<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1996
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ROTECH MEDICAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-2115892
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4506 L. B. MCLEOD ROAD, SUITE F, ORLANDO, FLORIDA 32811
(407) 841-2115
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
WILLIAM P. KENNEDY, CHIEF EXECUTIVE OFFICER
ROTECH MEDICAL CORPORATION
4506 L. B. MCLEOD ROAD, SUITE F, ORLANDO, FLORIDA 32811
(407) 841-2115
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF COMMUNICATIONS TO:
THOMAS A. SIMSER, JR.
WINDERWEEDLE, HAINES, WARD & WOODMAN, P.A.
390 NORTH ORANGE AVENUE, SUITE 1490
ORLANDO, FLORIDA 32801
(407)423-4246
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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 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
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
5 1/4% Convertible
Subordinated Debentures
Due 2003.............. $110,000,000 100% $110,000,000 $37,931.03
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Common Stock, $0.0002
par value per share... 4,190,476(1)(2) -- -- -- (3)
</TABLE>
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(1) Based on a conversion price of $26.25 per share, includes shares of Common
Stock initially issuable upon conversion of the Debentures being
registered hereunder.
(2) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the Debentures being registered hereunder by means of
adjustment in the conversion price.
(3) Pursuant to Rule 457(i), there is no filing fee with respect to the shares
of Common Stock issuable upon conversion of the Debentures because no
additional consideration will be received in connection with the exercise
of the conversion privilege.
---------------
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 (A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED AUGUST 27, 1996
PROSPECTUS
ROTECH MEDICAL CORPORATION
$110,000,000 PRINCIPAL AMOUNT OF 5 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE
2003
(INTEREST PAYABLE JUNE 1 AND DECEMBER 1)
4,190,476 SHARES OF COMMON STOCK
----------
This Prospectus relates to (i) $110,000,000 aggregate principal amount of 5
1/4% Convertible Subordinated Debentures due 2003 (the "Debentures") of RoTech
Medical Corporation, a Florida corporation ("RoTech" or the "Company") and
4,190,476 shares of the Common Stock, par value $.0002 per share (the "Common
Stock"), of the Company which are initially issuable upon conversion of the
Debentures plus such additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Debentures as a result of
adjustments to the conversion price (the "Conversion Shares"). The Debentures
and the Conversion Shares that are being registered hereby are to be offered
for the account of the holders thereof (the "Selling Securityholders"). The
Debentures were acquired from the Company by Smith Barney Inc., Needham &
Company, Inc. and Wheat, First Securities, Inc. (the "Initial Purchasers") in
May 1996 in connection with a private offering (the "Debenture Offering"). See
"Description of Debentures."
The Debentures are convertible into Common Stock of the Company at any time
after the 60th day following the date of original issuance of the Debentures
and at or before maturity, unless previously redeemed, at a conversion price of
$26.25 per share, subject to adjustment in certain events. The Common Stock of
the Company is traded on The Nasdaq National Market under the symbol ROTC. On
August 26, 1996, the closing price of the Common Stock as reported by Nasdaq
was $16 per share.
The Debentures do not provide for a sinking fund and are not redeemable by
the Company prior to June 4, 1999. The Debentures are redeemable at the option
of the Company, in whole or in part, at the redemption prices set forth in this
Prospectus, together with accrued interest. Upon a Repurchase Event (as defined
herein), each holder of Debentures shall have the right, at the holder's
option, to require the Company to repurchase such holder's Debentures at a
purchase price equal to 100% of the principal amount thereof, plus accrued
interest. See "Description of Debentures--Certain Rights to Require Repurchase
of Debentures."
The Debentures are unsecured obligations of the Company and are subordinate
to all present and future Senior Indebtedness (as defined herein) of the
Company and will be effectively subordinated to all indebtedness and
liabilities of subsidiaries of the Company. As of August 20, 1996, Senior
Indebtedness was approximately $53.2 million. The Indenture does not restrict
the incurrence of any other indebtedness or liabilities by the Company or its
subsidiaries. See "Description of Debentures--Subordination."
The Debentures have been designated for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market. For a
description of certain income tax consequences to holders of the Debentures,
see "Certain United States Federal Income Tax Consequences."
The Initial Purchasers have advised the Company that they intend to make a
market in the Debentures. The Initial Purchasers, however, are not obligated to
do so and any such market making may be discontinued at any time without
notice, in the sole discretion of the Initial Purchasers. No assurances can be
given that any market for the Debentures will develop or be maintained.
The Debentures and the Conversion Shares are being registered to permit
public secondary trading of the Debentures and, upon conversion, the underlying
Common Stock, by the holders thereof from time to time after the date of this
Prospectus. The Company has agreed, among other things, to bear all expenses
(other than underwriting discounts, selling commissions and the fees and
expenses of counsel and other advisors to the holders of the Debentures or the
underlying Common Stock) in connection with the registration and sale of the
Debentures and the underlying Common Stock covered by this Prospectus.
The Company will not receive any of the proceeds from the sales of the
Debentures or the Conversion Shares by the Selling Securityholders. The
Debentures and the Conversion Shares may be offered in negotiated transactions
or otherwise, at market prices prevailing at the time of sale or at negotiated
prices. In addition, the Conversion Shares may be offered from time to time
through ordinary brokerage transactions on The Nasdaq National Market. See
"Plan of Distribution." The Selling Securityholders may be deemed to be
"Underwriters" as defined in the Securities Act of 1933, as amended (the
"Securities Act"). If any broker-dealers are used by the Selling
Securityholders, any commissions paid to broker-dealers and, if broker-dealers
purchase any Debentures or Conversion Shares as principals, any profits
received by such broker-dealers on the resale of the Debentures or Conversion
Shares may be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling
Securityholders may be deemed to be underwriting commissions.
SEE "RISK FACTORS" FOR A DESCRIPTION OF CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August , 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Securities and Exchange commission (the "Commission"). Such reports and
other information filed by the Company with the Commission in accordance with
the Exchange Act may be inspected, without charge, at the Public Reference
Section of the Commission located at 450 Fifth Street, N.W., Washington, D.C.
20549 and at the following regional offices of the Commission: New York
Regional Office at 7 World Trade Center, 13th Floor, New York, New York 10048;
and Chicago Regional Office at Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of all or any portion of the material may be
obtained from the Public Reference Section of the Commission upon payment of
the prescribed fees. Such materials can also be inspected at the offices of
Nasdaq Operations, 1735 K Street, N.W. Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (such registration statement, together with all amendments and exhibits
thereto, being hereinafter referred to as the "Registration Statement") under
the Securities Act for the registration under the Securities Act of the
Debentures and Conversion Shares offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement for further information with respect to the Company and the
securities offered hereby. Statements contained herein concerning the
provisions of documents filed as exhibits to the Registration Statement are
necessarily summaries of such documents, and each such statement is qualified
in its entirety by reference to the copy of the applicable document filed with
the Commission. Copies of the Registration Statement and the exhibits may be
inspected, without charge, at the offices of the Commission, or obtained at
prescribed rates from the Public Reference Section of the Commission at the
address set forth above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus
and made a part hereof: (1) Annual Report on Form 10-K for fiscal year ended
July 31, 1995; (2) Quarterly Report on Form 10-Q for the quarter ended October
31, 1995; (3) Quarterly Report on Form 10-Q/A for the quarter ended January
31, 1996; (4) Current Report on Form 8-K as filed with the Commission on
November 15, 1995; (5) Current Report on Form 8-KA as filed with the
Commission on January 11, 1996; (6) Current Report on Form 8-K as filed with
the Commission on April 1, 1996; (7) Report on Form 10-C as filed with the
Commission on May 9, 1996; (8) Current Report on Form 8-K as filed with the
Commission on May 17, 1996; (9) Form S-8 as filed with the Commission on May
17, 1996; (10) Quarterly Report on Form 10-Q/A for the quarter ended April 30,
1996; (11) Current Report on Form 8-K/A as filed with the Commission on June
4, 1996; and (12) Current Report on Form 8-K as filed with the Commission on
August 20, 1996. Certain portions of the above-referenced documents have been
modified or superseded by the information contained herein. In addition, all
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date hereof and prior to the time of the
termination of the offering are hereby deemed to be incorporated by reference.
Any statements contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modfied or
superseded, to constitute a part of this Prospectus. Any person receiving a
copy of this Prospectus may obtain without charge, upon written request or
oral request, a copy of any of the documents incorporated by reference herein,
except for the exhibits to such documents (unless such exhibits are
specifically incorporated by reference into the documents which
this Prospectus incorporates). Written or telephone requests for such copies
should be directed to RoTech Medical Corporation, P.O. Box 536576, Orlando,
Florida 32853-6576, Attention: Rebecca R. Irish, telephone (407) 841-2115.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in its
entirety by the more detailed information and financial statements and related
notes included in and incorporated by reference in this Prospectus. See "Risk
Factors" for a discussion of certain factors to be considered by prospective
investors. Unless otherwise indicated, the information in this Prospectus gives
effect to a 2-for-1 stock split paid on May 21, 1996 in the form of a stock
dividend to holders of record on April 30, 1996.
THE COMPANY
RoTech Medical Corporation ("RoTech" or the "Company") provides comprehensive
home health care and primary care physician services, principally to patients
in non-urban areas. As of August 20, 1996, RoTech operated 366 home health care
locations and 24 primary care physician practices, employing 29 physicians. The
Company's home health care business provides a diversified range of products
and services, with emphasis on respiratory and home infusion therapies. RoTech
has pursued an aggressive acquisition strategy since 1988 which included in
fiscal 1996 acquisitions of 145 locations of smaller home health care companies
and the opening of 20 new locations. Current industry estimates indicate that
approximately half of the nation's home health care industry remains fragmented
and is run by either single operators or small, local chains. These smaller
providers are RoTech's main competition and main acquisition opportunities. The
Company plans to continue to enter new home health care markets through
acquisition or start-up as competitive and pricing pressures encourage
consolidation and economies of scale. In January 1994, the Company expanded
this strategy to include the acquisition of primary care physician practices in
certain markets to enable the ultimate development of an integrated primary
health care delivery system capable of providing a broad range of non-
institutional care to patients in these markets. The Company believes this
system will facilitate managed care concepts and pricing in these markets,
where managed care currently has little penetration, and should prevent the
outmigration of the non-urban population to urban health care facilities and
service providers. The Company's revenues have grown from $26 million for the
fiscal year ended July 31, 1991 to $134 million for the fiscal year ended July
31, 1995 and to $180 million for the nine months ended April 30, 1996.
The Company's principal executive offices are located at 4506 L.B. McLeod
Road, Suite F, Orlando, Florida 32811; its telephone number is (407) 841-2115.
The Company conducts its business through operating subsidiaries and, unless
the context requires otherwise, the terms "RoTech" and "Company" refer to
RoTech Medical Corporation and its operating subsidiaries.
3
<PAGE>
THE OFFERING
SECURITIES OFFERED........ $110,000,000 aggregate principal amount of 5
1/4% Convertible Subordinated Debentures due
2003 (the "Debentures") and 4,190,476 shares of
the Common Stock, par value $.0002 per share
(the "Common Stock") which are initially
issuable upon conversion of the Debentures (the
"Conversion Shares")
PAYMENT OF INTEREST....... June 1 and December 1, commencing December 1,
1996.
CONVERSION................ The Debentures are convertible into Common
Stock of the Company at the option of the
holder at any time after the 60th day following
the date of original issuance of the Debentures
and at or before maturity, unless previously
redeemed, at $26.25 per share, subject to
adjustment upon the occurrence of certain
events.
SUBORDINATION............. The Debentures are subordinated to all present
and future Senior Indebtedness (as defined
herein) of the Company and effectively
subordinated to all indebtedness and other
liabilities of subsidiaries of the Company.
Senior Indebtedness of the Company and
indebtedness and other liabilities of its
subsidiaries aggregated approximately $53.2
million at August 20, 1996. The Indenture
contains no limitation on the incurrence of
indebtedness (including Senior Indebtedness) or
other liabilities by the Company and its
subsidiaries.
REDEMPTION................ The Debentures are redeemable in whole or in
part, at the option of the Company, at the
redemption prices set forth herein, together
with accrued interest, except that no
redemption may be made prior to June 4, 1999.
REDEMPTION AT HOLDER'S In the event that there shall occur a
OPTION.................... Repurchase Event (as defined herein), each
holder of the Debentures shall have the right,
at the holder's option, to require the Company
to repurchase such holder's Debentures at 100%
of their principal amount, plus accrued
interest. The term Repurchase Event is limited
to transactions involving a Change in Control
(as defined herein) or a Termination of Trading
(as defined herein), and does not include other
events that might adversely affect the
financial condition of the Company or result in
a downgrade in the credit rating (if any) of
the Debentures. The Company's ability to
repurchase the Debentures following a
Repurchase Event is dependent upon the
Company's having sufficient funds and may be
limited by the terms of the Company's Senior
Indebtedness or the subordination provisions of
the Indenture. There is no assurance that the
Company will be able to repurchase the
Debentures upon the occurrence of a Repurchase
Event.
USE OF PROCEEDS........... The Company will not receive any of the
proceeds from the sale of any of the Debentures
or the Common Stock issuable upon conversion
thereof.
----------------
Prospective investors are cautioned that the statements in this Prospectus
that are not descriptions of historical facts may be forward-looking
statements. Such statements reflect management's current views, are based on
many assumptions and are subject to risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a number of
factors.
