the
indenture; and
- Events of Default under Section 6.1(e) of the indenture will not
constitute a Default or an Event of Default with respect to the debt
securities of that series.
The conditions include:
- depositing with the trustee money and/or U.S. Government Obligations or,
in the case of debt securities denominated in a single currency other than
U.S. Dollars, Foreign Government Obligations, that, through the payment of
interest and principal in accordance with their terms, will provide money
in an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay principal, premium and interest on
and any mandatory sinking fund payments in respect of the debt securities
of that series on the stated maturity of those payments in accordance with
the terms of the indenture and those debt securities; and
- delivering to the trustee an opinion of counsel to the effect that the
holders of the debt securities of that series will not recognize income,
gain or loss for United States federal income tax purposes as a result of
the deposit and related covenant defeasance and will be subject to United
States federal income tax in the same amount and in the same manner and at
the same times as would have been the case if the deposit and related
covenant defeasance had not occurred. (Section 8.4)
COVENANT DEFEASANCE AND EVENTS OF DEFAULT. In the event we exercise our
option not to comply with certain covenants of the indenture with respect to any
series of debt securities and the debt securities of that series are declared
due and payable because of the occurrence of any Event of Default, the amount of
money and/or U.S. Government Obligations or Foreign Government Obligations on
deposit with the trustee will be sufficient to pay amounts due on the debt
securities of that series at the time of their stated maturity but may not be
sufficient to pay amounts due on the debt securities of that series at the time
of the acceleration resulting from the Event of Default. However, we will remain
liable for those payments.
"Foreign Government Obligations" means, with respect to debt securities of
any series that are denominated in a currency other than U.S. Dollars:
- direct obligations of the government that issued or caused to be issued
such currency for the payment of which obligations its full faith and
credit is pledged, which are not callable or redeemable at the option of
the issuer thereof; or
- obligations of a person controlled or supervised by or acting as an agency
or instrumentality of that government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by that
government, which are not callable or redeemable at the option of the
issuer thereof.
GOVERNING LAW
The indenture and the debt securities will be governed by, and construed in
accordance with, the internal laws of the State of New York. (Section 10.10)
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DESCRIPTION OF COMMON STOCK
We have authority to issue 40,000,000 shares of common stock, par value
$1.00 per share.
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. Cumulative voting applies for
the election of directors. Under cumulative voting, each stockholder is entitled
to cast as many votes in the election as equals the product of the number of
directors to be elected and the aggregate number of shares of common stock held
by such stockholder. The stockholder may cumulate such votes for one or more
directors as the stockholder determines.
Generally, all matters to be voted on by stockholders must be approved by a
majority (or, in the case of election of directors, by a plurality) of the votes
entitled to be cast by the holders of all shares of common stock that are
present in person or represented by proxy, subject to any voting rights granted
to holders of any preferred stock. Our bylaws provide that action taken by
written consent of the stockholders must be approved by at least seventy-five
percent of the votes entitled to be cast by the holders of all shares of common
stock.
The common stock is neither redeemable nor convertible into other
securities, and there are no sinking fund provisions.
Subject to any preferential rights of any outstanding series of preferred
stock created by the board from time to time, the holders of shares of common
stock will be entitled to such cash dividends as may be declared from time to
time by the board from funds available therefor.
Subject to any preferential rights of any outstanding series of preferred
stock created from time to time by the board, upon liquidation, dissolution or
winding up of Sunrise, the holders of shares of our common stock will be
entitled to receive pro rata all our assets available for distribution to such
holders.
Our common stock is listed on the New York Stock Exchange. The transfer
agent and registrar for our common stock is ChaseMellon Shareholder Services.
DESCRIPTION OF PREFERRED STOCK
Under our Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), shares of preferred stock may be issued from time to time, in
one or more classes or series, as authorized by our board of directors,
generally without the approval of the stockholders.
The Company has authorized 5,000,000 shares of preferred stock. At
October 25, 1999 the Company had no shares outstanding. Subject to limitations
prescribed by the Delaware General Corporation Law ("DGCL"), the Certificate of
Incorporation and the Second Amended and Restated Bylaws of the Company (the
"Bylaws"), the board of directors is authorized to fix the number of shares
constituting each class or series of preferred stock and the designations and
powers, preferences and relative, participating, optional or other special
rights, including such provisions as may be desired concerning voting,
redemption, dividends, dissolution or the distribution of assets, conversion or
exchange, and such other subjects or matters as may be fixed by resolution of
the board of directors or duly authorized committee thereof. The preferred stock
offered hereby will, when issued, be fully paid and nonassessable and will not
have, or be subject to, any preemptive or similar rights. The board of directors
could authorize the issuance of shares of preferred stock with terms and
conditions which could have the effect of discouraging a takeover or other
transaction which holders of some, or a majority, of such shares might believe
to be in their best interests or in which holders of some, or a majority, of
such shares might receive a premium for their shares over the then-market price
of such shares.
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We will describe in a prospectus supplement the following terms of the class
or series of preferred stock being offered:
- the title and stated value of the preferred stock;
- the number of shares of the preferred stock offered, the liquidation
preference per share and the purchase price of the preferred stock;
- the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred stock;
- whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on the preferred stock shall
accumulate;
- the procedures for any auction and remarketing, if any, for the preferred
stock;
- the provisions for a sinking fund, if any, for the preferred stock;
- the provisions for redemption, if applicable, of the preferred stock;
- any listing of the preferred stock on any securities exchange or market;
- the terms and conditions, if applicable, upon which the preferred stock
will be convertible into our common stock, including the conversion price,
or manner of calculation thereof, and conversion period;
- the terms and conditions, if applicable, upon which preferred stock will
be exchangeable into debt securities of Sunrise, including the exchange
price, or manner of calculation thereof, and exchange period;
- voting rights, if any, of the preferred stock;
- a discussion of any material and/or special United States federal income
tax considerations applicable to the preferred stock;
- the relative ranking and preferences of the preferred stock as to dividend
rights and rights upon liquidation, dissolution or winding up of our
affairs;
- any limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
our affairs; and
- any other specific terms, preferences, rights, limitations or restrictions
of the preferred stock.
Unless otherwise specified in the prospectus supplement, the preferred stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of Sunrise rank:
- senior to all classes or series of our common stock, and to all equity
securities issued by us the terms of which specifically provide that such
equity securities rank junior to such preferred stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of
Sunrise;
- on a parity with all equity securities issued by us that do not rank
senior or junior to the preferred stock with respect to dividend rights or
rights upon liquidation, dissolution or winding up of Sunrise; and
- junior to all equity securities issued by Sunrise the terms of which do
not specifically provide that such equity securities rank on a parity with
or junior to the preferred stock with respect to dividend rights or rights
upon liquidation, dissolution or winding up of Sunrise (including any
entity with which we may be merged or consolidated or to which all or
substantially all our
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assets may be transferred or which transfers all or substantially all of
our assets). As used for these purposes, the term "equity securities" does
not include convertible debt securities.
DESCRIPTION OF RIGHTS
Sunrise may issue to its stockholders rights to purchase common stock. These
rights may be issued independently or together with any other security offered
hereby and may or may not be transferable by the stockholder receiving the
rights in the rights offering. In connection with any rights offering, we may
enter into a standby underwriting arrangement with one or more underwriters
pursuant to which such underwriter will purchase any securities remaining
unsubscribed for after the rights offering. Certificates evidencing the rights
and a prospectus supplement relating to the rights offering will be distributed
to our stockholders on the record date we set for receiving rights in the rights
offering.
The applicable prospectus supplement will describe the following terms of
the rights:
- the title of the rights;
- the exercise price for the rights;
- the number of rights issued to each stockholder;
- the extent to which the rights are transferable;
- if applicable, a discussion of the material United States federal income
tax considerations applicable to the issuance or exercise of the rights;
- any other terms of the rights, including terms, procedures and limitations
relating to the exchange and exercise of the rights;
- the date on which the right to exercise the rights shall commence, and the
date on which the right shall expire;
- the extent to which the right includes an over-subscription privilege with
respect to unsubscribed securities; and
- if applicable, the material terms of any standby underwriting arrangement
entered into by Sunrise in connection with the rights offering.
EXERCISE OF RIGHTS
Each right will entitle the holder of rights to purchase for cash the
principal amount of shares of common stock at the exercise price as shall be set
forth in, or be determinable as set forth in, the prospectus supplement relating
to the rights offered thereby. Rights may be exercised at any time up to the
close of business on the expiration date for the rights set forth in the
applicable prospectus supplement. After the close of business on the expiration
date, all unexercised rights will become void.