4
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus and in the
documents incorporated herein by reference, prospective purchasers of the
Debentures and the Conversion Shares should carefully consider the factors set
forth below before purchasing the Debentures and Conversion Shares offered
hereby.
REIMBURSEMENT FOR SERVICES
A substantial percentage of RoTech's revenue is attributable to third-party
payors, including private insurers, Medicare and, to a lesser extent,
Medicaid. The Company has substantial expertise at processing claims and
continues to create and improve systems to manage third-party reimbursements,
to produce clean claims and obtain timely reimbursements by third-party
payors. The Company has developed distinct billing and collection departments
for Medicare and Medicaid reimbursements and for private insurance company
claims which are supported by customized computer systems. These departments
work closely with reimbursement officers at branch locations and third-party
payors and are responsible for the review of patient coverage, the adequacy
and timeliness of documentation and the follow-up with third-party payors to
expedite reimbursement payments. Reimbursement from the Medicare program as a
percentage of RoTech's total operating revenue approximated 36% for fiscal
1992, 39% for fiscal 1993, 35% for fiscal 1994, 49% for fiscal 1995, and 49%
for the nine months ended April 30, 1996.
RoTech has achieved increased operating revenue in home respiratory and
other medical equipment operations despite increased regulation and
corresponding reimbursement reductions. While the increased regulation tends
to reduce the amount of reimbursement from government sources for individual
cases, the Company believes the continued increased regulation also benefits
the Company by reducing the competition from joint ventures and fee revenue
sharing arrangements, which the Company has historically avoided.
The levels of operating revenue and profitability of the Company, like those
of other health care companies, are affected by the continuing efforts of
third-party payors to contain or reduce the costs of health care by lowering
reimbursement rates, increasing case management review of services and
negotiating reduced contract pricing. Home health care, which is generally
less costly to third-party payors than hospital-based care, has benefitted
from those cost containment objectives. However, as expenditures in the home
health care market continue to grow, initiatives aimed at reducing the costs
of health care delivery at non-hospital sites are increasing. Changes in
reimbursement policies by third-party payors, or the reduction in or
elimination of such reimbursement programs, could have a material adverse
impact on the Company's revenues. Various state and federal health reform
initiatives may lead to additional changes in reimbursement programs.
GOVERNMENT REGULATION
The home care industry is subject to extensive government regulation at the
federal level through the Medicare program and at the state level through the
Medicaid program. Medicare is a federally funded health insurance program
which provides health insurance coverage for persons age 65 and older and
certain disabled persons, and generally provides reimbursement at specified
rates for sales and rentals of specified medical equipment and supplies,
provided such equipment and supplies are determined to be medically necessary
by the treating physician. Medicaid is a health insurance program administered
by state governments which provides reimbursements for health care for certain
financially or medically needy persons regardless of age.
The Company is subject to government audits of its Medicare and Medicaid
reimbursement claims and has not, to date, experienced any material loss as a
result of any such government audits. Under existing federal law, the knowing
and willful offer or payment of any remuneration (including any kickback,
bribe or rebate) of any kind to another person to induce the referral of
Medicare or Medicaid beneficiaries for whom medical supplies and services may
be reimbursed by the Medicare or Medicaid programs is prohibited and could
subject the parties to such an arrangement to substantial criminal and civil
penalties, including exclusion from participation in these programs, for
Medicare or Medicaid fraud. The Office of Inspector General of the Department
of Health
5
<PAGE>
and Human Services ("OIG") has promulgated regulatory "safe harbors" that
describe certain practices and business arrangements that comply with Medicare
and Medicaid regulations. The OIG and law enforcement authorities have
recently increased their investigatory efforts to determine whether various
business practices constitute remuneration for, or to induce, referrals.
Certain states have also passed statutes and regulations that prohibit
payments for referral of patients. These laws vary significantly from state to
state. The result of legislative and regulatory efforts is an extra compliance
challenge and, therefore, risk. The Company has been aware that the OIG has
made certain informal inquiries related to payments received by the Company in
the late 1980's. The OIG submitted its findings to the United States Attorney
for the Middle District of Florida, which elected in May, 1995, to file a
civil suit, Case No. 95-558-CIV-ORL-18, in which it contends that Medicare
made some unspecified amount of payments to the Company by mistake in part of
1987, in 1988, and in 1989. The civil suit seeks repayment of the monies
allegedly paid by mistake. While the Company is confident that it was at all
times in compliance with all material Medicare requirements, and believes that
all payments it received were made correctly and not by mistake, the Company
seeks an amicable resolution of the issues involved in the civil suit in order
to save time and potential litigation expenses. However, if the matter is not
amicably resolved, the Company intends to mount a vigorous defense. The
potential financial exposure of the Company in the civil suit is unknown.
The Company received an inquiry from the Medicaid Department of the State of
Mississippi and subsequently received a subpoena from the OIG concerning the
Company's 1994 cost report for its Mississippi Rural Health Clinics. The
Company is cooperating fully with such inquiries. There has been no statement
of issues or particular concerns given the Company sufficient to permit the
Company to determine the extent of financial exposure, if any. The Company is
not aware of any material error in the one year's cost report under inquiry,
following consultation with its outside consultant, who also assisted in the
preparation and filing of the original report. If any adjustments occur, such
would likely relate only to Mississippi physician clinics for 1994.
The types of services and products delivered by the Company, the required
quality of such services and products and the manner in which such services
and products are delivered and billed are each subject to significant and
complex regulations promulgated, interpreted and administered by the
appropriate federal or state governmental agency. Although the Company
believes that its products, services and procedures comply in all respects
with such regulations applicable to reimbursement eligibility, the
unavailability of advance formal administrative rulings in most regulated
areas subjects the Company to possible subsequent adverse interpretations and
rulings which may affect the eligibility of some or all of the Company's
services and products for reimbursement. Such an adverse interpretation or
ruling could have a substantial adverse impact on the Company's business.
In addition, the Company is required to obtain federal and state licenses
and permits relating to the distribution of pharmaceutical products, including
a federal Controlled Dangerous Substance Registration Certificate and Florida
State Wholesaler License. The Company is required to obtain similar licenses
from each state in which it does business.
The Company's acquisitions of primary care physician practices are
structured to attempt to comply with federal and state law restrictions on
business relationships between the Company and persons who may be in a
position to refer patients to the Company for the provision of health care
related items or services. Accordingly, the Company endeavors to undertake
such acquisitions in a manner where the consideration offered and paid is
consistent with fair market value in arms-length transactions and is not
determined in a manner that takes into account the volume or value of any
referrals or business that might otherwise be generated between the Company
and the physician whose practice is to be acquired and for which payment may
be made under Medicare or Medicaid. While the Company believes that its
acquisitions do not entail any form of unlawful remuneration, there can be no
assurances that enforcement authorities will not attempt to construe the
consideration exchanged in certain acquisition transactions as entailing
unlawful remuneration and to challenge such transactions on such basis.
6
<PAGE>
In many states, the "corporate practice of medicine doctrine" prohibits
business corporations from providing, or holding themselves out as providers
of, medical care through the employment of physicians. Although the two states
in which the Company has acquired practices of primary care physicians,
Florida and Mississippi, have not adopted this prohibition, there can be no
assurance that either state will not adopt this doctrine in the future or that
the Company will not acquire a primary care medical practice in a state that
has enacted or adopted through case law the corporate practice of medicine
doctrine. While the Company intends to structure future acquisitions to comply
with the corporate practice of medicine doctrine where it exists, there can be
no assurance that, given varying and uncertain interpretations of such laws,
the Company would be found to be in compliance with restrictions on the
corporate practice of medicine in all states. Enforcement of such doctrine
could require divestiture of acquired practices or restructuring of physician
relationships.
Health care is an area of extensive and dynamic regulatory change. Changes
in the law or new interpretations of existing laws can have a dramatic effect
on permissible activities, the relative costs associated with doing business,
and the amount of reimbursement by government and third-party payors. The
Omnibus Budget Reconciliation Act of 1987 ("OBRA 1987") created six categories
of durable medical equipment for purposes of reimbursement under the Medicare
Part B program. There is a separate fee schedule for each category. OBRA 1987
also controls whether durable medical equipment products will be paid for on a
rental or sale basis and established fixed payment rates for oxygen service as
well as a 15-month rental ceiling on certain medical equipment. An interim
final rule implementing the payment methodology under the fee schedules
recently was published in the Federal Register. Payment based on the fee
schedules is effective with covered items furnished on or after January 1,
1989. Generally, Medicare pays 80% of the lower of the supplier's actual
charge for the item or the fee schedule amount, after adjustment for the
annual deductible amount. OBRA 1990 made changes to Medicare Part B
reimbursement that were implemented in 1991. The substantive change was the
standardization of Medicare rates for certain equipment categories. Laws and
regulations often are adopted to regulate new products, services and
industries. There can be no assurances that either the states or the federal
government will not impose additional regulations upon the Company's
activities which might adversely affect the Company's business.
Political, economic and regulatory influences are subjecting the health care
industry in the United States to fundamental change. Although Congress has
failed to pass comprehensive health care reform legislation thus far, the
Company anticipates that Congress and state legislatures will continue to
review and assess alternative health care delivery and payment systems and may
in the future propose and adopt legislation effecting fundamental changes in
the health care delivery system. Further, each area of medical care is subject
to scrutiny and revision as to the amount of reimbursement which is
reasonable. Any reduction in reimbursement in those goods and services
provided by the Company would have a direct effect on gross revenues of the
Company. Legislative debate is expected to continue in the future, and the
Company cannot predict what impact the adoption of any federal or state health
care reform measures or future private sector reform may have on its industry
or business.
Pursuant to federal legislation (commonly known as "Stark II") enacted as
part of The Omnibus Budget Reconciliation Act of 1993, and effective January
1, 1995, physicians are prohibited from making referrals to entities in which
they (or immediate family members) have an investment interest or compensation
arrangement, where such referral is for any "designated health service"
covered by Medicare/Medicaid, including parenteral and enteral nutrients,
equipment and supplies, and home health services. Ownership by a physician of
investment securities in a publicly-held corporation with stockholders' equity
exceeding $75 million at the end of the corporation's most recent fiscal year
or on average during the previous three fiscal years is exempt from the
investment prohibition if the securities are traded on the New York, American
or a regional stock exchange, or The Nasdaq National Market. Exemptions from
the compensation arrangement prohibition include (i) amounts paid by an
employer to a physician pursuant to a bona fide employment relationship
meeting specified requirements, including payments being unrelated to
referrals and consistent with the fair market value of the services provided
and (ii) other personal service arrangements if certain requirements are met,
including that compensation be paid over the term of a written agreement with
a term of one year or more, be set in advance,
7
<PAGE>
not exceed fair market value, and be unrelated to referrals. While RoTech
intends to structure its acquisitions and operations to comply with Stark II,
there can be no assurance that future interpretations of that law will not
require structural and organizational modifications of the Company's existing
relationships with physicians, nor can assurance be given that present or
future relationships between the Company and physicians will be found to be in
compliance with such law.
INSURANCE
In recent years, participants in the health care market have become subject
to an increasing number of malpractice and product liability lawsuits, many of
which involve large claims and significant defense costs. As a result of the
liability risks inherent in the Company's lines of business, including the
risk of liability due to the negligence of physicians or other health care
professionals employed by or otherwise under contract to the Company, the
Company maintains liability insurance intended to cover such claims. There can
be no assurance that the coverage limits of the Company's insurance policies
will be adequate, or that the Company can obtain liability insurance in the
future on acceptable terms or at all.
The Company currently has in force various liability insurance policies,
with total coverage limits of $11.0 million per occurrence and in the
aggregate annually. These policies contain various levels of deductibles and
self-insured retentions. They provide the Company protection against claims
alleging bodily injury or property damage arising out of the Company's
operations, including home health care, but excluding the Company's employed
physicians. The Company has in force, with respect to physicians employed by
the Company, individual professional liability insurance policies, with
coverage limits ranging from $250,000 per occurrence to $1 million per
occurrence, and ranges from $750,000 in the aggregate annually to $3 million
in the aggregate annually. The Company's insurance policies are subject to
annual renewal.
LEGAL PROCEEDINGS
The Company is from time to time involved in various legal proceedings.
Although the Company does not believe that any currently pending proceeding
will materially and adversely affect the Company, there can be no assurance
that any current or future proceeding will not have a material adverse affect
on the Company's financial position or results of operations.
LEVERAGE
The Company's indebtedness is significant in relation to its shareholders'
equity. As of August 20, 1996, such debt accounted for approximately 48% of
the Company's total capitalization.
SUBORDINATION OF DEBENTURES
The Debentures are subordinate in right of payment to all current and future
Senior Indebtedness of the Company. Senior Indebtedness includes all secured
indebtedness of the Company, whether existing on or created or incurred after
the date of the issuance of the Debentures, that is not made subordinate to or
pari passu with the Debentures by the instrument creating the indebtedness. At
August 20, 1996, the aggregate amount of Senior Indebtedness outstanding and
the aggregate amount of indebtedness and other liabilities of the Company and
its subsidiaries to which the Debentures are effectively subordinated was
approximately $53.2 million. The Indenture does not limit the amount of
additional indebtedness, including Senior Indebtedness, which the Company can
create, incur, assume or guarantee. By reason of such subordination of the
Debentures, in the event of insolvency, bankruptcy, liquidation,
reorganization, dissolution or winding up of the business of the Company or
upon a default in payment with respect to any Senior Indebtedness of the
Company or an event of default with respect to such indebtedness resulting in
the acceleration thereof, the assets of the Company will be available to pay
the amounts due on the Debentures only after all Senior Indebtedness of the
Company has been paid in full. In addition, holders of the Debentures are
effectively subordinated to the claims of creditors of the Company's
subsidiaries, to the extent of the assets of such subsidiaries. In the event
of the insolvency,
8
<PAGE>
bankruptcy, liquidation, reorganization, dissolution or winding up of the
business of any subsidiary of the Company, creditors of such subsidiary
generally will have the right to be paid in full before any distribution is
made to the Company or the holders of the Debentures. See "Description of
Debentures."
LIMITATIONS ON REPURCHASE OF DEBENTURES UPON A REPURCHASE EVENT
In the event of a Repurchase Event, which includes a Change in Control and a
Termination of Trading (each as defined herein), each holder of the Debentures
will have the right, at the holder's option, to require the Company to
repurchase all or a portion of such holder's Debentures at a purchase price
equal to 100% of the principal amount thereof plus accrued interest to the
repurchase date. The Company's ability to repurchase the Debentures upon a
Repurchase Event may be limited by the terms of the Company's Senior
Indebtedness and the subordination provisions of the Indenture. Further, the
ability of the Company to repurchase Debentures upon a Repurchase Event will
be dependent on the availability of sufficient funds and compliance with
applicable securities laws. Accordingly, there can be no assurance that the
Company will be able to repurchase the Debentures upon a Repurchase Event. The
term "Repurchase Event" is limited to certain specified transactions and may
not include other events that might adversely affect the financial condition
of the Company or result in a downgrade of the credit rating of the Debentures
nor would the requirement that the Company offer to repurchase the Debentures
upon a Repurchase Event necessarily afford holders of the Debentures
protection in the event of a highly leveraged reorganization, merger or
similar transaction involving the Company. See "Description of Debentures."
ABSENCE OF PUBLIC MARKET; TRANSFER RESTRICTIONS
There is no existing market for the Debentures and there can be no assurance
as to the liquidity of any markets that may develop for the Debentures, the
ability of the holders to sell their Debentures or the price at which holders
of the Debentures may be able to sell their Debentures. Future trading prices
of the Debentures will depend on many factors, including, among other things,
prevailing interest rates, the Company's operating results, the price of the
Common Stock and the market for similar securities. The Initial Purchasers
have informed the Company that the Initial Purchasers intend to make a market
in the Debentures offered hereby; however, the Initial Purchasers are not
obligated to do so and any such market making activity may be terminated at
any time without notice to the holder of the Debentures. See "Description of
Debentures--Registration Rights; Liquidated Damages." The Debentures have been
designated for trading in the PORTAL Market; however, the Company does not
intend to apply for listing of the Debentures on any securities exchange.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JULY 31 APRIL 30
- -------------------------------------------------------- ----------------------------
1991 1992 1993 1994 1995 1995 1996
- ---- ----- ------ ------ ----- --------- --------
<S> <C> <C> <C> <C> <C> <C>
6.58x 19.65x 107.03x 192.62x 26.07x 19.94x 8.44x
</TABLE>
The ratio of earnings to fixed charges is computed by dividing fixed charges
into earnings from continuing operations before income taxes, minority
interest and extraordinary items plus fixed charges. Fixed charges consist of
interest expense, amortization of financing costs and the estimated interest
component of rent expense.
9
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sales of the
Debentures or the Conversion Shares by the Selling Securityholders. See
"Selling Securityholders" for a list of those persons and entities receiving
the proceeds from the sales of the Debentures or the Conversion Shares.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an indenture dated as of June 1, 1996 (the
"Indenture") between the Company and PNC Bank, Kentucky, Inc., as trustee (the
"Trustee"). The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indenture, including
the definition therein of certain terms. Wherever particular sections or
defined terms of the Indenture are referred to, such sections or defined terms
are incorporated herein by reference. Copies of the proposed form of Indenture
are available from the Company or the Initial Purchasers upon request at the
address provided on page 3 hereof.
GENERAL
The Debentures are unsecured obligations of the Company, are limited to
$110,000,000 in aggregate principal amount and mature on June 1, 2003. The
Debentures bear interest at the rate per annum shown on the front cover of
this Prospectus from the date of original issuance of Debentures pursuant to
the Indenture, or from the most recent Interest Payment Date to which interest
has been paid or provided for, payable semi-annually on June 1 and December 1
of each year, commencing December 1, 1996, to the Person in whose name the
Debenture (or any predecessor Debenture) is registered at the close of
business on the preceding May 15 or November 15, as the case may be. Interest
on the Debentures will be paid on the basis of a 360-day year of 12 30-day
months.
Principal of, and premium, if any, and interest on, the Debentures is
payable (i) in respect of Debentures held of record by The Depository Trust
Company ("DTC") or its nominee in same day funds on or prior to the payment
dates with respect to such amounts and (ii) in respect of Debentures held of
record by holders other than DTC or its nominee at the office of the Trustee
in New York, New York, and the Debentures may be surrendered for transfer,
exchange or conversion at the office of the Trustee in New York, New York. In
addition, with respect to Debentures held of record by holders other than DTC
or its nominee, payment of interest may be made at the option of the Company
by check mailed to the address of the persons entitled thereto as it appears
in the Register for the Debentures on the Regular Record Date for such
interest.
The Debentures are issued only in registered form, without coupons and in
denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any transfer or exchange of the Debentures, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge and any other expenses (including the fees and expenses of the Trustee)
payable in connection therewith. The Company is not required (i) to issue,
register the transfer of or exchange any Debentures during a period beginning
at the opening of business 15 days before the day of the mailing of a notice
of redemption and ending at the close of business on the day of such mailing,
or (ii) to register the transfer of or exchange any Debenture selected for
redemption in whole or in part, except the unredeemed portion of Debentures
being redeemed in part.
All monies paid by the Company to the Trustee or any Paying Agent for the
payment of principal of and premium and interest on any Debenture which remain
unclaimed for two years after such principal, premium or interest become due
and payable may be repaid to the Company. Thereafter, the Holder of such
Debenture may, as an unsecured general creditor, look only to the Company for
payment thereof.
The Indenture does not contain any provisions that would provide protection
to Holders of the Debentures against a sudden and dramatic decline in credit
quality of the Company resulting from any takeover,
10
<PAGE>
recapitalization or similar restructuring, except as described below under
"Certain Rights to Require Repurchase of Debentures."
CONVERSION RIGHTS
The Debentures are convertible into Common Stock at any time after the 60th
day following the date of original issuance of the Debentures and prior to
redemption or final maturity, initially at the conversion price of $26.25 per
share. The right to convert Debentures which have been called for redemption
will terminate at the close of business on the second business day preceding
the Redemption Date. See "Optional Redemption" below.
The conversion price is subject to adjustment upon the occurrence of any of
the following events: (i) the subdivision, combination or reclassification of
outstanding shares of Common Stock; (ii) the payment in shares of Common Stock
of a dividend or distribution on any class of capital stock of the Company;
(iii) the issuance of rights or warrants to all holders of Common Stock
entitling them to acquire shares of Common Stock at a price per share less
than the Current Market Price; (iv) the distribution to holders of Common
Stock of shares of capital stock other than Common Stock, evidences of
indebtedness, cash or assets (including securities, but excluding dividends or
distributions paid exclusively in cash and dividends, distributions, rights
and warrants referred to above); (v) a distribution consisting exclusively of
cash (excluding any cash distributions referred to in (iv) above) to all
holders of Common Stock in an aggregate amount that, together with (A) all
other cash distributions (excluding any cash distributions referred to in (iv)
above) made within the 12 months preceding such distribution and (B) any cash
and the fair market value of other consideration payable in respect of any
tender offer by the Company or a subsidiary of the Company for the Common
Stock consummated within the 12 months preceding such distribution, exceeds
12.5% of the Company's market capitalization (being the product of the Current
Market Price times the number of shares of Common Stock then outstanding) on
the date fixed for determining the stockholders entitled to such distribution;
and (vi) the consummation of a tender offer made by the Company or any
subsidiary of the Company for the Common Stock which involves an aggregate
consideration that, together with (X) any cash and other consideration payable
in respect of any tender offer by the Company or a subsidiary of the Company
for the Common Stock consummated within the 12 months preceding the
consummation of such tender offer and (Y) the aggregate amount of all cash
distributions (excluding any cash distributions referred to in (iv) above) to
all holders of the Common Stock within the 12 months preceding the
consummation of such tender offer, exceeds 12.5% of the Company's market
capitalization at the date of consummation of such tender offer. No adjustment
of the conversion price will be required to be made until cumulative
adjustments amount to at least one percent of the conversion price, as last
adjusted. Any adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent adjustment.
In addition to the foregoing adjustments, the Company will be permitted to
reduce the conversion price as it considers to be advisable in order that any
event treated for federal income tax purposes as a dividend of stock or stock
rights will not be taxable to the holders of the Common Stock or, if that is
not possible, to diminish any income taxes that are otherwise payable because
of such event. In the case of any consolidation or merger of the Company with
any other corporation (other than one in which no change is made in the Common
Stock), or any sale or transfer of all or substantially all of the assets of
the Company, the Holder of any Debenture then outstanding will, with certain
exceptions, have the right thereafter to convert such Debenture only into the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock into which such Debenture might have been converted immediately
prior to such consolidation, merger, sale or transfer; and adjustments will be
provided for events subsequent thereto that are as nearly equivalent as
practical to the conversion price adjustments described above.
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based upon the then
Closing Price at the close of business on the day of conversion. If any
Debentures are surrendered for conversion during the period from the close of
business on any Regular Record Date through and including the next succeeding
Interest Payment Date (except any such Debentures
11
<PAGE>
called for redemption), such Debentures when surrendered for conversion must
be accompanied by payment in next day funds of an amount equal to the interest
thereon which the registered Holder on such Regular Record Date is to receive.
Except as described in the preceding sentence, no interest will be payable by
the Company on converted Debentures with respect to any Interest Payment Date
subsequent to the date of conversion. No other payment or adjustment for
interest or dividends is to be made upon conversion.
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
Debentures are, to the extent set forth in the Indenture, subordinated in
right of payment to the prior payment in full of all Senior Indebtedness. If
there is a payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency or
similar proceedings of the Company, the holders of all Senior Indebtedness
will be entitled to receive payment in full of all amounts due or to become
due thereon or provision for such payment in money or money's worth before the
Holders of the Debentures will be entitled to receive any payment in respect
of the principal of or premium, if any, or interest on the Debentures. In the
event of the acceleration of the Maturity of the Debentures, the holders of
all Senior Indebtedness will first be entitled to receive payment in full in
cash of all amounts due thereon or provision for such payment in money or
money's worth before the Holders of the Debentures will be entitled to receive
any payment for the principal of or premium, if any, or interest on the
Debentures. No payments on account of principal of or premium, if any, or
interest on the Debentures or on account of the purchase or acquisition of
Debentures may be made if there has occurred and is continuing a default in
any payment with respect to Senior Indebtedness, any acceleration of the
maturity of any Senior Indebtedness of if any judicial proceeding is pending
with respect to any such default.
Senior Indebtedness is defined in the Indenture as (a) all indebtedness
(whether secured or unsecured) of the Company for money borrowed under the
Company's primary revolving credit and line of credit facilities and any
predecessor or successor credit facilities thereto, whether outstanding on the
date of execution of the Indenture (such as the Company's revolving credit and
line of credit facility of $200.0 million, any increase in the maximum
principal amount thereof and any predecessor or successor facilities thereto)
or thereafter created, incurred or assumed, (b) all secured indebtedness of
the Company for money borrowed, whether outstanding on the date of execution
of the Indenture or thereafter created, incurred or assumed, except any such
other indebtedness that by the terms of the instrument or instruments by which
such indebtedness was created or incurred expressly provides that it (i) is
junior in right of payment to the Debentures or (ii) ranks pari passu in right
of payment with the Debentures, and (c) any amendments, renewals, extensions,
modifications, refinancings and refundings of any of the foregoing. The term
"indebtedness for money borrowed" when used with respect to the Company is
defined to mean (i) any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money (including without limitation
fees, penalties and other obligations in respect thereof), whether or not
evidenced by bonds, debentures, notes or other written instruments, (ii) any
deferred payment obligation of, or any such obligation guaranteed by, the
Company for the payment of the purchase price of property or assets evidenced
by a note or similar instrument and (iii) any obligation of, or any such
obligation guaranteed by, the Company for the payment of rent or other amounts
under a lease of property or assets which obligation is required to be
classified and accounted for as a capitalized lease on the balance sheet of
the Company under generally accepted accounting principles.
The Debentures are obligations exclusively of the Company. A portion of the
operations of the Company are currently conducted principally through
subsidiaries, which are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts due pursuant to the
Debentures or to make any funds available therefor, whether by dividends,
loans or other payments. In addition, the payment of dividends and certain
loans and advances to the Company by such subsidiaries may be subject to
certain statutory or contractual restrictions, are contingent upon the
earnings of such subsidiaries and are subject to various business
considerations.