Rights may be exercised as set forth in the applicable prospectus supplement
relating to the rights offered thereby. Upon receipt of payment and the rights
certificate properly completed and duly executed at the corporate trust office
of the rights agent or any other office indicated in the prospectus supplement,
we will, as soon as practicable, forward the shares of common stock purchasable
upon such exercise. In the event that not all of the rights issued in any rights
offering are exercised, we may determine to offer any unsubscribed securities
directly to persons other than stockholders, to or through agents, underwriters
or dealers or through a combination of such methods, including pursuant to
standby underwriting arrangements, as set forth in the applicable prospectus
supplement.
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SECTION 203 OF THE DGCL
We are subject to the "business combination" statute of the DGCL, an
anti-takeover law enacted in 1988. In general, Section 203 of the DGCL prohibits
a publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder," for a period of three years after the date of
the transaction in which a person became an "interested stockholder," unless:
- prior to such date the board of directors of the corporation approved
either the "business combination" or the transaction which resulted in the
stockholder becoming an "interested stockholder,"
- upon consummation of the transaction which resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder" owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned (1) by persons who are
directors and also officers and (2) employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange
offer, or
- on or subsequent to such date the "business combination" is approved by
the board of directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of a least 66% of the outstanding
voting stock which is not owned by the "interested stockholder."
A "business combination" includes mergers, stock or asset sales and other
transactions resulting in a financial benefit to the "interested stockholders."
An "interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock. Although Section 203 permits us to elect not to be
governed by its provisions, we have not made this election. As a result of the
application of Section 203, potential acquirors of Sunrise may be discouraged
from attempting to effect an acquisition transaction with us, thereby possibly
depriving holders of our securities of certain opportunities to sell or
otherwise dispose of such securities at above-market prices pursuant to such
transactions.
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PLAN OF DISTRIBUTION
We may sell the securities directly to our stockholders, directly to one or
more purchasers, through agents, to or through one or more dealers, to or
through underwriters or through a combination of any such methods of sale.
We may distribute the securities from time to time in one or more
transactions:
- at a fixed price or prices, which may be changed;
- at market prices prevailing at the time of sale;
- at prices related to such prevailing market prices; or
- at negotiated prices.
Offers to purchase the securities being offered hereby may be solicited
directly by us or by agents designated by us from time to time. Any such agent,
who may be deemed to be our "underwriter" as that term is defined in the
Securities Act, involved in the offer or sale of such securities will be named,
and any commissions payable by us to such agent will be set forth, in the
applicable prospectus supplement.
If a dealer is utilized in the sale of the securities, we will sell the
securities to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale.
If an underwriter is, or underwriters are, utilized in the sale, we will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters will be set forth in the applicable
prospectus supplement, which will be used by the underwriter to make resales of
the securities to the public. In connection with the sale of the securities,
such underwriter may be deemed to have received compensation from us in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of the securities for whom they may act as agents. Underwriters may
also sell the securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commission from the purchasers for whom they may act as
agents. Any underwriting compensation paid by us to underwriters in connection
with the offering of securities, and any discounts, concessions or commission
allowed by underwriters to participating dealers, will be set forth in the
applicable prospectus supplement.
Pursuant to any standby underwriting agreement entered into in connection
with a rights offering, persons acting as standby underwriters may receive a
commitment fee for all securities underlying the rights that the underwriter
commits to purchase on a standby basis. Additionally, prior to the expiration
date with respect to any rights, any standby underwriters in a rights offering
may offer such securities on a when-issued basis, including securities to be
acquired through the purchase and exercise of rights, at prices set from time to
time by the standby underwriters. After the expiration date with respect to such
rights, the underwriters may offer securities of the type underlying the rights,
whether acquired pursuant to a standby underwriting agreement, the exercise of
the rights or the purchase of such securities in the market, to the public at a
price or prices to be determined by the underwriters. The standby underwriters
may thus realize profits or losses independent of the underwriting discounts or
commission paid by us. In the event that we do not enter into a standby
underwriting arrangement in connection with a rights offering, we may elect to
retain a dealer-manager to manage the rights offering for us. Any such
dealer-manager may offer securities of the type underlying the rights acquired
or to be acquired pursuant to the purchase and exercise of rights and may thus
realize profits or losses independent of any dealer-manager fee paid by us.
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If so indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or other persons to solicit offers by certain institutions
to purchase the securities offered hereby pursuant to contracts providing for
payment and delivery on a future date or dates set forth in the applicable
prospectus supplement. Institutions with which such contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others. The
obligations of any purchasers under any such contract will not be subject to any
conditions except that (a) the purchase of such securities shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject and (b) if the securities are also being sold to
underwriters, we shall have sold to such underwriters the securities offered
hereby which are not sold for delayed delivery. The underwriters, dealers and
such other persons will not have any responsibility in respect of the validity
or performance of such contracts. The applicable prospectus supplement relating
to such contracts will set forth the price to be paid for securities pursuant to
such contracts, the commission payable for solicitation of such contracts and
the date or dates in the future for delivery of the securities pursuant to such
contracts.
We may enter into agreements to indemnify underwriters, dealers and agents
who participate in the distribution of securities against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
Latham & Watkins of San Francisco, California, and Steven A. Jaye, our
General Counsel, each will issue an opinion about certain legal matters with
respect to the securities for Sunrise. Any underwriters will be advised about
the other issues relating to any offering by their own legal counsel.
EXPERTS
The consolidated financial statements and schedule of Sunrise Medical, Inc.
as of July 2, 1999 and July 3, 1998, and for each of the years in the three-year
period ended July 2, 1999, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us in connection with the distribution of the
securities being registered are as set forth in the following table:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee...................... $ 6,950
*Rating Agency Fees......................................... 60,000
*NYSE Listing Fee........................................... 25,000
*Legal Fees and Expenses.................................... 100,000
*Accounting Fees and Expenses............................... 75,000
*Printing Expenses.......................................... 50,000
*Blue Sky Fees.............................................. 5,000
*Trustee/Issuing & Paying Agent Fees and Expenses........... 15,000
*Miscellaneous.............................................. 5,000
--------
*Total.................................................... $341,950
========
</TABLE>
- ------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sunrise is a Delaware corporation. Subsection (b)(7) of Section 102 of the
DGCL, enables a corporation in its original certificate of incorporation or an
amendment thereto to eliminate or limit the personal liability of a director to
the corporation or its stockholders for monetary damages for violations of the
director's fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith in
a manner reasonably believed to be in, or not opposed to, the best interests of
the corporation, and, with respect to any criminal action or proceeding,
provided further that such director or officer had no reasonable cause to
believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification may be made in respect to any claim,
issue or matter as to which such director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
of the circumstances of the case,
II-1
<PAGE>
such director or officer is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Our Certificate of Incorporation and Bylaws provide in effect for the
indemnification of our officers and directors to the extent permitted by
applicable law; provided, however, under our Bylaws, we are required to
indemnify an officer or director in connection with a proceeding (or part
thereof) commenced by such officer or director only if the commencement of such
proceeding (or part thereof) by the officer or director was authorized by our
board of directors.
The Company has in effect insurance policies in the amount of $30 million
covering all of its directors and officers.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement
3.1 Certificate of Incorporation of Sunrise Medical, Inc., and
amendments thereto (incorporated herein by reference to our
Registration Statement No. 2-86314)
3.2 Amendment to Certificate of Incorporation of Sunrise
Medical, Inc., dated November 21, 1988 (incorporated herein
by reference to our 1987 Definitive Proxy Statement)
3.3 Amendment to Certificate of Incorporation of Sunrise
Medical, Inc., dated December 2, 1992 (incorporated herein
by reference to our Form 10-Q for the quarter ended
January 1, 1993)
3.4 Second Amended and Restated Bylaws of Sunrise Medical, Inc.
(incorporated herein by reference to the Current Report on
Form 8-K, dated February 11, 1999)
4.1 Form of Indenture
*4.2 Certificate of Designation
*4.3 Form of Preferred Stock Certificate
*4.4 Form of Rights Certificate
5.1 Opinion of Latham & Watkins
12.1 Statement regarding Computation of Ratios
23.1 Consent of KPMG LLP
23.5 Consent of Latham & Watkins (included in Exhibit 5.1)
24.1 Powers of Attorney (contained on Page II-4)
**25.1 Statement of Eligibility of Trustee on Form T-1
</TABLE>
- ------------------------
* To be filed by a report on Form 8-K pursuant to Regulation S-K, Item 601(b).
** To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of
II-2
<PAGE>
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 SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(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 the information required to be included in a
post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may
be contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 and (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period for any subscription
rights, to set forth the results of the subscription offer, the transactions by
the underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters, and the terms of any subsequent
reoffering thereof. If any public offering by the underwriters is to be made on
terms differing form those set forth on the cover page of the prospectus with
respect to a subscription rights offering, a post-effective amendment will be
filed to set forth the terms of such offering.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(j) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
Subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the SEC under
Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carlsbad, California on October 26, 1999.
<TABLE>
<S> <C> <C>
SUNRISE MEDICAL, INC.
By /s/ MURRAY H. HUTCHISON
-----------------------------------------
Murray H. Hutchison
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
</TABLE>
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Steven Jaye and Ted Tarbet with full
power of substitution and full power to act without the other, his true and
lawful attorney-in-fact and agent to act for him in his name, place and stead,
in any and all capacities, to sign a registration statement on Form S-3 and any
or all amendments thereto (including, without limitation, any post-effective
amendments thereto), and any registration statement for the same offering that
is to be effective under Rule 462(b) of the Securities Act, and to file each of
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 agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully, to all intents and purposes, as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1993, this
registration statement has been signed by each of the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Chairman of the Board, Chief
/s/ MURRAY H. HUTCHISON Executive Officer and
------------------------------------------- President (Principal October 26, 1999
Murray H. Hutchison Executive Officer)
Senior Vice President and
/s/ TED N. TARBET Chief Financial Officer
------------------------------------------- (Principal Financial October 26, 1999
Ted N. Tarbet Officer)
/s/ JOHN M. RADAK Vice President and Controller
------------------------------------------- (Principal October 26, 1999
John M. Radak Accounting Officer)
</TABLE>
11-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LEE A. AULT III
------------------------------------------- Director October 26, 1999
Lee A. Ault III
/s/ MICHAEL N. HAMMES
------------------------------------------- Director October 26, 1999
Michael N. Hammes
------------------------------------------- Director October 26, 1999
William L. Pierpoint
/s/ JOSEPH STEMLER
------------------------------------------- Director October 26, 1999
Joseph Stemler
/s/ JOHN R. WOODHULL
------------------------------------------- Director October 26, 1999
John R. Woodhull
</TABLE>
11-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement
3.1 Certificate of Incorporation of Sunrise Medical, Inc., and
amendments thereto (incorporated herein by reference to our
Registration Statement No. 2-86314)
3.2 Amendment to Certificate of Incorporation of Sunrise
Medical, Inc., dated November 21, 1988 (incorporated herein
by reference to our 1987 Definitive Proxy Statement)
3.3 Amendment to Certificate of Incorporation of Sunrise
Medical, Inc., dated December 2, 1992 (incorporated herein
by reference to our Form 10-Q for the quarter ended
January 1, 1993)
3.4 Second Amended and Restated Bylaws of Sunrise Medical, Inc.
(incorporated herein by reference to the Current Report on
Form 8-K, dated February 11, 1999)
4.1 Form of Indenture
*4.2 Certificate of Designation
*4.3 Form of Preferred Stock Certificate
*4.4 Form of Rights Certificate
5.1 Opinion of Latham & Watkins
12.1 Statement regarding Computation of Ratios
23.1 Consent of KPMG LLP
23.5 Consent of Latham & Watkins (included in Exhibit 5.1)
24.1 Powers of Attorney (contained on Page II-4)
**25.1 Statement of Eligibility of Trustee on Form T-1
</TABLE>
- ------------------------
* To be filed by a report on Form 8-K pursuant to Regulation S-K, Item 601(b).
** To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
SUNRISE MEDICAL, INC.
----------------------------------------
INDENTURE
Dated as of ________, _____
----------------------------------------
[Name of Trustee]
Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
SECTION 1.1. DEFINITIONS............................................................1
SECTION 1.2. OTHER DEFINITIONS......................................................6
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................6
SECTION 1.4. RULES OF CONSTRUCTION..................................................7
ARTICLE II. THE SECURITIES...................................................................7
SECTION 2.1. ISSUABLE IN SERIES.....................................................7
SECTION 2.2. ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.........................7
SECTION 2.3. EXECUTION AND AUTHENTICATION..........................................10
SECTION 2.4. REGISTRAR AND PAYING AGENT............................................11
SECTION 2.5. PAYING AGENT TO HOLD MONEY IN TRUST...................................12
SECTION 2.6. SECURITYHOLDER LISTS..................................................12
SECTION 2.7. TRANSFER AND EXCHANGE.................................................12
SECTION 2.8. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES......................13
SECTION 2.9. OUTSTANDING SECURITIES................................................14
SECTION 2.10. TREASURY SECURITIES...................................................14
SECTION 2.11. TEMPORARY SECURITIES..................................................15
SECTION 2.12. CANCELLATION..........................................................15
SECTION 2.13. DEFAULTED INTEREST....................................................15
SECTION 2.14. GLOBAL SECURITIES.....................................................15
SECTION 2.15. CUSIP NUMBERS.........................................................17
ARTICLE III. REDEMPTION.....................................................................17
SECTION 3.1. NOTICE TO TRUSTEE......................................................17
SECTION 3.2. SELECTION OF SECURITIES TO BE REDEEMED.................................17
SECTION 3.3. NOTICE OF REDEMPTION...................................................18
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.........................................18
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE............................................19
SECTION 3.6. SECURITIES REDEEMED IN PART............................................19
ARTICLE IV. COVENANTS.......................................................................19
SECTION 4.1. PAYMENT OF PRINCIPAL AND INTEREST......................................19
SECTION 4.2. SEC REPORTS............................................................19
SECTION 4.3. COMPLIANCE CERTIFICATE.................................................19
SECTION 4.4. STAY, EXTENSION AND USURY LAWS.........................................20
SECTION 4.5. CORPORATE EXISTENCE....................................................20
SECTION 4.6. TAXES..................................................................20
ARTICLE V. SUCCESSORS.......................................................................21
SECTION 5.1. WHEN COMPANY MAY MERGE, ETC............................................21
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED......................................21
ARTICLE VI. DEFAULTS AND REMEDIES...........................................................22
SECTION 6.1. EVENTS OF DEFAULT......................................................22
<PAGE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....................23
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.......25
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM......................................26
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES...........26
SECTION 6.6. APPLICATION OF MONEY COLLECTED........................................27
SECTION 6.7. LIMITATION ON SUITS...................................................27
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST......28
SECTION 6.9. RESTORATION OF RIGHTS AND REMEDIES....................................28
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE........................................28
SECTION 6.11. DELAY OR OMISSION NOT WAIVER..........................................28
SECTION 6.12. CONTROL BY HOLDERS....................................................29
SECTION 6.13. WAIVER OF PAST DEFAULTS...............................................29
SECTION 6.14. UNDERTAKING FOR COSTS.................................................29
ARTICLE VII. TRUSTEE........................................................................30
SECTION 7.1. DUTIES OF TRUSTEE.....................................................30
SECTION 7.2. RIGHTS OF TRUSTEE.....................................................31
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE..........................................32
SECTION 7.4. TRUSTEE'S DISCLAIMER..................................................32
SECTION 7.5. NOTICE OF DEFAULTS....................................................32
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.........................................33
SECTION 7.7. COMPENSATION AND INDEMNITY............................................33
SECTION 7.8. REPLACEMENT OF TRUSTEE................................................34
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC......................................35
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.........................................35
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....................35
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE........................................36
SECTION 8.1. SATISFACTION AND DISCHARGE OF INDENTURE...............................36
SECTION 8.2. APPLICATION OF TRUST FUNDS; INDEMNIFICATION...........................37
SECTION 8.3. LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES..........................38
SECTION 8.4. COVENANT DEFEASANCE...................................................39
SECTION 8.5. REPAYMENT TO COMPANY..................................................41
ARTICLE IX. AMENDMENTS AND WAIVERS..........................................................41
SECTION 9.1. WITHOUT CONSENT OF HOLDERS............................................41
SECTION 9.2. WITH CONSENT OF HOLDERS...............................................42
SECTION 9.3. LIMITATIONS...........................................................42
SECTION 9.4. COMPLIANCE WITH TRUST INDENTURE ACT...................................43
SECTION 9.5. REVOCATION AND EFFECT OF CONSENTS.....................................43
SECTION 9.6. NOTATION ON OR EXCHANGE OF SECURITIES.................................43
SECTION 9.7. TRUSTEE PROTECTED.....................................................44
ARTICLE X. MISCELLANEOUS....................................................................44
<PAGE>
<CAPTION>
Page
----
<S> <C>
SECTION 10.1. TRUST INDENTURE ACT CONTROLS.........................................44
SECTION 10.2. NOTICES..............................................................44
SECTION 10.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS..........................45
SECTION 10.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT...................45
SECTION 10.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION........................45