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<PAGE>
The Debentures are effectively subordinated to all indebtedness and other
liabilities and commitments (including trade payables and lease obligations)
of the Company's subsidiaries to the extent of the assets of such
subsidiaries. Any right of the Company to receive assets of any such
subsidiary upon the liquidation or reorganization of any such subsidiary (and
the consequent right of the Holders of the Debentures to participate in those
assets) will be effectively subordinated to the claims of that subsidiary's
creditors, except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would
still be subordinate to any security in the assets of such subsidiary and any
indebtedness of such subsidiary senior to that held by the Company.
The Indenture does not limit or prohibit the incurrence of Senior
Indebtedness. At August 20, 1996, the aggregate amount of Senior Indebtedness
outstanding and the aggregate amount of indebtedness and other liabilities of
the Company and its subsidiaries to which the Debentures are effectively
subordinated was approximately $53.2 million. The Company also expects to
incur Senior Indebtedness from time to time in the future.
OPTIONAL REDEMPTION
The Debentures are redeemable, at the Company's option, in whole or from
time to time in part, at any time on or after June 4, 1999, upon not less than
15 nor more than 60 days' notice mailed to each Holder of Debentures to be
redeemed at its address appearing in the Security Register and prior to
Maturity at the following Redemption Prices (expressed as percentages of the
principal amount) plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to the Redemption
Date).
If redeemed during the 12-month period beginning June 1, in the year
indicated (June 4, in the case of 1999), the redemption price shall be:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---- ----------
<S> <C>
1999........................... 103.00%
2000........................... 102.25%
</TABLE>
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---- ----------
<S> <C>
2001........................... 101.50%
2002........................... 100.75%
</TABLE>
No sinking fund is provided for the Debentures.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company will not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, or permit any Person to consolidate with or merge into
the Company or convey, transfer or lease its properties substantially as an
entirety to the Company, unless (a) if applicable, the Person formed by such
consolidation or into which the Company is merged or the Person or corporation
which acquires the properties and assets of the Company substantially as an
entirety is a corporation, partnership or trust organized and validly existing
under the laws of the United States or any state thereof or the District of
Columbia and expressly assumes payment of the principal of and premium, if
any, and interest on the Debentures and performance and observance of each
obligation of the Company under the Indenture, (b) after consummating such
consolidation, merger, transfer or lease, no Default or Event of Default will
occur and be continuing, (c) such consolidation, merger or acquisition does
not adversely affect the validity or enforceability of the Debentures and (d)
the Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease complies with the provisions of the Indenture.
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<PAGE>
CERTAIN RIGHTS TO REQUIRE REPURCHASE OF DEBENTURES
In the event of any Repurchase Event (as defined below) occurring after the
date of issuance of the Debentures and on or prior to Maturity, each Holder of
Debentures will have the right, at the Holder's option, to require the Company
to repurchase all or any part of the Holder's Debentures on the date (the
"Repurchase Date") that is 30 days after the date the Company gives notice of
the Repurchase Event as described below at a price (the "Repurchase Price")
equal to 100% of the principal amount thereof, together with accrued and
unpaid interest to the Repurchase Date. On or prior to the Repurchase Date,
the Company shall deposit with the Trustee or a Paying Agent an amount of
money sufficient to pay the Repurchase Price of the Debentures which are to be
repaid on or promptly following the Repurchase Date.
Failure by the Company to provide timely notice of a Repurchase Event, as
provided for below, or to repurchase the Debentures when required under the
preceding paragraph will result in an Event of Default under the Indenture
whether or not such repurchase is permitted by the subordination provisions of
the Indenture.
On or before the 15th day after the occurrence of a Repurchase Event, the
Company is obligated to mail to all Holders of Debentures a notice of the
occurrence of such Repurchase Event and identifying the Repurchase Date, the
date by which the repurchase right must be exercised, the Repurchase Price for
Debentures and the procedures which the Holder must follow to exercise this
right. To exercise the repurchase right, the Holder of a Debenture must
deliver, on or before the close of business on the Repurchase Date, written
notice to the Company (or an agent designated by the Company for such purpose)
and to the Trustee of the Holder's exercise of such right, together with the
certificates evidencing the Debentures with respect to which the right is
being exercised, duly endorsed for transfer.
A "Repurchase Event" shall have occurred upon the occurrence of a Change in
Control (as defined below) or a Termination of Trading (as defined below).
A "Change in Control" shall occur when: (i) all or substantially all of the
Company's assets are sold as an entirety to any person or related group of
persons; (ii) there shall be consummated any consolidation or merger of the
Company (A) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of Common Stock outstanding
immediately prior to the effectiveness thereof are changed into or exchanged
for the same consideration) or (B) pursuant to which the Common Stock would be
converted into cash, securities or other property, in each case other than a
consolidation or merger of the Company in which the holders of the Common
Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the total voting power of all classes of
capital stock entitled to vote generally in the election of directors of the
continuing or surviving corporation immediately after such consolidation or
merger in substantially the same proportion as their ownership of Common Stock
immediately before such transaction; (iii) any person, or any persons acting
together which would constitute a "group" for purposes of Section 13(d) of the
Exchange Act, together with any affiliates thereof, shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) at least 50% of the total voting
power of all classes of capital stock of the Company entitled to vote
generally in the election of directors of the Company; (iv) at any time during
any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any
new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Company was approved by a vote of 66
2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (v) the Company is
liquidated or dissolved or adopts a plan of liquidation or dissolution.
A "Termination of Trading" shall occur if the Common Stock (or other common
stock into which the Debentures are then convertible) is neither listed for
trading on a U.S. national securities exchange nor approved for trading on an
established automated over-the-counter trading market in the United States.
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<PAGE>
The right to require the Company to repurchase Debentures as a result of the
occurrence of a Repurchase Event could create an event of default under Senior
Indebtedness of the Company, as a result of which any repurchase could, absent
a waiver, be blocked by the subordination provisions of the Debentures. See
"Subordination." Failure by the Company to repurchase the Debentures when
required will result in an Event of Default with respect to the Debentures
whether or not such repurchase is permitted by the subordination provisions.
The Company's ability to pay cash to the Holders of Debentures upon a
repurchase may be limited by certain financial covenants contained in the
Company's Senior Indebtedness.
In the event a Repurchase Event occurs and the Holders exercise their rights
to require the Company to repurchase Debentures, the Company intends to comply
with applicable tender offer rules under the Exchange Act, including Rules
13e-4 and 14e-1, as then in effect, with respect to any such purchase.
The foregoing provisions would not necessarily afford Holders of the
Debentures protection in the event of highly leveraged or other transactions
involving the Company that may adversely affect Holders. In addition, the
foregoing provisions may discourage open market purchases of the Common Stock
or a non-negotiated tender or exchange offer for such stock and, accordingly,
may limit a stockholder's ability to realize a premium over the market price
of the Common Stock in connection with any such transaction.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to the
Debentures: (a) default in the payment of principal of or any premium on any
Debenture when due (even if such payment is prohibited by the subordination
provisions of the Indenture); (b) default in the payment of any interest on
any Debenture when due, which default continues for 30 days (even if such
payment is prohibited by the subordination provisions of the Indenture); (c)
failure to provide timely notice of a Repurchase Event as required by the
Indenture; (d) default in the payment of the Repurchase Price in respect of
any Debenture on the Repurchase Date therefor (even if such payment is
prohibited by the subordination provisions of the Indenture); (e) default in
the performance of any other covenant of the Company in the Indenture which
continues for 60 days after written notice as provided in the Indenture; (f)
default under any bond, debenture, note or other evidence of indebtedness for
money borrowed by the Company or any subsidiary of the Company or under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by the
Company or any subsidiary of the Company, whether such indebtedness now exists
or shall hereafter be created, which default shall constitute a failure to pay
the principal of indebtedness in excess of $5,000,000 when due and payable
after the expiration of any applicable grace period with respect thereto or
shall have resulted in indebtedness in excess of $5,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a period of 30
days after there shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Outstanding Debentures a written notice specifying such default
and requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled; and (g) certain events in
bankruptcy, insolvency or reorganization of the Company or any subsidiary of
the Company.
If an Event of Default with respect to the Debentures shall occur and be
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debentures then outstanding may declare
the principal of and premium, if any, on all such Debentures to be due and
payable immediately, but if the Company cures all Events of Default (except
the nonpayment of interest on, premium, if any, and principal of any Notes)
and certain other conditions are met, such declaration may be canceled and
past defaults may be waived by the holders of a majority in principal amount
of Outstanding Debentures. If an Event of Default shall occur as a result of
an event of bankruptcy, insolvency or reorganization of the Company or any
subsidiary of the Company, the aggregate principal amount of the Debentures
shall automatically become due and payable. The Company is required to furnish
to the Trustee annually a statement as to the performance by the Company of
certain of its obligations under the Indenture and as to any default in such
performance. The Indenture
15
<PAGE>
provides that the Trustee may withhold notice to the Holders of the Debentures
of any continuing default (except in the payment of the principal of or
premium, if any, or interest on any Debentures) if the Trustee considers it in
the interest of Holders of the Debentures to do so.
MODIFICATION, AMENDMENTS AND WAIVERS
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of the Holders to: (a) cause the Indenture to
be qualified under the Trust Indenture Act; (b) evidence the succession of
another Person to the Company and the assumption by any such successor of the
covenants of the Company herein and in the Debentures; (c) add to the
covenants of the Company for the benefit of the Holders or an additional Event
of Default, or surrender any right or power conferred upon the Company; (d)
secure the Debentures; (e) make provision with respect to the conversion
rights of Holders in the event of a consolidation, merger or sale of assets
involving the Company, as required by the Indenture; (f) evidence and provide
for the acceptance of appointment by a successor Trustee with respect to the
Debentures; (g) cure any ambiguity, correct or supplement any provision which
may be defective or inconsistent with any other provision, or make any other
provisions with respect to matters or questions arising under the Indenture
which shall not be inconsistent with the provisions of the Indenture,
provided, however, that no such modifications or amendment may adversely
affect the interest of Holders in any material respect.
SATISFACTION AND DISCHARGE
The Company may discharge its obligations under the Indenture while
Debentures remain Outstanding if (a) all Outstanding Debentures will become
due and payable at their scheduled maturity within one year or (b) all
Outstanding Debentures are scheduled for redemption within one year, and in
either case the Company has deposited with the Trustee an amount sufficient to
pay and discharge all Outstanding Debentures on the date of their scheduled
maturity or the scheduled date of redemption.
FORM, DENOMINATION AND REGISTRATION
The Debentures are issued in fully registered form, without coupons, in
denominations of $1,000 in principal amount and integral multiples thereof.
Global Notes; Book-Entry Form. The Debentures were sole in reliance on Rule
144A under the Securities Act (as evidenced by a global note hereinafter
referred to as the "Restricted Global Note") and in reliance on Regulation S
under the Securities Act (as evidenced by a global note hereinafter referred
to as the "Regulation S Global Note") (the Restricted Global Note and
Regulation S Global Note are together herein referred to as the "Global
Notes"). The Global Notes were initially deposited with, or on behalf of, the
Depository Trust Company, New York, New York ("DTC") and registered in the
name of Cede & Co. ("Cede") as DTC's nominee. Except as set forth below, the
Global Notes may be transferred, in whole or in part, only to another nominee
of DTC or to a successor of DTC or its nominee. The Restricted Global Note
will be (i) reduced in principal amount to reflect the subsequent transfer by
owners of beneficial interest in the Restricted Global Note to a Regulation S
Purchaser (as defined herein) and (ii) increased in principal amount to
reflect the subsequent transfer from a Regulation S Purchaser. The Regulation
S Global Note will be (i) reduced in principal amount to reflect the
subsequent transfer by owners of beneficial interest in the Regulation S
Global Note to a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act (a "Qualified Institutional Buyer," or "QIB") and (ii)
increased in principal amount to reflect the subsequent transfer from a
Qualified Institutional Buyer.
The Holders of Debentures may hold their interests in the Global Notes
directly through DTC if such Holder is a participant in DTC, or indirectly
through organizations which are participants in DTC (the "Participants").
Transfers between Participants will be effected in the ordinary way in
accordance with DTC rules and will be settled in same day funds. The laws of
some states require that certain persons take physical delivery of securities
16
<PAGE>
in definitive form. Consequently, the ability to transfer beneficial interests
in the Global Notes to such persons may be limited.
The Holders of Debentures who are not Participants may beneficially own
interests in the Global Notes held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC,
is the registered owner of the Global Notes, Cede for all purposes will be
considered the sole holder of the Global Notes.
Payment of interest on and the redemption price (upon redemption at the
option of the Company or at the option of the Holder upon a Change of Control)
of the Global Notes will be made to Cede, the nominee for DTC, as the
registered owner of the Global Notes, by wire transfer of immediately
available funds. Neither the Company, the Trustee nor any paying agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
With respect to any payment of interest on and the redemption price (upon
redemption at the option of the Company or at the option of the Holder upon a
Change of Control) of the Global Notes, DTC's practice is to credit
Participants' accounts on the payment date therefor with payments in amounts
proportionate to their respective beneficial interests in the Debentures
represented by the Global Notes as shown on the records of DTC, unless DTC has
reason to believe that it will not receive payment on such payment date.
Payments by Participants to owners of beneficial interests in Debentures
represented by the Global Notes held through such Participants will be the
responsibility of such Participants, as is now the case with securities held
for the accounts of customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in Debentures represented by the Global Notes to
pledge such interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interest, may be affected
by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the
Company will cause Debentures to be issued in definitive form in exchange for
the Global Notes.