SECTION 10.6. RULES BY TRUSTEE AND AGENTS..........................................46
SECTION 10.7. LEGAL HOLIDAYS.......................................................46
SECTION 10.8. NO RECOURSE AGAINST OTHERS...........................................46
SECTION 10.9. COUNTERPARTS.........................................................46
SECTION 10.10. GOVERNING LAWS.......................................................47
SECTION 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS........................47
SECTION 10.12. SUCCESSORS...........................................................47
SECTION 10.13. SEVERABILITY.........................................................47
SECTION 10.14. TABLE OF CONTENTS, HEADINGS, ETC.....................................47
SECTION 10.15. SECURITIES IN A FOREIGN CURRENCY OR IN ECU...........................47
SECTION 10.16. JUDGMENT CURRENCY....................................................48
ARTICLE XI. SINKING FUNDS...................................................................49
SECTION 11.1. APPLICABILITY OF ARTICLE.............................................49
SECTION 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES................49
SECTION 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND............................50
</TABLE>
<PAGE>
SUNRISE MEDICAL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, ____
<TABLE>
<S> <C>
SECTION 310(A)(1) ........................................................................... 7.10
(A)(2) ........................................................................... 7.10
(A)(3) ........................................................................... NOT APPLICABLE
(A)(4) ........................................................................... NOT APPLICABLE
(A)(5) ........................................................................... 7.10
(B) ........................................................................... 7.10
SECTION 311(A) ........................................................................... 7.11
(B) ........................................................................... 7.11
(C) ........................................................................... NOT APPLICABLE
SECTION 312(A) ........................................................................... 2.6
(B) ........................................................................... 10.3
(C) ........................................................................... 10.3
SECTION 313(A) ........................................................................... 7.6
(B)(1) ........................................................................... 7.6
(B)(2) ........................................................................... 7.6
(C)(1) ........................................................................... 7.6
(D) ........................................................................... 7.6
SECTION 314(A) ........................................................................... 4.2, 10.5
(B) ........................................................................... NOT APPLICABLE
(C)(1) ........................................................................... 10.4
(C)(2) ........................................................................... 10.4
(C)(3) ........................................................................... NOT APPLICABLE
(D) ........................................................................... NOT APPLICABLE
(E) ........................................................................... 10.5
(F) ........................................................................... NOT APPLICABLE
SECTION 315(A) ........................................................................... 7.1
(B) ........................................................................... 7.5
(C) ........................................................................... 7.1
(D) ........................................................................... 7.1
(E) ........................................................................... 6.14
SECTION 316(A) ........................................................................... 2.10
(A)(1)(A) ........................................................................... 6.12
(A)(1)(B) ........................................................................... 6.13
(B) ........................................................................... 6.8
SECTION 317(A)(1) ........................................................................... 6.3
(A)(2) ........................................................................... 6.4
(B) ........................................................................... 2.5
SECTION 318(A) ........................................................................... 10.1
</TABLE>
- ----------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
Indenture dated as of ___________, ____ between Sunrise
Medical, Inc., a ____________ ("Company"), and [Name of Trustee], a
________________ ("Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities
issued under this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes imposed on
Holders specified therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official
language of the country of publication customarily published at least once a day
for at least five days in each calendar week and of general circulation in the
place in connection with which the term is used. If it shall be impractical in
the opinion of the Trustee to make any publication of any notice required hereby
in an Authorized Newspaper, any publication or other notice in lieu thereof that
is made or given by the Trustee shall constitute a sufficient publication of
such notice.
"Bearer" means anyone in possession from time to time of a
Bearer Security.
"Bearer Security" means any Security, including any interest
coupon appertaining thereto, that does not provide for the identification of the
Holder thereof.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been adopted by
the Board of Directors or pursuant to authorization by the Board of Directors
and to be in full force and effect on the date of the certificate and delivered
to the Trustee.
<PAGE>
"Business Day" means, unless otherwise provided by Board
Resolution, Officers' Certificate or supplemental indenture hereto for a
particular Series, any day except a Saturday, Sunday or a legal holiday in The
City of New York or the City of ___________ on which banking institutions are
authorized or required by law, regulation or executive order to close.
"Company" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of
the Company by two Officers, one of whom must be the Company's principal
executive officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name
of the Company by its Chairman of the Board, a President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered.
"Debt" of any person as of any date means, without
duplication, all indebtedness of such person in respect of borrowed money,
including all interest, fees and expenses owed in respect thereto (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments.
"Default" means any event which is, or after notice or passage
of time would be, an Event of Default.
"Depository" means, with respect to the Securities of any
Series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the
Commission of the European Union.
2
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Foreign Currency" means any currency or currency unit issued
by a government other than the government of The United States of America.
"Foreign Government Obligations" means with respect to
Securities of any Series that are denominated in a Foreign Currency, (i) direct
obligations of the government that issued or caused to be issued such currency
for the payment of which obligations its full faith and credit is pledged or
(ii) obligations of a person controlled or supervised by or acting as an agency
or instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable or
redeemable at the option of the issuer thereof.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Holder" or "Securityholder" means a person in whose name a
Security is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended from time to time
and shall include the form and terms of particular Series of Securities
established as contemplated hereunder.
"interest" with respect to any Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
"Maturity," when used with respect to any Security or
installment of principal thereof, means the date on which the principal of such
Security or such installment of principal becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, notice of option to elect repayment or
otherwise.
"Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company.
3
<PAGE>
"person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on, and any Additional Amounts in
respect of, the Security.
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt
instruments of the Company of any Series authenticated and delivered under this
Indenture.
"Series" or "Series of Securities" means each series of
debentures, notes or other debt instruments of the Company created pursuant to
Sections 2.1 and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect
Subsidiary of the Company that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act of 1933, as amended, as such regulation is in effect on the date hereof, or
(ii) any group of direct or indirect Subsidiaries of the Company that, taken
together as a group, would be a "significant subsidiary" as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of
1933, as amended, as such regulation is in effect on the date hereof.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of
which at least a majority of the outstanding stock having by the terms thereof
ordinary voting power for the election of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by
such person, or by one or more other Subsidiaries, or by such person and one or
more other Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
SectionSection 77aaa-77bbbb) as in effect on the date of this Indenture;
PROVIDED, HOWEVER, that in the event the Trust Indenture
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Act of 1939 is amended after such date, "TIA" means, to the extent required by
any such amendment, the Trust Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i)
direct obligations of The United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
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Section 1.2. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
- ---- -------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
Section 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a
Securityholder.
"indenture to be qualified" means this
Indenture.
"indenture trustee" or "institutional
trustee" means the Trustee.
"obligor" on the indenture securities means
the Company and any successor obligor upon
the Securities.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein are used herein as so defined.
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Section 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles;
(c) references to "generally accepted accounting
principles" shall mean generally accepted accounting principles in
effect as of the time when and for the period as to which such
accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the
plural include the singular; and
(f) provisions apply to successive events and
transactions.
ARTICLE II.
THE SECURITIES
Section 2.1. ISSUABLE IN SERIES.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers' Certificate detailing the adoption of the terms
thereof pursuant to the authority granted under a Board Resolution. In the case
of Securities of a Series to be issued from time to time, the Board Resolution,
Officers' Certificate or supplemental indenture may provide for the method by
which specified terms (such as interest rate, maturity date, record date or date
from which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of Securities
shall be equally and ratably entitled to the benefits of the Indenture.
Section 2.2. ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.