Certificated Debentures. QIBs may request that their Debentures be issued in
definitive registered form. In addition, certificated Debentures may be issued
in exchange for Debentures represented by the Global Notes if no successor
depositary is appointed by the Company as set forth above under the paragraph
entitled "Global Notes; Book-Entry Form."
Restrictions on Transfer; Legends. The Debentures, and the Common Stock into
which they may be converted, are subject to certain transfer restrictions. See
"--Absence of Public Trading Market; Transfer Restrictions."
PAYMENTS OF PRINCIPAL AND INTEREST
The Indenture requires that payments in respect of the Debentures (including
principal, premium, if any, and interest) held of record by DTC (including
Debentures evidenced by the Restricted Global Note) be made in same day funds.
Payments in respect of the Debentures held of record by holders other than DTC
may, at the option of the Company, be made by check and mailed to such holders
of record as shown on the register for the Debentures.
17
<PAGE>
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to the Registration Rights Agreement between the Company and the
Initial Purchasers, the Company has filed with the Commission a registration
statement on Form S-3 (the "Shelf Registration Statement"), of which this
Prospectus is a part, to cover resales of Transfer Restricted Securities (as
defined below) by the holders thereof who satisfy certain conditions relating
to the provision of information in connection with the Shelf Registration
Statement. Notwithstanding the foregoing, the Company is permitted to prohibit
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement under certain circumstances and subject to certain
conditions (any period during which offers and sales are prohibited being
referred to as a "Suspension Period"). For the purposes of the foregoing,
"Transfer Restricted Securities" means each Debenture and any underlying share
of Common Stock until the date on which such Debenture or underlying share of
Common Stock has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement, the date on
which such Debenture or underlying share of Common Stock is distributed to the
public pursuant to Rule 144 under the Securities Act or the date on which such
Debenture or share of Common Stock may be sold or transferred pursuant to Rule
144(k) (or any similar provisions then in force).
Holders of the Transfer Restricted Securities are required to deliver
information to be used in connection with, and to be named as selling
securityholders in, the Shelf Registration Statement and to provide any
comments they may wish to make on the Shelf Registration Statement within the
time periods set forth in the Registration Rights Agreement in order to have
their Transfer Restricted Securities included in the Shelf Registration
Statement. The Transfer Restricted Securities of any Holder who elects not to
include such securities in the Shelf Registration Statement could be deemed to
be less liquid than if such securities were included in the Shelf Registration
Statement. In addition, there can be no assurance that the Company will be
able to maintain an effective and current registration statement as required.
The absence of such a registration statement may limit the holder's ability to
sell such Transfer Restricted Securities or adversely affect the price at
which such Transfer Restricted Securities can be sold.
The Registration Rights Agreement provides that if (i) the applicable Shelf
Registration Statement is not filed with the Commission on or prior to 90 days
after the Closing Date, or the applicable Shelf Registration Statement has not
been declared effective by the Commission within 120 days after the Closing
Date, or (ii) the Shelf Registration Statement is filed and declared effective
but shall thereafter cease to be effective (without being succeeded
immediately by an additional registration statement filed and declared
effective) or usable for the offer and sale of Transfer Restricted Securities
for a period of time (including any Suspension Period) which shall exceed 60
days in the aggregate in any of the one-year periods ending on the first,
second and third anniversaries of the Closing Date, or which shall exceed 30
days in any calendar quarter within any of such one-year periods (each such
event referred to in clauses (i) and (ii) being referred to herein as a
"Registration Default"), the Company will pay liquidated damages to each
Holder of Transfer Restricted Securities. The amount of liquidated damages
payable during any period during which a Registration Default shall have
occurred and be continuing is that amount which is equal to one-quarter of one
percent (25 basis points) per annum per $1,000 principal amount, or $0.01 per
week per share (subject to adjustment in the event of stock splits, stock
recombinations, stock dividends and the like) constituting Transfer Restricted
Securities, for each 90-day period or part thereof until the applicable
registration statement is filed and the applicable registration statement is
declared effective, or the Shelf Registration Statement again becomes
effective or usable, as the case may be, up to a maximum amount of liquidated
damages of $0.25 per week per $1,000 principal amount of Debentures or $0.05
per week per share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities. All accrued liquidated damages
shall be paid to holders of Debentures by wire transfer of immediately
available funds or by federal funds check by the Company on each Damages
Payment Date (as defined in the Registration Rights Agreement). Following the
cure of a Registration Default, liquidated damages will cease to accrue with
respect to such Registration Default.
Holders of the Debentures are required to make certain representations to
the Company (as described in the Registration Rights Agreement) in connection
with the Shelf Registration Statement within the time periods set
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<PAGE>
forth in the Registration Rights Agreement in order to have their Debentures
and Common Stock included in the Shelf Registration Statement.
The Company shall cause the Shelf Registration Statement to be effective for
a period of three years from the effective date thereof or such shorter period
that will terminate when each of the Transfer Restricted Securities covered by
the Registration Statement ceases to be a Transfer Restricted Security.
The foregoing summary of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the provisions of the Registration Rights
Agreement. Copies of the Registration Rights Agreement are available from the
Company upon request.
GOVERNING LAW
The Indenture and Debentures are governed by and construed in accordance
with the laws of the State of New York, without giving effect to such State's
conflicts of laws principles.
INFORMATION CONCERNING THE TRUSTEE
The Company and its subsidiaries may maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of
business.
ABSENCE OF PUBLIC TRADING MARKET; TRANSFER RESTRICTIONS
There is no existing market for the Debentures and there can be no assurance
as to the liquidity of any markets that may develop for the Debentures, the
ability of the holders to sell their Debentures or at what price holders of
the Debentures will be able to sell their Debentures. Future trading prices of
the Debentures will depend upon many factors including, among other things,
prevailing interest rates, the Company's operating results, the price of the
Common Stock and the market for similar securities. The Initial Purchasers
have informed the Company that they intend to make a market in the Debentures
offered hereby; however, the Initial Purchasers are not obligated to do so and
any such market making activity may be terminated at any time without notice
to the holders of the Debentures. See "--Registration Rights; Liquidated
Damages." The Debentures have been designated for trading in the PORTAL
Market; however, the Company does not intend to apply for listing of the
Debentures on any securities exchange.
DESCRIPTION OF CAPITAL STOCK
The authorized common stock of RoTech consists of 50,000,000 shares of
Common Stock, $.0002 par value, of which approximately 25.2 million shares
were outstanding as of August 20, 1996. On that date there were approximately
670 record holders of shares of Common Stock. Holders of Common Stock are
entitled to receive such dividends as may be declared from time to time by the
Board of Directors out of funds legally available thereof, if any. The holders
of Common Stock are entitled to share ratably in any distribution to
shareholders upon liquidation of the Company. The holders of Common Stock have
no preemptive, registration or other subscription or conversion rights, other
than as disclosed herein, and the Common Stock is not subject to further calls
or assessments by the Company. The Common Stock currently outstanding is
validly issued, fully paid and non-assessable. See "Description of
Debentures."
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<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth certain information as of August 26, 1996
(except as otherwise noted) as to the security ownership of the Selling
Securityholders. Except as set forth below, none of the Selling
Securityholders has had a material relationship with the Company or any of its
predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES
AMOUNT OF DEBENTURES OF COMMON STOCK
NAME THAT MAY BE SOLD THAT MAY BE SOLD*
- ---- -------------------- -----------------
<S> <C> <C>
Nomura Securities (Bermuda) Ltd. (1).... $ 1,875,000 71,428
SMM Co. BV(2)........................... 2,950,000 112,380
LCMS Foundation(3)...................... 1,000,000 38,095
New York Life Separate Account #7(3).... 1,500,000 57,142
Robertson Stephens & Co., LLC(3)........ 450,000 17,142
Catholic Mutual Relief Society of
America(4)............................. 150,000 5,714
Catholic Mutual Relief Society of
America Retirement Plan and Trust(4)... 350,000 13,333
Societe Generale Securities Corp.(4).... 750,000 28,571
ICI American Holdings Pension(4)........ 350,000 13,333
Zeneca Holdings Pension(4).............. 350,000 13,333
Delaware State Retirement Fund--Froley,
Revy(4)................................ 700,000 26,666
WAFRA Discretionary(4).................. 500,000 19,047
SAIF Corporation(4)..................... 1,500,000 57,142
Oregon Equity Fund(4)................... 3,000,000 114,285
Nalco Chemical Retirement(4)............ 150,000 5,714
Kapiolani Medical Center(4)............. 250,000 9,523
Queen's Health Systems(4)............... 200,000 7,619
Smith Barney Inc........................ 2,750,000 104,761
Lipco Partners, L.P..................... 1,800,000 68,571
San Diego City Retirement............... 255,000 9,714
Occidental College...................... 70,000 2,666
San Diego County Convertible............ 885,000 33,714
Boston Museum of Fine Arts.............. 25,000 952
Engineers Joint Pension................. 125,000 4,761
Wake Forest University.................. 200,000 7,619
N-A Income & Growth Fund................ 750,000 28,571
Presbyterian Healthcare................. 165,000 6,285
Austin Firefighters..................... 90,000 3,428
Baptist Hospital of Miami............... 65,000 2,476
AIM Charter Fund, a Series of Aim Equity
Funds, Inc.(3)......................... 10,000,000 380,952
AIM Balanced Fund, a Series of AIM Funds
Group(3)............................... 1,200,000 45,714
AIM V.I. Growth and Income Fund, a
Series of AIM Variable
Insurance Funds, Inc.(3)............... 400,000 15,238
Castle Convertible Fund, Inc.(3)........ 500,000 19,047
LB Series Fund, Inc.--High Yield
Portfolio.............................. 5,650,000 215,238
Lutheran Brotherhood High Yield Fund.... 3,850,000 146,666
Mainstay Convertible Fund(3)............ 4,500,000 171,428
Robertson Stephens Investment Management
L.P.(4)................................ 1,300,500 49,542
Value Line Convertible Fund............. 500,000 19,047
Van Kampen American Capital Harbor
Fund(3)................................ 1,700,000 64,761
Allstate Insurance Company.............. 2,500,000 95,238
Any other Selling Securityholders or
future transferee from any such Selling
Securityholder(5)...................... 54,694,500 2,083,620
------------ ---------
$110,000,000 4,190,476
</TABLE>
- --------
(1) Information is as of August 15, 1996.
(2) Information is as of August 19, 1996.
(3) Information is as of August 22, 1996.
(4) Information is as of August 23, 1996.
(5) Information regarding these persons or entities will be added by
supplement to this Prospectus.
* Assumes a conversion price of $26.25 per share and a cash payment in lieu
of any fractional share interest.
20
<PAGE>
The preceding table has been prepared based upon information furnished to
the Company by the Depository Trust Company, PNC Bank, Kentucky, Inc., trustee
under the Indenture, and by or on behalf of the Selling Securityholders.
Additional information concerning ownership of the Debentures and Conversion
Shares offered hereby rests with certain holders of the Debentures and
Conversion Shares who are not named in the preceding table, with whom the
Company believes it has no affiliation and from whom the Company has received
no response to its request for such information.
In view of the fact that Selling Securityholders may offer all or a portion
of the Debentures or Conversion Shares held by them pursuant to the offering
contemplated by this Prospectus, and because this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of Debentures or the number of Conversion Shares that will be held by
the Selling Securityholders after completion of the offering made hereby. In
addition, the Selling Securityholders may have sold, transferred or otherwise
disposed of all or a portion of their Debentures and/or Conversion Shares,
since the date on which they provided the information set forth above, in
transactions exempt from the registration requirements of the Securities Act.
Information concerning the Selling Securityholders may change from time to
time and any such changed information will be set forth in supplements to this
Prospectus if and when necessary. In addition, the per share conversion price,
and therefor the number of shares issuable upon conversion of the Debentures,
is subject to adjustment under certain circumstances. Accordingly, the
aggregate principal amount of Debentures and the number of Conversion Shares
issuable upon conversion of the Debentures offered hereby may increase or
decrease.
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<PAGE>
PLAN OF DISTRIBUTION
The Debentures and the Conversion Shares are being registered to permit
public secondary trading of such securities by the holders thereof from time
to time after the date of this Prospectus. The Company has agreed, among other
things, to bear all expenses (other than underwriting discounts, selling
commissions and fees and expenses of counsel and other advisors to holders of
the Debentures and the underlying Common Stock) in connection with the
registration and sale of the Debentures and the Conversion Shares covered by
this Prospectus.
The Company will not receive any of the proceeds from the offering of
Debentures and the Conversion Shares by the Selling Securityholders. The
Company has been advised by the Selling Securityholders that the Selling
Securityholders may sell all or a portion of the Debentures and Conversion
Shares beneficially owned by them and offered hereby from time to time on any
exchange on which the securities are listed on terms to be determined at the
times of such sales. The Selling Securityholders may also make private sales
directly or through a broker or brokers. Alternatively, any of the Selling
Securityholders may from time to time offer the Debentures or shares of Common
Stock beneficially owned by them through underwriters, dealers or agents, who
may receive compensation in the form of underwriting discounts, commissions or
concessions from the Selling Securityholders and the purchasers of the
Debentures or shares or Common Stock from whom they may act as agent. The
aggregate proceeds to the Selling Securityholders from the sale of the
Debentures or shares or Common Stock offered by them hereby will be the
purchase price of such Debentures or shares of Common Stock less discounts and
commissions, if any.