At or prior to the issuance of any Securities within a Series,
the following shall be established (as to the Series generally, in the case of
Subsection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of Subsections 2.2.2 through
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2.2.22) by a Board Resolution, a supplemental indenture or an Officers'
Certificate pursuant to authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4. the date or dates on which the principal of the
Securities of the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable)
per annum or, if applicable, the method used to determine such rate or rates
(including, but not limited to, any commodity, commodity index, stock exchange
index or financial index) at which the Securities of the Series shall bear
interest, if any, the date or dates from which such interest, if any, shall
accrue, the date or dates on which such interest, if any, shall commence and be
payable and any regular record date for the interest payable on any interest
payment date;
2.2.6. the place or places where the principal of and
interest, if any, on the Securities of the Series shall be payable, or the
method of such payment, if by wire transfer, mail or other means;
2.2.7. if applicable, the period or periods within which,
the price or prices at which and the terms and conditions upon which the
Securities of the Series may be redeemed, in whole or in part, at the option of
the Company;
2.2.8. the obligation, if any, of the Company to redeem or
purchase the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
2.2.9. the dates, if any, on which and the price or prices
at which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
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2.2.10. if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which the Securities of the
Series shall be issuable;
2.2.11. the forms of the Securities of the Series in bearer
or fully registered form (and, if in fully registered form, whether the
Securities will be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the
portion of the principal amount of the Securities of the Series that shall be
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 6.2;
2.2.13. the currency of denomination of the Securities of the
Series, which may be Dollars or any Foreign Currency, including, but not limited
to, the ECU, and if such currency of denomination is a composite currency other
than the ECU, the agency or organization, if any, responsible for overseeing
such composite currency;
2.2.14. the designation of the currency, currencies or
currency units in which payment of the principal of and interest, if any, on the
Securities of the Series will be made;
2.2.15. if payments of principal of or interest, if any, on
the Securities of the Series are to be made in one or more currencies or
currency units other than that or those in which such Securities are
denominated, the manner in which the exchange rate with respect to such payments
will be determined;
2.2.16. the manner in which the amounts of payment of
principal of or interest, if any, on the Securities of the Series will be
determined, if such amounts may be determined by reference to an index based on
a currency or currencies or by reference to a commodity, commodity index, stock
exchange index or financial index;
2.2.17. the provisions, if any, relating to any security
provided for the Securities of the Series;
2.2.18. any addition to or change in the Events of Default
which applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19. any addition to or change in the covenants set forth
in Articles IV or V which applies to Securities of the Series;
2.2.20. any other terms of the Securities of the Series
(which terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section
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9.1, but which may modify or delete any provision of this Indenture insofar as
it applies to such Series); and
2.2.21. any depositories, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to Securities of
such Series if other than those appointed herein.
All Securities of any one Series need not be issued at the
same time and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.
Section 2.3. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent. The signature shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution, supplemental indenture hereto or Officers' Certificate,
upon receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution, supplemental indenture
hereto or Officers' Certificate delivered pursuant to Section 2.2, except as
provided in Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee
shall have received and (subject to Section 7.2) shall be fully protected in
relying on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of
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Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
Section 2.4. REGISTRAR AND PAYING AGENT.
The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series may
be presented or surrendered for payment ("Paying Agent"), where Securities of
such Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect of
the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the name or address of any such
co-registrar, additional paying agent or additional service agent. The term
"Registrar" includes any co-registrar; the term
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<PAGE>
"Paying Agent" includes any additional paying agent; and the term "Service
Agent" includes any additional service agent.
The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.
Section 2.5. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust, for the
benefit of Securityholders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal of or interest on
the Series of Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of Securityholders of any Series of
Securities all money held by it as Paying Agent.
Section 2.6. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders of each Series of Securities and shall otherwise
comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least ten days before each interest payment date
and at such other times as the Trustee may request in writing a list, in such
form and as of such date as the Trustee may reasonably require, of the names and
addresses of Securityholders of each Series of Securities.
Section 2.7. TRANSFER AND EXCHANGE.
Where Securities of a Series are presented to the Registrar or
a co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).
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Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for the
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
Section 2.8. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that Series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 2.9. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases
to be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds on the Maturity of Securities of a Series
money sufficient to pay such Securities payable on that date, then on and after
that date such Securities of the Series cease to be outstanding and interest on
them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
Section 2.10. TREASURY SECURITIES.
In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any request, demand,
authorization, direction, notice, consent or waiver Securities of a Series owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
Section 2.11. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities upon
a Company Order. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of
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the same Series and date of maturity in exchange for temporary Securities. Until
so exchanged, temporary securities shall have the same rights under this
Indenture as the definitive Securities.
Section 2.12. CANCELLATION.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy such
canceled Securities (subject to the record retention requirement of the Exchange
Act) and deliver a certificate of such destruction to the Company, unless the
Company otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
Section 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on a Series
of Securities, it shall pay the defaulted interest, plus, to the extent
permitted by law, any interest payable on the defaulted interest, to the persons
who are Securityholders of the Series on a subsequent special record date. The
Company shall fix the record date and payment date. At least 30 days before the
record date, the Company shall mail to the Trustee and to each Securityholder of
the Series a notice that states the record date, the payment date and the amount
of interest to be paid. The Company may pay defaulted interest in any other
lawful manner.
Section 2.14. GLOBAL SECURITIES.
2.14.1. TERMS OF SECURITIES. A Board Resolution, a
supplemental indenture hereto or an Officers' Certificate shall establish
whether the Securities of a Series shall be issued in whole or in part in the
form of one or more Global Securities and the Depository for such Global
Security or Securities.
2.14.2. TRANSFER AND EXCHANGE. Notwithstanding any provisions
to the contrary contained in Section 2.7 of the Indenture and in addition
thereto, any Global Security shall be exchangeable pursuant to Section 2.7 of
the Indenture for Securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence
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shall be exchangeable for Securities registered in such names as the Depository
shall direct in writing in an aggregate principal amount equal to the principal
amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security
may not be transferred except as a whole by the Depository with respect to such
Global Security to a nominee of such Depository, by a nominee of such Depository
to such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3. LEGEND. Any Global Security issued hereunder shall
bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4. ACTS OF HOLDERS. The Depository, as a Holder, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
2.14.5. PAYMENTS. Notwithstanding the other provisions of
this Indenture, unless otherwise specified as contemplated by Section 2.2,
payment of the principal of and interest, if any, on any Global Security shall
be made to the Holder thereof.
2.14.6. CONSENTS, DECLARATION AND DIRECTIONS. Except as
provided in Section 2.14.5, the Company, the Trustee and any Agent shall treat a
person as the Holder of such principal amount of outstanding Securities of such
Series represented by a Global Security as shall be specified in a written
statement of the Depositary with respect to such Global Security, for purposes
of obtaining any consents, declarations, waivers or directions required to be
given by the Holders pursuant to this Indenture.
Section 2.15. CUSIP NUMBERS.
The Company in issuing the Securities 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 Holders; PROVIDED that any such notice
may state that no representation is made
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as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other elements of identification printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
Section 3.1. NOTICE TO TRUSTEE.
The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).
Section 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. NOTICE OF REDEMPTION.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.
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The notice shall identify the Securities of the Series to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption
must be surrendered to the Paying Agent to collect the redemption
price;
(e) that interest on Securities of the Series called for
redemption ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms
of the particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed or published as provided
in Section 3.3, Securities of a Series called for redemption become due and
payable on the redemption date and at the redemption price. A notice of
redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price plus accrued interest to the
redemption date.
Section 3.5. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest, if any, on all Securities to be redeemed on that date.
Section 3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.
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ARTICLE IV.
COVENANTS
Section 4.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the
Holders of each Series of Securities that it will duly and punctually pay the
principal of and interest, if any, on the Securities of that Series in
accordance with the terms of such Securities and this Indenture.
Section 4.2. SEC REPORTS.
The Company shall deliver to the Trustee within 15 days after
it files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.4. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture or the Securities; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or
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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 4.5. CORPORATE EXISTENCE.
Subject to Article V, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
Section 4.6. TAXES.
The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
ARTICLE V.
SUCCESSORS
Section 5.1. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge into, or
convey, transfer or lease all or substantially all of its properties and assets
to, any person (a "successor person"), and may not permit any person to merge
into, or convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless:
(a) the successor person (if any) is a corporation,
partnership, trust or other entity organized and validly existing under
the laws of any U.S. domestic jurisdiction and expressly assumes the
Company's obligations on the Securities and under this Indenture and
(b) immediately after giving effect to the transaction,
no Default or Event of Default, shall have occurred and be continuing.
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The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with this Indenture.