The Debentures and the Conversion Shares may be sold from time to time in
one or more transactions at fixed offering prices, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the holders of such securities or by agreement
between such holders and underwriters or dealers who may receive fees or
commissions in connection therewith.
The outstanding Common Stock of the Company is listed for trading on The
Nasdaq National Market. The Initial Purchasers have advised the Company that
they are making and currently intend to continue making a market in the
Debentures; however, they are not obligated to do so and any such market-
making may be discontinued at any time without notice, in the sole discretion
of the Initial Purchasers. The Company does not intend to apply for listing of
the Debentures on any securities exchange. Accordingly, no assurance can be
given as to the development of liquidity of any trading market that may
develop for the Debentures. See "Risk Factors--Absence of Public Market;
Transfer Restrictions."
In order to comply with the securities laws of certain states, if
applicable, the Debentures and Conversion Shares will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the Debentures and Conversion Shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
The Selling Securityholders and any broker and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Debentures or the Conversion Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
commissions received by such broker-dealers, agents or underwriters and any
profit on the resale of the Debentures or the Conversion Shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is no
assurance that any Selling Securityholder will sell any or all of the
Debentures or Conversion Shares described herein, and any Selling
Securityholder may transfer, devise or gift such securities by other means not
described herein.
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<PAGE>
The Debentures were originally sold to Smith Barney Inc., Needham & Company,
Inc. and Wheat, First Securities, Inc. in May 1996 in a private placement. The
Company agreed to indemnify and hold Smith Barney Inc., Needham & Company,
Inc. and Wheat, First Securities, Inc. harmless against certain liabilities
under the Securities Act that could arise in connection with the sale of the
Debentures by Smith Barney Inc., Needham & Company, Inc. and Wheat, First
Securities, Inc. The Company and the Selling Securityholders are obligated to
indemnify each other against certain liabilities arising under the Securities
Act.
The Company will use its best efforts to cause the registration statement to
which this Prospectus relates to become effective as promptly as is
practicable and to keep the registration statement effective for a period of
three years from the effective date thereof, or until the Shelf Registration
Statement is no longer required for transfer of the Debentures or the
underlying Common Stock. The Company is permitted to suspend the use of this
Prospectus in connection with the sales of Debentures and Conversion Shares by
holders upon the happening of an event or if there exists any fact that makes
any statement of material fact made in this Prospectus untrue or that requires
the making of additions to or changes in the Prospectus in order to make the
statements herein not misleading until such time as the Company advises the
Selling Securityholders that use of the Prospectus may be resumed, in which
case the period of time during which the Company is required to maintain the
effectiveness of the Shelf Registration Statement shall be extended. Expenses
of preparing and filing the registration statement and all post-effective
amendments will be borne by the Company.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain United States federal
income tax considerations to holders of the Debentures. This discussion is
based upon the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations, Internal Revenue Service ("IRS") rulings, and judicial
decisions now in effect, all of which are subject to change (possibly with
retroactive effect) or different interpretations.
This discussion does not deal with all aspects of United States federal
income taxation that may be important to holders of the Debentures or shares
of Common Stock and does not deal with tax consequences arising under the laws
of any foreign, state or local jurisdiction. This discussion is for general
information only, and does not purport to address all tax consequences that
may be important to particular purchasers in light of their personal
circumstances, or to certain types of purchasers (such as certain financial
institutions, insurance companies, tax-exempt entities, dealers in securities
or persons who hold the Debentures or Common Stock in connection with a
straddle) that may be subject to special rules. This discussion assumes that
each holder holds the Debentures and the shares of Common Stock received upon
conversion thereof as capital assets.
For the purpose of this discussion, a "Non-U.S. Holder" refers to any holder
who is not a United States person. The term "United States person" means a
citizen or resident of the United States, a corporation or partnership created
or organized in the United States or any state thereof, or an estate or trust,
the income of which is includible in income for United States federal income
tax purposes regardless of its source.
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING
THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THEIR PARTICIPATION
IN THIS OFFERING, OWNERSHIP AND DISPOSITION OF THE DEBENTURES, INCLUDING
CONVERSION OF THE DEBENTURES, AND THE EFFECT THAT THEIR PARTICULAR
CIRCUMSTANCES MAY HAVE ON SUCH TAX CONSEQUENCES.
OWNERSHIP OF THE DEBENTURES
Interest on Debentures. Interest paid on Debentures will be taxable to a
holder as ordinary interest income in accordance with the holder's methods of
tax accounting at the time that such interest is accrued or (actually or
constructively) received. The Company expects that the Debentures will not be
issued with original issue discount ("OID") within the meaning of the Code.
23
<PAGE>
Constructive Dividend. Certain corporate transactions, such as distributions
of assets to holders of Common Stock, may cause a deemed distribution to the
holders of the Debentures if the conversion price or conversion ratio of the
Debentures is adjusted to reflect such corporate transaction. Such deemed
distributions will be taxable as a dividend, return of capital, or capital
gain in accordance with the earnings and profits rules discussed under
"Dividends on Shares of Common Stock."
Sale or Exchange of Debentures or Shares of Common Stock. In general, a
holder of Debentures will recognize gain or loss upon the sale, redemption,
retirement or other disposition of the Debentures measured by the difference
between the amount of cash and the fair market value of any property received
(except to the extent attributable to the payment of accrued interest) and the
holder's adjusted tax basis in the Debentures. A holder's tax basis in
Debentures generally will equal the cost of the Debentures to the holder
increased by the amount of market discount, if any, previously taken into
income by the holder or decreased by any bond premium theretofore amortized by
the holder with respect to the Debentures. (For the basis and holding period
of shares of Common Stock, see "Conversion of Debentures.") In general, each
holder of Common Stock into which the Debentures have been converted will
recognize gain or loss upon the sale, exchange, redemption, or other
disposition of the Common Stock under rules similar to those applicable to the
Debentures. Special rules may apply to redemptions, or other disposition of
the common stock under rules similar to those applicable to the Debentures.
Special rules may apply to redemptions of the Common Stock which may result in
the amount paid being treated as a dividend. Subject to the market discount
rules discussed below, the gain or loss on the disposition of the Debentures
or shares of Common Stock will be capital gain or loss and will be long-term
gain or loss if the Debentures or shares of Common Stock have been held for
more than one year at the time of such disposition.
Conversion of Debentures. A holder of Debentures will not recognize gain or
loss on the conversion of the Debentures into shares of Common Stock. The
holder's tax basis in the shares of Common Stock received upon conversion of
the Debentures will be equal to the holder's aggregate basis in the Debentures
exchanged therefor (less any portion thereof allocable to cash received in
lieu of a fractional share). The holding period of the shares of Common Stock
received by the holder upon conversion of Debentures will generally include
the period during which the holder held the Debentures prior to the
conversion.
Cash received in lieu of a fractional share of Common Stock should be
treated as a payment in exchange for such fractional share rather than as a
dividend. Gain or loss recognized on the receipt of cash paid in lieu of such
fractional shares generally will equal the difference between the amount of
cash received and the amount of tax basis allocable to the fractional shares.
Market Discount. The resale of Debentures may be affected by the "market
discount" provisions of the Code. For this purpose, the market discount on a
Debenture will generally be equal to the amount, if any, by which the stated
redemption price at maturity of the Debenture immediately after its
acquisition exceeds the holder's tax basis in the Debenture. Subject to a de
minimis exception, these provisions generally require a holder of a Debenture
acquired at a market discount to treat as ordinary income any gain recognized
on the disposition of such Debenture to the extent of the "accrued market
discount" on such Debenture at the time of disposition. In general, market
discount on a Debenture will be treated as accruing on a straight-line basis
over the term of such Debenture, or, at the election of the holder, under a
constant yield method. A holder of a Debenture acquired at a market discount
may be required to defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the Debenture until
the Debenture is disposed of in a taxable transaction, unless the holder
elects to include accrued market discount in income currently.
Dividends on Shares of Common Stock. Distributions on shares of Common Stock
will constitute dividends for United States federal income tax purposes to the
extent of current or accumulated earnings and profits of the Company as
determined under United States federal income tax principles. Dividends paid
to holders that are United States corporations may qualify for the dividends-
received deduction.
24
<PAGE>
To the extent, if any, that a holder receives distributions on shares of
Common Stock that would otherwise constitute dividends for United States
federal income tax purposes but that exceeds current and accumulated earnings
and profits of the Company, such distribution will be treated first as a non-
taxable return of capital reducing the holder's basis in the shares of Common
Stock. Any such distribution in excess of the holder's basis in the shares of
Common Stock will be treated as capital gain.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO NON-U.S. HOLDERS
Interest on Debentures. Generally, interest paid on the Debentures to a Non
U.S.-Holder will not be subject to United States federal income tax if: (I)
such interest is not effectively connected with the conduct of a trade or
business within the United States by such Non-U.S. Holder; (II) the Non-U.S.
Holder does not actually or constructively own 10% or more of the total voting
power of all classes of stock of the Company entitled to vote and is not a
controlled foreign corporation with respect to which the Company is a "related
person" within the meaning of the Code; and (III) the beneficial owner, under
penalty of perjury, certifies that the owner is not a United States person and
provides the owner's name and address. If certain requirements are satisfied,
the certification described in paragraph (III) above may be provided by a
securities clearing organization, a bank, or other financial institution that
holds customers' securities in the ordinary course of its trade or business.
For this purpose, the holder of Debentures would be deemed to own
constructively the Common Stock into which it could be converted. A holder
that is not exempt from tax under these rules will be subject to United States
federal income tax withholding at a rate of 30% unless the interest is
effectively connected with the conduct of a United States trade or business,
in which case the interest will be subject to the United States federal income
tax on net income that applies to United States persons generally. Non-U.S.
Holders should consult applicable income tax treaties, which may provide
different rules.
Sale or Exchange of Debentures or Shares of Common Stock. A Non-U.S. Holder
generally will not be subject to United States federal income tax on gain
recognized upon the sale or other disposition unless (I) the gain is
effectively connected with the conduct of a trade or business within the
United States by the Non-U.S. Holder, or (ii) in the case of a Non-U.S. Holder
who is a nonresident alien individual and holds the Common Stock as a capital
asset, such holder is present in the United States for 183 or more days in the
taxable year and certain other circumstances are present. If the Company is a
"United States real property holding corporation," a Non-U.S. Holder may be
subject to federal income tax with respect to gain realized on the disposition
of such amount withheld pursuant to these rules will be creditable against
such Non U.S. Holder's United States federal income tax liability and may
entitle such Non-U.S. Holder to a refund upon furnishing the required
information to the Internal Revenue Service. Non-U.S. Holders should consult
applicable income tax treaties, which may provide different rules.
Conversion of Debentures. A Non-U.S. Holder generally will not be subject to
United States federal income tax on the conversion of a Debenture into shares
of Common Stock. To the extent a Non-U.S. Holder receives cash in lieu of a
fractional share on conversion, such cash may give rise to gain that would be
subject to the rules described above with respect to the sale or exchange of a
Debenture or Common Stock.
Dividends on Shares of Common Stock. Generally, any distribution on shares
of Common Stock to a Non-U.S. Holder will be subject to United States federal
income tax withholding at a rate of 30% unless the dividend is effectively
connected with the conduct of trade or business within the United States by
the Non-U.S. Holders, in which case the dividend will be subject to the United
States federal income tax on net income that applies to United States persons
generally (and, with respect to corporate holders and under certain
circumstances, the branch profits tax). Non-U.S. Holders should consult any
applicable income tax treaties, which may provide for a lower rate of
withholding or other rules different from those described above. A Non-U.S.
Holder may be required to satisfy certain certification requirements in order
to claim a reduction of or exemption from withholding under the foregoing
rules.
25
<PAGE>
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. Holders. Information reporting and backup withholding may apply to
payments of interest or dividends on or the proceeds of the sale or other
disposition of the Debentures or shares of Common Stock made by the Company
with respect to certain noncorporate U.S. Holders. Such U.S. holders generally
will be subject to backup withholding at a rate of 31% unless the recipient of
such payment supplies a taxpayer identification number, certified under
penalties of perjury, as well as certain other information, or otherwise
establishes, in the manner prescribed by law, an exemption from backup
withholding. Any amount withheld under backup withholding is allowable as a
credit against the U.S. holder's federal income tax, upon furnishing the
required information.
Non-U.S. Holders. Generally, information reporting and backup withholding of
United States federal income tax at a rate of 31% may apply to payments of
principal, interest and premium (if any) to Non-U.S. Holders if the payee
fails to certify that the holder is a Non-U.S. person or if the Company or its
paying agent has actual knowledge that the payee is a United States person.
The 31% backup withholding tax generally will not apply to dividends paid to
foreign holders outside the United States that are subject to 30% withholding
discussed above or that are subject to a tax treaty that reduces such
withholding.
The payment of the proceeds on the disposition of Debenture or shares of
Common Stock to or through the United States office of a United States or
foreign broker will be subject to information reporting and backup withholding
unless the owner provides the certification described above or otherwise
establishes an exemption. The proceeds of the disposition by a Non-U.S. Holder
of Debentures or share of Common Stock to or through a foreign office of a
broker will not be subject to backup withholding. However, if such broker is a
U.S. person, a controlled foreign corporation for United States tax purposes,
or a foreign person 50% or more of whose gross income from all sources for
certain periods is from activities that are effectively connected with a
United States trade or business, information reporting will apply unless such
broker has documentary evidence in its files of the owner's foreign status and
has no actual knowledge to the contrary or unless the owner otherwise
establishes an exemption. Both backup withholding and information reporting
will apply to the proceeds from such dispositions if the broker has actual
knowledge that the payee is a U.S. Holder.
LEGAL MATTERS
The validity of the issuance of the Debentures and the Conversion Shares
offered hereby will be passed upon for RoTech by Winderweedle, Haines, Ward &
Woodman, P.A., Winter Park and Orlando, Florida. William A. Walker II,
Secretary, a Director and a shareholder of the Company, is a shareholder and
officer of Winderweedle, Haines, Ward & Woodman, P.A. Such firm has acted as
counsel to the Company, its subsidiaries, and certain of its affiliates in
other matters. The Company issued options to such firm to purchase up to, but
not exceeding in the aggregate, 20,000 shares of the Company's Common Stock at
$13.88 per share. The options are exercisable until June 30, 2000.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Current Report on Form 8-K as filed with the
Commission on August 20, 1996 have been audited by Deloitte & Touche LLP,
independent certified public accountants as of July 31, 1995 and 1994 and for
each of the years ended July 31, 1995 and 1994, and by Ernst & Young LLP,
independent certified public accountants for the year ended July 31, 1993, as
stated in their reports which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firms given upon
their authority as experts in accounting and auditing.
26
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSE-
QUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 5
Ratio of Earnings to Fixed Charges......................................... 9
Use of Proceeds............................................................ 10
Description of Debentures.................................................. 10
Description of Capital Stock............................................... 19
Selling Securityholders.................................................... 20
Plan of Distribution....................................................... 22
Certain United States Federal Income Tax Consequences...................... 23
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ROTECH MEDICAL CORPORATION
$110,000,000 PRINCIPAL AMOUNT OF 5 1/4% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2003
(INTEREST PAYABLE JUNE 1 AND DECEMBER 1)
AND
4,190,476 SHARES OF
COMMON STOCK
----------------
PROSPECTUS
----------------
AUGUST , 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Company in
connection with the sale of the Debentures and the Common Stock being
registered. All amounts are estimates except the registration fee.
<TABLE>
<S> <C>
Commission Registration Fee..................................... $ 37,931.03
Printing and Engraving Expenses................................. 30,000.00
Nasdaq National Market Listing Fee.............................. 17,500.00
Legal Fees and Expenses......................................... 27,500.00
State Securities Laws Registration Fees and Expenses............ 2,000.00
Trustee's Fees.................................................. 2,500.00
Accounting Fees and Expenses.................................... 25,000.00
Miscellaneous Expenses.......................................... 15,000.00
-----------
Total......................................................... $157,431.03
===========
</TABLE>
The Selling Securityholders shall bear any underwriting discounts,
commissions and the fees and expenses of counsel to the Selling
Securityholders, and shall also bear all registration expenses to the extent
required by applicable law.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to authority contained in the laws of the state of Florida, Article
IX of the Company's Articles of Incorporation, as amended, and Article IV of
the Company's By-Laws, as amended, provide that the Company shall indemnify
each of its officers and directors, whether or not then in office, and his
executor, administrator or heirs, against any and all actual expenses actually
and necessarily incurred by him, including, but not limited to, attorney's
fees in connection with the defense of any litigation, administrative
procedure or suit to which he may have been a party because of his status as a
present or past director or officer, if he acted in good faith and in a manner
not opposed to the best interests of the Company. He shall have no right to
reimbursement, however, in relation to matters as to which he has been
adjudged liable to the Company for negligence or misconduct in the performance
of his duties unless, and to the extent that, a court of equity shall deem
such reimbursement proper in view of all the circumstances. The right to
indemnity for expenses shall also apply to expenses of suits which are
compromised or settled if the court having jurisdiction of the action shall
approve such settlement. The foregoing right of indemnification shall be in
addition to, and not exclusive of, all other rights to which such officer or
director may be entitled.
Section 607.0850(1), Florida Statutes, provides that a corporation may
indemnify any person who is or was a party to any proceeding, by reason of his
current or past status as director, officer, employee or agent of the
corporation, against liability incurred by such person if, in connection with
his activity out of which arises the indemnifiable matter, he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 607.0850(2), Florida Statutes, authorizes a corporation to indemnify
any person who is or was a party to any proceeding by or on behalf of the
corporation to procure a judgment in its favor under circumstances similar to
those identified in Section 607.0850(1) above against expenses and amounts
paid in settlement up to the estimated cost of litigation provided that no
indemnification shall be made in respect of any matter as to which the
potential indemnitee shall have been adjudged to be liable unless, and only to
the extent that, a court of competent jurisdiction shall determine that, in
view of all circumstances, the potential indemnitee is fairly and reasonably
entitled to indemnity for such expenses.
II-1
<PAGE>
Section 607.0850(7), Florida Statutes, prohibits indemnification or
advancement of expenses made to or on behalf of any director, officer or agent
of a corporation if a judgment or final adjudication establishes that his
actions, or omissions to act, were material to the matter adjudicated and
which constitute: a) a violation of the criminal law, unless he had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful; b) a transaction from which he derived an improper
personal benefit either directly or indirectly; c) in the case of a director,
a circumstance triggering the liability provisions of Section 607.0834,
dealing with dividends and distributions and/or purchases, of the
corporation's own shares; or d) willful misconduct or conscious disregard for
the best interests of the corporation in a proceeding by it or on its behalf
to procure a judgment in its favor or in a proceeding by or on behalf of a
shareholder.
Section 607.0850(9), Florida Statutes, permits courts to order
indemnification of those who are or were a party to a proceeding based on
their status as directors or officers of the corporation.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
Indenture dated as of June 1, 1996, between the Company and PNC Bank,
4.1 Kentucky, Inc.
4.2 Form of 5 1/4% Convertible Subordinated Debentures due 2003 (included
in Indenture filed as Exhibit 4.1 hereof).
4.3 Registration Rights Agreement dated as of May 24, 1996, between the
Company and Smith Barney Inc., Needham & Company, Inc. and Wheat,
First Securities, Inc.
5.1 Opinion of Winderweedle, Haines, Ward & Woodman, P.A.
12.1 Statement re: computation of ratios
23.1 Consent of Winderweedle, Haines, Ward & Woodman, P.A., counsel to the
Company (included in Exhbit 5.1)
23.2 Consent of Deloitte & Touche LLP, Independent Certified Public
Accountants
23.3 Consent of Ernst & Young LLP, Independent Certified Public Accountants
23.4 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants
23.5 Consent of Hazlett, Lewis & Bieter, PLLC, Independent Certified Public
Accountants
23.6 Consent of Tanner + Co., Independent Certified Public Accountants
23.7 Consent of LaPorte, Sehrt, Romig & Hand, a Professional Accounting
Corporation, Independent Certified Public Accountants
23.8 Consent of Dalby, Wendland & Co., P.C., Independent Certified Public
Accountants
23.9 Consent of Michael Galloway & Company, Independent Certified Public
Accountants
23.10 Consent of Hartman, Walton & Leito, L.L.P., Independent Certified
Public Accountants
24.1 Power of Attorney (included on Page II-4 of this Registration
Statement)
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of PNC Bank, Kentucky, Inc.
</TABLE>
ITEM 17. UNDERTAKINGS.
The 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 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;
II-2
<PAGE>
(2) That, for the purposes 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
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(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.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be 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.
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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
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 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 ORLANDO, STATE OF FLORIDA, ON AUGUST 27, 1996.
RoTech Medical Corporation,a Florida
Corporation
/s/ Stephen P. Griggs
By: _________________________________
STEPHEN P. GRIGGS, PRESIDENT
POWER OF ATTORNEY
We, the undersigned officers and directors of RoTech Medical Corporation,
hereby severally and individually constitute and appoint William P. Kennedy,
Stephen P. Griggs, Rebecca R. Irish and Thomas A. Simser, Jr., the true and
lawful attorneys and agents of each of us to execute in the name, place and
stead of each of us (individually and in any capacity stated below) any and
all amendments to this Registration Statement on Form S-3 and all instruments
necessary or advisable in connection therewith and to file the same with the
Securities and Exchange Commission, said attorneys and agents to have full
power and authority to do and perform in the name and on behalf of each of the
undersigned every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any of the undersigned
might or could do in person, and we hereby ratify and confirm our signatures
as they may be signed by our said attorneys and agents to any and all such
amendments and instruments.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
/s/ William P. Kennedy Chief Executive August 27, 1996
- ------------------------------------- Officer (Principal
WILLIAM P. KENNEDY Executive Officer)
and Director
/s/ Stephen P. Griggs President, Chief August 27, 1996
- ------------------------------------- Operating Officer
STEPHEN P. GRIGGS and Director
/s/ William A. Walker II Secretary and August 27, 1996
- ------------------------------------- Director
WILLIAM A. WALKER II
/s/ Leonard E. Williams Director August 27, 1996
- -------------------------------------
LEONARD E. WILLIAMS
/s/ Jack T. Weaver Director August 27, 1996
- -------------------------------------
JACK T. WEAVER
/s/ Rebecca R. Irish Treasurer and Chief August 27, 1996
- ------------------------------------- Financial Officer
REBECCA R. IRISH (Principal
Financial and
Accounting Officer)
/s/ Janet L. Ziomek Vice President, August 27, 1996
- ------------------------------------- Finance
JANET L. ZIOMEK
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
Indenture dated as of June 1, 1996, between the Company
4.1 and PNC Bank, Kentucky, Inc.
4.2 Form of 5 1/4% Convertible Subordinated Debentures due
2003 (included in Indenture filed as Exhibit 4.1
hereof).
4.3 Registration Rights Agreement dated as of May 24, 1996,
between the Company and Smith Barney Inc., Needham &
Company, Inc. and Wheat, First Securities, Inc.
5.1 Opinion of Winderweedle, Haines, Ward & Woodman, P.A.
12.1 Statement re: computation of ratios
23.1 Consent of Winderweedle, Haines, Ward & Woodman, P.A.,
counsel to the Company (included in Exhbit 5.1)
23.2 Consent of Deloitte & Touche LLP, Independent Certified
Public Accountants
23.3 Consent of Ernst & Young LLP, Independent Certified
Public Accountants
23.4 Consent of Arthur Andersen LLP, Independent Certified
Public Accountants
23.5 Consent of Hazlett, Lewis & Bieter, PLLC, Independent
Certified Public Accountants
23.6 Consent of Tanner + Co., Independent Certified Public
Accountants
23.7 Consent of LaPorte, Sehrt, Romig & Hand, a Professional
Accounting Corporation, Independent Certified Public
Accountants
23.8 Consent of Dalby, Wendland & Co., P.C., Independent
Certified Public Accountants
23.9 Consent of Michael Galloway & Company, Independent
Certified Public Accountants
23.10 Consent of Hartman, Walton & Leito, L.L.P., Independent
Certified Public Accountants
24.1 Power of Attorney (included on Page II-4 of this
Registration Statement)
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of PNC Bank, Kentucky,
Inc.
</TABLE>
<PAGE>
EXHIBIT 4.1
________________________________________________________________________________
ROTECH MEDICAL CORPORATION
and
PNC BANK, KENTUCKY, INC.,
as Trustee
____________________
INDENTURE
Dated as of June 1, 1996
____________________
$126,500,000
5 1/4% Convertible Subordinated Debentures due 2003
________________________________________________________________________________
<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<S> <C> <C>
(S) 310 (a)(1)......................................... 609
(a)(2) ............................................... 609
(a)(3) ............................................... Not Applicable
(a)(4) ............................................... Not Applicable
(a)(5) ............................................... 609
(b) ............................................... 608
(S) 311 (a)............................................ 613
(b) ............................................... 613
(S) 312 (a)............................................ 701
............................................... 702(a)
(b) ............................................... 702(b)
(c) ............................................... 702(c)
(S) 313 (a)............................................ 703(a)
(b) ............................................... 703(a)
(c) ............................................... 703(a)
(d) ............................................... 703(b)
(S) 314 (a)............................................ 704
(a)(4) ............................................... 1004
(b) ............................................... Not Applicable
(c)(1) ............................................... 102
(c)(2) ............................................... 102
(c)(3) ............................................... Not Applicable
(d) ............................................... Not Applicable
(e) ............................................... 102
(S) 315 (a)............................................ 601
(b) ............................................... 602
(c) ............................................... 601
(d) ............................................... 601
(e) ............................................... 514
(S) 316 (a)(1)(A)...................................... 502
............................................... 512
(a)(1)(B) ............................................... 513
(a)(2) ............................................... Not Applicable
(b) ............................................... 508
(c) ............................................... 104(c)
(S) 317 (a)(1)......................................... 503
(a)(2) ............................................... 504
(b) ............................................... 1003
(S) 318 (a)............................................ 107
</TABLE>
________________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
i
<PAGE>
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
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Parties................................................................... 1
Recitals of the Company................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application.............................. 1
SECTION 101. Definitions............................................ 1
"Act".................................................. 2
"Affiliate"............................................ 2
"Authenticating Agent"................................. 2
"Beneficial Owner"..................................... 2
"Board of Directors"................................... 2
"Board Resolution"..................................... 2
"Business Day"......................................... 2
"Cedel"................................................ 2
"Change in Control".................................... 3
"Closing Date"......................................... 3
"Commission"........................................... 3
"Common Stock"......................................... 3
"Company".............................................. 3
"Company Request"...................................... 3
"Corporate Trust Office"............................... 3
"Corporation".......................................... 3
"Current Market Price"................................. 3
"DTC".................................................. 4
"Defaulted Interest"................................... 4
"Definitive Security" or "Definitive Securities"....... 4
"Depositary"........................................... 4
"Euroclear"............................................ 4
"Event of Default"..................................... 4
"Exchange Act"......................................... 4
"Global Security or "Global Securities"................ 4
"Holder"............................................... 4
</TABLE>
_____________________
*Note: This table of contents shall not, for any purposes, be deemed to
be a part of the Indenture.