Section 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; PROVIDED, HOWEVER, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest, if any, on the
Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the
establishing Board Resolution, supplemental indenture or Officers' Certificate,
it is provided that such Series shall not have the benefit of said Event of
Default:
(a) default in the payment of any interest on any
Security of that Series when it becomes due and payable, and
continuance of such default for a period of 30 days (unless the entire
amount of such payment is deposited by the Company with the Trustee or
with a Paying Agent prior to the expiration of such period of 30 days);
or
(b) default in the payment of the principal of any
Security of that Series at its Maturity; or
(c) default in the deposit of any sinking fund payment,
when and as due in respect of any Security of that Series; or
(d) default in the performance or breach of any covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty that has been included in this Indenture solely for the
benefit of Series of Securities other than that Series), which default
continues uncured for a period of 60 days after there has been given,
by registered
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or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
outstanding Securities of that Series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(e) a default under any Debt of the Company (including a
default with respect to Securities of any Series other than that
Series) or any Subsidiary, whether such Debt now exists or shall
hereafter be created, if (A) such default results from the failure to
pay any such Debt when it becomes due, (B) the principal amount of such
Debt, together with the principal amount of any other such Debt in
default for failure to pay principal at stated final maturity or the
maturity of which has been so accelerated, aggregates $____________ or
more at any one time outstanding, and (C) such Debt is not discharged
or such acceleration is not rescinded or annulled within 10 days after
written notice to the Company by the holder or holders of such Debt in
the manner provided for in the applicable debt instrument; or
(f) the Company or any of its Significant Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit
of its creditors, or
(v) generally is unable to pay its debts as the
same become due; or
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of
its Significant Subsidiaries in an involuntary case,
(ii) appoints a Custodian of the Company or any
of its Significant Subsidiaries or for all or substantially
all of its property, or
(iii) orders the liquidation of the Company or any
of its Significant Subsidiaries,
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and the order or decree remains unstayed and in effect for 60 days; or
(h) any other Event of Default provided with respect to
Securities of that Series, which is specified in a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate, in
accordance with Section 2.2.18.
The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any
Series at the time outstanding occurs and is continuing (other than an Event of
Default referred to in Section 6.1(f) or (g)) then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series may declare the principal amount (or, if
any Securities of that Series are Discount Securities, such portion of the
principal amount as may be specified in the terms of such Securities) of and
accrued and unpaid interest, if any, on all of the Securities of that Series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) and accrued and unpaid interest, if any, shall
become immediately due and payable. If an Event of Default specified in Section
6.1(f) or (g) shall occur, the principal amount (or specified amount) of and
accrued and unpaid interest, if any, on all outstanding Securities shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with
respect to any Series has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(i) all overdue interest, if any, on all
Securities of that Series,
(ii) the principal of any Securities of that
Series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,
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(iii) to the extent that payment of such interest
is lawful, interest upon any overdue principal and overdue
interest at the rate or rates prescribed therefor in such
Securities, and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(b) all Events of Default with respect to Securities of
that Series, other than the non-payment of the principal of Securities
of that Series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or
impair any right consequent thereon.
Section 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of principal of any
Security at the Maturity thereof, or
(c) default is made in the deposit of any sinking fund
payment when and as due by the terms of a Security,
THEN, the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
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and collect the moneys adjudged or deemed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any Securities of any
Series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such Series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
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Section 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, 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 Securities in respect of which such
judgment has been recovered.
Section 6.6. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee
under Section 7.7; and
Second: To the payment of the amounts then due and unpaid
for principal of and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable
on such Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7. LIMITATION ON SUITS.
No Holder of any Security of any Series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that Series;
(b) the Holders of not less than 25% in principal amount
of the outstanding Securities of that Series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the outstanding Securities of that
Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 6.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 6.12. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the
outstanding Securities of any Series 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, with respect
to the Securities of such Series, provided 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) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer of the Trustee,
determine that the proceeding so directed would involve the Trustee in
personal liability.
Section 6.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of
the outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default in the payment of the principal of
or interest on any Security of such Series (provided, however, that the Holders
of a majority in principal amount of the outstanding Securities of any Series
may rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
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Section 6.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
ARTICLE VII.
TRUSTEE
Section 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others.
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon Officers' Certificates or Opinions of Counsel
furnished to the Trustee and conforming to the requirements of
this Indenture; HOWEVER, in the case of any such Officers'
Certificates or Opinions of Counsel which by any provisions
hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates
and Opinions of Counsel to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
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(i) This paragraph does not limit the effect of
paragraph (b) of this Section.
(ii) The Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect
to any action taken, suffered or omitted to be taken by it
with respect to Securities of any Series in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the outstanding Securities of such Series
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 with respect to the Securities of such
Series.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraph (a), (b) and (c) of this
Section.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory
to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with
the Company. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to risk its own funds or otherwise incur any financial
liability in the performance of any of its duties, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any
authenticating agent shall be entitled to the protections, immunities
and standard of care as are set forth in paragraphs (a), (b) and (c) of
this Section with respect to the Trustee.
Section 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on and shall be protected in
acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care. No Depository shall be deemed an agent of the Trustee
and the Trustee shall not be responsible for any act or omission by any
Depository.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized
or within its rights or powers.
(e) The Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
Section 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.
Section 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Securityholder of the
Securities of that Series and, if any Bearer Securities are
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outstanding, publish on one occasion in an Authorized Newspaper, notice of a
Default or Event of Default within 90 days after it occurs or, if later, after a
Responsible Officer of the Trustee has knowledge of such Default or Event of
Default. Except in the case of a Default or Event of Default in payment of
principal of or interest on any Security of any Series, the Trustee may withhold
the notice if and so long as its corporate trust committee or a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Securityholders of that Series.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after May 15 in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the register kept by the Registrar and, if any Bearer Securities are
outstanding, publish in an Authorized Newspaper, a brief report dated as of such
May 15, in accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed. The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through negligence or
bad faith.
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To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities of any Series on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one
or more Series by so notifying the Company. The Holders of a majority in
principal amount of the Securities of any Series may remove the Trustee with
respect to that Series by so notifying the Trustee and the Company. The Company
may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee with respect to the Securities of any
one or more Series does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of at least 10% in principal amount of the Securities of the applicable Series
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee with respect to the Securities of any one or
more Series fails to comply with Section 7.10, any Securityholder of the
applicable Series may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always
have a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Order cease to be of further
effect (except as hereinafter provided in this Section 8.1), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and
delivered (other than Securities that have been destroyed,
lost or stolen and that have been replaced or paid) have been
delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore
delivered to the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at
their Stated Maturity within one year, or
(3) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Company, or
(4) are deemed paid and discharged
pursuant to Section 8.3, as applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.7, and,
if money shall have been deposited with the Trustee pursuant to clause (a) of
this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5 shall
survive.
Section 8.2. APPLICATION OF TRUST FUNDS; INDEMNIFICATION.
(a) Subject to the provisions of Section 8.5, all money
deposited with the Trustee pursuant to Section 8.1, all money and U.S.
Government Obligations or Foreign Government Obligations deposited with
the Trustee pursuant to Section 8.3 or 8.4 and all money received by
the Trustee in respect of U.S. Government Obligations or Foreign
Government Obligations deposited with the Trustee pursuant to Section
8.3 or 8.4, shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine,
to the persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with or received by the
Trustee or to make mandatory sinking fund payments or analogous
payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against
U.S. Government Obligations or Foreign Government Obligations deposited
pursuant to Sections 8.3 or 8.4 or the interest and principal received
in respect of such obligations other than any payable by or on behalf
of Holders.
(c) The Trustee shall deliver or pay to the Company from
time to time upon Company Request any U.S. Government Obligations or
Foreign Government Obligations or money held by it as provided in
Sections 8.3 or 8.4 which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited
for the purpose for which such U.S. Government Obligations or Foreign
Government Obligations or money were deposited or received. This
provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations or Foreign Government Obligations held under
this Indenture.
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Section 8.3. LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.
Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.20, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall no
longer be in effect (and the Trustee, at the expense of the Company, shall, at
Company Request, execute proper instruments acknowledging the same), except as
to:
(a) the rights of Holders of Securities of such Series to
receive, from the trust funds described in subparagraph (d) hereof, (i)
payment of the principal of and each installment of principal of and
interest on the outstanding Securities of such Series on the Stated
Maturity of such principal or installment of principal or interest and
(ii) the benefit of any mandatory sinking fund payments applicable to
the Securities of such Series on the day on which such payments are due
and payable in accordance with the terms of this Indenture and the
Securities of such Series;
(b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3
and 8.5; and
(c) the rights, powers, trust and immunities of the
Trustee hereunder;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be
deposited irrevocably with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as
security for and dedicated solely to the benefit of the Holders of such
Securities (i) in the case of Securities of such Series denominated in
Dollars, cash in Dollars (or such other money or currencies as shall
then be legal tender in the United States) and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series
denominated in a Foreign Currency (other than a composite currency),
money and/or Foreign Government Obligations, which through the payment
of interest and principal in respect thereof, in accordance with their
terms, will provide (and without reinvestment and assuming no tax
liability will be imposed on such Trustee), not later than one day
before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment
of principal (including mandatory sinking fund or analogous payments)
of and interest, if any, on all the Securities of such Series on the
dates such installments of interest or principal are due;
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(e) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(f) no Default or Event of Default with respect to the
Securities of such Series shall have occurred and be continuing on the
date of such deposit or during the period ending on the 91st day after
such date;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
Securities of such Series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount
and in the same manner and at the same times as would have been the
case if such deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of the Securities of
such Series over any other creditors of the company or with the intent
of defeating, hindering, delaying or defrauding any other creditors of
the Company;
(i) such deposit shall not result in the trust arising
from such deposit constituting an investment company (as defined in the
Investment Company Act of 1940, as amended), or such trust shall be
qualified under such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this Section have been complied with.
Section 8.4. COVENANT DEFEASANCE.
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional
covenants contained in a supplemental indenture hereto for a particular Series
of Securities or a Board Resolution or an Officers' Certificate delivered
pursuant to Section 2.2.20 (and the failure to comply with any such covenants
shall not constitute a Default or Event of
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Default under Section 6.1) and the occurrence of any event described in
clause (e) of Section 6.1 shall not constitute a Default or Event of Default
hereunder, with respect to the Securities of such Series, provided that the
following conditions shall have been satisfied:
(a) With reference to this Section 8.4, the Company has
deposited or caused to be irrevocably deposited (except as provided in
Section 8.2(c)) with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities (i) in the case of Securities of such Series
denominated in Dollars, cash in Dollars (or such other money or
currencies as shall then be legal tender in the United States) and/or
U.S. Government Obligations, or (ii) in the case of Securities of such
Series denominated in a Foreign Currency (other than a composite
currency), money and/or Foreign Government Obligations, which through
the payment of interest and principal in respect thereof, in accordance
with their terms, will provide (and without reinvestment and assuming
no tax liability will be imposed on such Trustee), not later than one
day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, to pay principal and
interest, if any, on and any mandatory sinking fund in respect of the
Securities of such Series on the dates such installments of interest or
principal are due;
(b) Such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(c) No Default or Event of Default with respect to the
Securities of such Series shall have occurred and be continuing on the
date of such deposit or during the period ending on the 91st day after
such date;
(d) the Company shall have delivered to the Trustee an
Opinion of Counsel confirming that Holders of the Securities of such
Series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such deposit and
defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an
Officers' Certificate stating the deposit was not made by the Company
with the intent of preferring the Holders of the Securities of such
Series over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the
Company; and
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(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the defeasance
contemplated by this Section have been complied with.
Section 8.5. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
ARTICLE IX.
AMENDMENTS AND WAIVERS
Section 9.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(d) to make any change that does not adversely affect the
rights of any Securityholder;
(e) to provide for the issuance of and establish the form
and terms and conditions of Securities of any Series as permitted by
this Indenture;
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more Series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee; or
(g) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA.
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Section 9.2. WITH CONSENT OF HOLDERS.
The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Section 9.3. LIMITATIONS.
Without the consent of each Securityholder affected, an
amendment or waiver may not:
(a) change the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of
interest (including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of
any Security or reduce the amount of, or postpone the date fixed for,
the payment of any sinking fund or analogous obligation;
(d) reduce the principal amount of Discount Securities
payable upon acceleration of the maturity thereof;
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(e) waive a Default or Event of Default in the payment of
the principal of or interest, if any, on any Security (except a
rescission of acceleration of the Securities of any Series by the
Holders of at least a majority in principal amount of the outstanding
Securities of such Series and a waiver of the payment default that
resulted from such acceleration);
(f) make the principal of or interest, if any, on any
Security payable in any currency other than that stated in the
Security;
(g) make any change in Sections 6.8, 6.13, 9.3 (this
sentence), 10.15 or 10.16; or
(h) waive a redemption payment with respect to any
Security or change any of the provisions with respect to the redemption
of any Securities.
Section 9.4. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities of one or
more Series shall be set forth in a supplemental indenture hereto that complies
with the TIA as then in effect.
Section 9.5. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to
it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment or waiver becomes
effective.
Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
Section 9.6. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any Series thereafter authenticated. The
Company in exchange for Securities of that Series may issue and the Trustee
shall authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
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Section 9.7. TRUSTEE PROTECTED.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee shall sign
all supplemental indentures, except that the Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
Section 10.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. NOTICES.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail:
if to the Company:
Sunrise Medical, Inc.
2382 Faraday Avenue, Suite 200
Carlsbad, California, 92008
Attention: Steven A. Jaye
if to the Trustee:
[Name of Trustee]
[Address]
------------------------------
------------------------------
Attention:
--------------------
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Securityholder shall be
mailed by first-class mail to his address shown on the register kept by the
Registrar and, if any Bearer Securities are
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outstanding, published in an Authorized Newspaper. Failure to mail a notice
or communication to a Securityholder of any Series or any defect in it shall
not affect its sufficiency with respect to other Securityholders of that or
any other Series.
If a notice or communication is mailed or published in the
manner provided above, within the time prescribed, it is duly given, whether or
not the Securityholder receives it.
If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.
Section 10.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders of any Series may communicate pursuant to TIA
Section 312(b) with other Securityholders of that Series or any other Series
with respect to their rights under this Indenture or the Securities of that
Series or all Series. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
Section 10.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section 10.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(c) 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
(d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
Section 10.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders of one or more Series. Any Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 10.7. LEGAL HOLIDAYS.
Unless otherwise provided by Board Resolution, Officers'
Certificate or supplemental indenture for a particular Series, a "Legal Holiday"
is any day that is not a Business Day. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
Section 10.8. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
Section 10.9. COUNTERPARTS.
This Indenture may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.10. GOVERNING LAWS.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
45
<PAGE>
Section 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
Section 10.12. SUCCESSORS.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 10.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, 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.
Section 10.15. SECURITIES IN A FOREIGN CURRENCY OR IN ECU.
Unless otherwise specified in a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate delivered pursuant to
Section 2.2 of this Indenture with respect to a particular Series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders
of a specified percentage in aggregate principal amount of Securities of all
Series or all Series affected by a particular action at the time outstanding
and, at such time, there are outstanding Securities of any Series which are
denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such Series which shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate at
such time. For purposes of this Section 10.15, "Market Exchange Rate" shall mean
the noon Dollar buying rate in New York City for cable transfers of that
currency as published by the Federal Reserve Bank of New York; PROVIDED,
HOWEVER, in the case of ECUs, Market Exchange Rate shall mean the rate of
exchange determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate
46
<PAGE>
of exchange as published in the Journal, as of the most recent available
date, or quotations or, in the case of ECUs, rates of exchange from one or
more major banks in The City of New York or in the country of issue of the
currency in question or, in the case of ECUs, in Luxembourg or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee, upon
consultation with the Company, shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in
respect of Securities of a Series denominated in currency other than Dollars
in connection with any action taken by Holders of Securities pursuant to the
terms of this Indenture.
All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Company and all Holders.
Section 10.16. JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of obtaining
judgment in any court it is necessary to convert the sum due in respect of the
principal of or interest or other amount on the Securities of any Series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the New York
Banking Day preceding the day on which final unappealable judgment is entered
and (b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full amount
of the Required Currency so expressed to be payable, and (iii) shall not be
affected by judgment being obtained for any other sum due under this Indenture.
For purposes of the foregoing, "New York Banking Day" means any day except a
Saturday, Sunday or a legal holiday in The City of New York on which banking
institutions are authorized or required by law, regulation or executive order to
close.
47
<PAGE>
ARTICLE XI.
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of a Series, except as
otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of any Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of the
delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, PROVIDED, HOWEVER, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee
48
<PAGE>
of Securities of that Series purchased by the Company having an unpaid
principal amount equal to the cash payment required to be released to the
Company.
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
49
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
Sunrise Medical, Inc.
By:
------------------------------
Name:
Its:
[Name of Trustee]
By:
------------------------------
Name:
Its:
<PAGE>
EXHIBIT 5.1
[Latham & Watkins Letterhead]
October 26, 1999
Sunrise Medical, Inc.
2382 Faraday Avenue, Suite 200
Carlsbad, CA 92008
Re: $25,000,000 AGGREGATE OFFERING
PRICE OF SECURITIES OF SUNRISE MEDICAL, INC.
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 filed on
October 26, 1999 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), you have requested our opinion with respect
to the matters set forth below.
You have provided us with a draft prospectus (the "Prospectus")
which is a part of the Registration Statement. The Prospectus provides that
it will be supplemented in the future by one or more supplements to the
Prospectus (each a "Prospectus Supplement"). The Prospectus as supplemented
by various Prospectus Supplements will provide for the issuance and sale by
Sunrise Medical, Inc., a Delaware corporation (the "Company"), of up to
$25,000,000 aggregate offering price of (i) one or more series of debt
securities (the "Debt Securities"), (ii) shares of preferred stock, par value
$1.00 per share (the "Preferred Stock"), (iii) shares of common stock, par
value $1.00 per share (the "Common Stock") and (iv) subscription rights to
purchase Common Stock ("Subscription Rights"). The Debt Securities, Preferred
Stock, Common Stock and Subscription Rights are collectively referred to
herein as the "Securities." Any Debt Securities may be exchangeable for or
convertible into shares of Common Stock or Preferred Stock. The Preferred
Stock may also be exchangeable for or convertible into shares of Common
Stock. The Debt Securities will be issued pursuant to one or more indentures
and one or more supplements thereto (collectively, the "Indentures"), in each
case between the Company and a trustee (each, a "Trustee").
In our capacity as your special counsel in connection with the
Registration Statement, we are generally familiar with the proceedings taken
and proposed to be taken by the Company in connection with the authorization
and issuance of the Securities. For purposes of this opinion, we have assumed
that such proceedings will be timely and properly completed, in accordance
with all requirements of applicable federal, Delaware and New York laws, in
the manner presently proposed.
We have made such legal and factual examinations and inquiries,
including an examination of originals and copies certified or otherwise
identified to our satisfaction, of all such documents, corporate records and
instruments of the Company as we have deemed necessary or appropriate for
purposes of this opinion. In our examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to authentic original documents of all
documents submitted to us as copies.
We have been furnished with, and with your consent have exclusively
relied upon, certificates of officers of the Company with respect to certain
factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
<PAGE>
We are opining herein as to the effect on the subject transaction
only of the federal securities laws of the United States, the General
Corporation Law of the State of Delaware, including statutory and reported
decisional law thereunder, and with respect to the opinion set forth in
paragraph 1 below, the internal laws of the State of New York, and we express
no opinion with respect to the applicability thereto, or the effect thereon,
of the laws of any other jurisdiction or, in the case of Delaware, any other
laws, or as to any matters of municipal law or the laws of any local agencies
within any state.
Subject to the foregoing and the other qualifications set forth
herein, it is our opinion that, as of the date hereof:
1. When (a) the Debt Securities have been duly established in
accordance with the terms of the applicable Indenture (including, without
limitation, the adoption by the Board of Directors of the Company of a
resolution duly authorizing the issuance and delivery of the Debt
Securities), duly authenticated by the Trustee and duly executed and
delivered on behalf of the Company against payment therefor in accordance
with the terms and provisions of the applicable Indenture and as contemplated
by the Registration Statement, the Prospectus and the related Prospectus
Supplement(s), and (b) when the Registration Statement and any required
post-effective amendment thereto have all become effective under the
Securities Act, and (c) assuming that the terms of the Debt Securities as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that
the Debt Securities as executed and delivered do not violate any law
applicable to the Company or result in a default under or breach of any
agreement or instrument binding upon the Company, and (e) assuming that the
Debt Securities as executed and delivered comply with all requirements and
restrictions, if any, applicable to the Company, whether or not imposed by
any court or governmental or regulatory body having jurisdiction over the
Company, and (f) assuming that the Debt Securities are then issued and sold
as contemplated in the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), the Debt Securities will constitute valid and
legally binding obligations of the Company, enforceable against the Company
in accordance with the terms of the Debt Securities.
2. Upon adoption by the Board of Directors of the Company of a
resolution in form and content as required by applicable law authorizing,
among other things, the issuance and sale of authorized but unissued shares
of Common Stock, and upon issuance and delivery of and payment for such
shares in the manner contemplated by the Registration Statement, the
Prospectus and the related Prospectus Supplement(s) and by such resolution,
such shares of Common Stock (including any Common Stock duly issued upon the
exchange or conversion of Debt Securities or Preferred Stock that are
exchangeable for or convertible into Common Stock) will be validly issued,
fully paid and nonassessable.
3. When a series of Preferred Stock has been duly established in
accordance with the terms of the Certificate of Incorporation and applicable
law, and upon adoption by the Board of Directors of the Company of a
resolution in form and content as required by applicable law, authorizing,
among other things, the issuance and sale of that series of authorized but
unissued shares of Preferred Stock, and upon issuance and delivery of and
payment for such shares in the manner contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and by
such resolution, such shares of such series of Preferred Stock (including any
Preferred Stock duly issued (i) upon the exchange or conversion of any shares
of Preferred Stock that are exchangeable for or convertible into another
series of Preferred Stock and (ii) upon the exchange or conversion of Debt
Securities that are exchangeable for or convertible into Preferred Stock)
will be validly issued, fully paid and nonassessable.
4. When (a) the specific terms of a Subscription Right have been
duly established and a certificate bearing such terms (the "Subscription
Right Certificate") has been duly executed and delivered by or on behalf of
the Company as contemplated in the Registration Statement, the Prospectus and
the related Prospectus Supplement(s), and (b) when the Registration Statement
and any required post-effective amendments thereto have all become effective
under the Securities Act, and (c) assuming that the terms of the Subscription
Right as set forth in the Subscription Right Certificate are as described in
the Registration Statement, the Prospectus and the related Prospectus
Supplement(s), and (d) assuming that the Subscription Right as set forth in
the Subscription Right Certificate does not violate any law applicable to the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company, and (e) assuming that the Subscription Right as set
forth in the Subscription Right Certificate complies with all requirements
and restrictions, if any, applicable to the Company,
<PAGE>
whether imposed by any court or governmental or regulatory body having
jurisdiction over the Company and (f) assuming that the Subscription Right is
then issued as contemplated in the Registration Statement, the Prospectus and
the related Prospectus Supplement(s), the Subscription Rights will be validly
issued.
The opinion set forth in paragraph 1 above is subject to the
following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, including without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which any proceeding
therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of, or contribution to, a party with respect to a liability
where such indemnification or contribution is contrary to public policy; (iv)
we express no opinion concerning the enforceability of any waiver of rights
or defenses with respect to stay, extension or usury laws; and (v) we express
no opinion with respect to whether acceleration of Debt Securities may affect
the collectibility of any portion of the stated principal amount thereof
which might be determined to constitute unearned interest thereon.
To the extent the obligations of the Company under an Indenture may
be dependent upon such matters, we assume for purposes of this opinion that
the Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware and has the corporate
power and authority to issue and sell the Securities; that the applicable
Indenture has been duly authorized by all necessary corporate action by the
Company, has been duly executed and delivered by the Company and constitutes
the legally valid, binding and enforceable obligation of the Company
enforceable against the Company in accordance with its terms; that the
Trustee for each Indenture is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Trustee
is duly qualified to engage in the activities contemplated by the applicable
Indenture; that the applicable Indenture has been duly authorized, executed
and delivered by the Trustee and constitutes a legally valid, binding and
enforceable obligation of the Trustee, enforceable against the Trustee in
accordance with its terms; that the Trustee is in compliance, generally and
with respect to acting as Trustee under the applicable Indenture, with all
applicable laws and regulations; that the Trustee has the requisite
organizational and legal power and authority to perform its obligations under
the applicable Indenture.
To the extent that the obligations of the Company under a
Subscription Right may be dependent upon such matters, we assume for purposes
of this opinion that the Company has been duly organized and is validly
existing under applicable state law, and has the corporate power and
authority to issue and sell the Subscription Rights; that the applicable
Subscription Right has been duly authorized by all necessary corporate action
by the Company, that the applicable Subscription Right Certificates have been
duly executed and delivered by the Company and constitute the legally valid,
binding and enforceable obligations of the Company enforceable against the
Company in accordance with their terms.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus included therein.
Very truly yours,
/s/ Latham & Watkins
<PAGE>
EXHIBIT 12.1
SUNRISE MEDICAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
Years Ended
----------------------------------------------------------------------
July 2, July 3, June 27, June 28, June 30,
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Fixed charges:
Interest expense 16,486 15,222 14,774 16,687 10,366
Approximate portion of rental expense
deemed to be representative of interest 1,252 1,190 1,060 980 843
Amortization of debt expense 231 184 41 98 46
-------- -------- -------- -------- --------
Total fixed charges 17,969 16,596 15,875 17,765 11,255
Net earnings (loss) 4,498 (12,010) 12,114 (40,378) 19,956
Provision for income taxes 3,771 208 11,363 (11,371) 14,630
-------- -------- -------- -------- --------
Earnings (loss) before income taxes
and fixed charges 26,238 4,794 39,352 (33,984) 45,841
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Ratio of earnings to fixed charges 1.5 - 2.5 - 4.1
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
For the years ended 1998 and 1996, earnings were insufficient to cover fixed
charges in the amounts of $11,802,000 and $51,749,000, respectively.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sunrise Medical, Inc.
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
San Diego, California
October 25, 1999