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<TABLE>
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"Indenture"............................................ 4
"Initial Purchasers"................................... 4
"Interest Payment Date"................................ 4
"Material Subsidiary".................................. 4
"Maturity"............................................. 4
"Officers' Certificate"................................ 5
"144A Global Note"..................................... 5
"Opinion of Counsel"................................... 5
"Outstanding".......................................... 5
"Paying Agent"......................................... 6
"Person"............................................... 6
"Predecessor Security"................................. 6
"Purchase Agreement"................................... 6
"Record Date".......................................... 6
"Redemption Date"...................................... 6
"Redemption Price"..................................... 6
"Registration Rights Agreement"........................ 6
"Regular Record Date".................................. 6
"Regulation S"......................................... 6
"Repurchase Date"...................................... 7
"Repurchase Event"..................................... 7
"Repurchase Price"..................................... 7
"Resale Restriction Termination Date".................. 7
"Responsible Officer".................................. 7
"Securities Custodian"................................. 7
"Security Register" and "Security Registrar"........... 7
"Senior Indebtedness".................................. 7
"Shelf Registration Statement.......................... 8
"Special Record Date".................................. 8
"Stated Maturity"...................................... 8
"Subsidiary"........................................... 8
"Termination of Trading"............................... 8
"Transfer Restricted Securities"....................... 8
"Trust Indenture Act".................................. 8
"Trustee".............................................. 8
"Vice President"....................................... 9
SECTION 102. Compliance Certificates and Opinions................... 9
SECTION 103. Form of Documents Delivered to Trustee................. 9
SECTION 104. Acts of Holders; Record Dates.......................... 10
SECTION 105. Notices, Etc., to Trustee and Company.................. 11
SECTION 106. Notice to Holders; Waiver.............................. 12
SECTION 107. Conflict with Trust Indenture Act...................... 12
SECTION 108. Effect of Headings and Table of Contents............... 12
SECTION 109. Successors and Assigns................................. 13
SECTION 110. Separability Clause.................................... 13
</TABLE>
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<TABLE>
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SECTION 111. Benefits of Indenture.................................. 13
SECTION 112. Governing Law.......................................... 13
SECTION 113. Legal Holidays......................................... 13
SECTION 114. No Security Interest Created........................... 13
SECTION 115. Limitation on Individual Liability..................... 14
ARTICLE TWO
Security Forms.......................... 14
SECTION 201. Forms Generally........................................ 14
SECTION 202. Form of Face of Security............................... 16
SECTION 203. Form of Reverse of Global Securities and Definitive
Security............................................... 19
SECTION 204. Form of Trustee's Certificate of Authentication........ 27
SECTION 205. Form of Trustee's Certificate of Authentication........ 27
ARTICLE THREE
The Securities.......................... 28
SECTION 301. Title and Terms........................................ 28
SECTION 302. Denominations.......................................... 29
SECTION 303. Execution, Authentication, Delivery and Dating......... 29
SECTION 304. Temporary Securities................................... 30
SECTION 305. Registration, Registration of Transfer and Exchange.... 30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities....... 39
SECTION 307. Payment of Interest; Interest Rights Preserved......... 40
SECTION 308. Persons Deemed Owners.................................. 42
SECTION 309. Cancellation........................................... 42
SECTION 310. Computation of Interest................................ 42
ARTICLE FOUR
Satisfaction and Discharge.............. 43
SECTION 401. Satisfaction and Discharge of Indenture................ 43
SECTION 402. Application of Trust Money............................. 44
SECTION 403. Reinstatement.......................................... 44
ARTICLE FIVE
Remedies................................ 45
SECTION 501. Events of Default...................................... 45
</TABLE>
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SECTION 502. Acceleration of Maturity; Rescission and
Annulment.............................................. 47
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee............................. 49
SECTION 504. Trustee May File Proofs of Claim....................... 49
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities............................................. 50
SECTION 506. Application of Money Collected......................... 50
SECTION 507. Limitation on Suits.................................... 51
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert......... 51
SECTION 509. Restoration of Rights and Remedies..................... 52
SECTION 510. Rights and Remedies Cumulative......................... 52
SECTION 511. Delay or Omission Not Waiver........................... 52
SECTION 512. Control by Holders..................................... 52
SECTION 513. Waiver of Past Defaults................................ 53
SECTION 514. Undertaking for Costs.................................. 53
ARTICLE SIX
The Trustee............................. 54
SECTION 601. Certain Duties and Responsibilities.................... 54
SECTION 602. Notice of Defaults..................................... 55
SECTION 603. Certain Rights of Trustee.............................. 55
SECTION 604. Not Responsible for Recitals or Issuance of Securities. 56
SECTION 605. May Hold Securities.................................... 56
SECTION 606. Money Held in Trust.................................... 56
SECTION 607. Compensation and Reimbursement......................... 57
SECTION 608. Disqualification; Conflicting Interests................ 58
SECTION 609. Corporate Trustee Required; Eligibility................ 58
SECTION 610. Resignation and Removal; Appointment of Successor...... 59
SECTION 611. Acceptance of Appointment by Successor................. 60
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business............................................... 60
SECTION 613. Preferential Collection of Claims Against Company...... 61
SECTION 614. Appointment of Authenticating Agent.................... 61
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company........... 63
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders................................................ 63
SECTION 702. Preservation of Information; Communication to
Holders................................................ 63
SECTION 703. Reports by Trustee..................................... 64
</TABLE>
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<TABLE>
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SECTION 704. Reports by Company..................................... 64
SECTION 705. Rule 144A Information Requirement...................... 64
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease.......... 65
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms... 65
SECTION 802. Successor Substituted.................................. 65
ARTICLE NINE
Supplemental Indentures......................... 66
SECTION 901. Supplemental Indentures Without Consent of Holders..... 66
SECTION 902. Supplemental Indentures with Consent of Holders........ 67
SECTION 903. Execution of Supplemental Indentures................... 68
SECTION 904. Effect of Supplemental Indentures...................... 68
SECTION 905. Conformity with Trust Indenture Act.................... 68
SECTION 906. Reference in Securities to Supplemental Indentures..... 68
SECTION 907. Notice of Supplemental Indenture....................... 68
ARTICLE TEN
Covenants.............................. 69
SECTION 1001. Payment of Principal, Premium and Interest............. 69
SECTION 1002. Maintenance of Office or Agency........................ 69
SECTION 1003. Money for Security Payments to Be Held in Trust........ 69
SECTION 1004. Statement by Officers as to Default.................... 71
SECTION 1005. Existence.............................................. 71
SECTION 1006. Waiver of Certain Covenants............................ 71
ARTICLE ELEVEN
Redemption of Securities........................ 71
SECTION 1101. Right of Redemption.................................... 71
SECTION 1102. Applicability of Article............................... 72
SECTION 1103. Election to Redeem; Notice to Trustee.................. 72
SECTION 1104. Selection by Trustee of Securities to be Redeemed...... 72
SECTION 1105. Notice of Redemption................................... 73
SECTION 1106. Deposit of Redemption Price............................ 73
SECTION 1107. Securities Payable on Redemption Date.................. 74
</TABLE>
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SECTION 1108. Securities Redeemed in Part............................ 74
ARTICLE TWELVE
Subordination of Securities...................... 75
SECTION 1201. Securities Subordinated to Senior Indebtedness......... 75
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc......... 75
SECTION 1203. Prior Payment to Senior Indebtedness upon
Acceleration of Securities............................. 76
SECTION 1204. No Payment When Senior Indebtedness in Default......... 77
SECTION 1205. Payment Permitted If No Default........................ 77
SECTION 1206. Subrogation to Rights of Holders of Senior
Indebtedness........................................... 77
SECTION 1207. Provisions Solely to Define Relative Rights............ 78
SECTION 1208. Trustee to Effectuate Subordination.................... 78
SECTION 1209. No Waiver of Subordination Provisions.................. 78
SECTION 1210. Notice to Trustee...................................... 79
SECTION 1211. Reliance on Judicial Order or Certificate of
Liquidating Agent....................................... 80
SECTION 1212. Trustee Not Fiduciary for Holders of Senior
Indebtedness........................................... 80
SECTION 1213. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's Rights......... 80
SECTION 1214. Article Applicable to Paying Agents.................... 81
SECTION 1215. Certain Conversions Deemed Payment..................... 81
SECTION 1216. No Suspension of Remedies.............................. 81
ARTICLE THIRTEEN
Conversion of Securities........................ 82
SECTION 1301. Conversion Privilege and Conversion Price.............. 82
SECTION 1302. Exercise of Conversion Privilege....................... 82
SECTION 1303. Fractions of Shares.................................... 83
SECTION 1304. Adjustment of Conversion Price......................... 83
SECTION 1305. Notice of Adjustments of Conversion Price.............. 90
SECTION 1306. Notice of Certain Corporate Action..................... 90
SECTION 1307. Company to Reserve Common Stock........................ 91
SECTION 1308. Taxes on Conversions................................... 92
SECTION 1309. Covenant as to Common Stock............................ 92
SECTION 1310. Cancellation of Converted Securities................... 92
SECTION 1311. Provisions of Consolidation, Merger or Sale of Assets.. 92
SECTION 1312. Trustee's Disclaimer................................... 93
</TABLE>
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ARTICLE FOURTEEN
Right to Require Repurchase....................... 93
SECTION 1401. Right to Require Repurchase............................ 93
SECTION 1402. Notice; Method of Exercising Repurchase Right.......... 94
SECTION 1403. Deposit of Repurchase Price............................ 95
SECTION 1404. Securities Not Repurchased on Repurchase Date.......... 95
SECTION 1405. Securities Repurchased in Part......................... 95
SECTION 1406. Certain Definitions.................................... 95
</TABLE>
viii
<PAGE>
INDENTURE, dated as of June 1, 1996 between ROTECH MEDICAL
CORPORATION, a corporation duly organized and existing under the laws of the
State of Florida (herein called the "Company"), having its principal executive
offices at 4506 L.B. McLeod Road, Suite F, Orlando, Florida 32811, and PNC Bank,
Kentucky, Inc., a Kentucky banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5 1/4%
Convertible Subordinated Debentures due 2003 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
1
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principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required and permitted hereunder shall mean such accounting
principles as are generally accepted and accepted and adopted by the
Company at the date of this Indenture; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms used in Articles Twelve, Thirteen and Fourteen are
defined in such Articles.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"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" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
The term "Beneficial Owner" is determined in accordance with Rule 13d-
3, promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York or
the city in which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Cedel" means Cedel Bank societe anonyme.
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"Change in Control" has the meaning specified in Section 1406.
"Closing Date" means May 30, 1996.
"Commission" means the Securities and Exchange Commission as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Section 1311, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock of the Company
at the date of this Indenture or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided, that if at any time there
--------
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its 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 in
Louisville, Kentucky, which initially shall be 500 West Jefferson Street,
Louisville, Kentucky 40202, and in the State of New York shall be at the offices
of its agent, DTC, which initially shall be 55 Water Street, New York, New York
10041, at which at any particular time its corporate trust business shall
principally be administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Current Market Price" has the meaning specified in Section 1304.
3
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"DTC" has the meaning specified in Section 305.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Security" or "Definitive Securities" means a Security or
Securities that are in the form of the Security set forth in Sections 202 and
203 hereof, containing the legend specified for a Definitive Security and not
including the additional language referred to in footnote 1 or the additional
schedule referred to in footnote 2.
"Depositary" has the meaning specified in Section 305.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security or "Global Securities" means a Security or Securities
in the form of the Security set forth in Sections 202, 203 and 204 hereof
containing the legend specified for a Global Security, the additional language
referred to in footnote 1 and the additional schedule referred to in footnote 2.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means Smith Barney Inc., Needham & Company, Inc.,
and Wheat First Securities, Inc..
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Securities.
"Material Subsidiary" means a Subsidiary meeting the definition of
"significant subsidiary" as defined in Section 1-02(w) of Regulation S-X under
the Securities Act.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein
4
<PAGE>
provided, whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Officers' Certificate" means a certificate, in form reasonably
satisfactory to the Trustee, signed by the Chairman of the Board, the Chief
Executive Officer, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company.
"144A Global Note" has the meaning specified in Section 201.
"Opinion of Counsel" means a written opinion, in form reasonably
satisfactory to the Trustee, of counsel, who may be counsel for or an employee
of the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount have been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Securities;
provided, that if such Securities, or portions thereof, are to be redeemed,
--------
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in
5
<PAGE>
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means that certain Purchase Agreement dated May
24, 1996 between the Company and the Initial Purchasers.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture on the applicable Redemption Date.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated as of May 24, 1996 between the Company and the Initial
Purchasers.
"Regular Record Date", for the interest payable on any Interest
Payment Date means May 15 or November 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act of 1933, as
amended.
6
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"Regulation S Global Security" has the meaning specified in Section
201.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Event" has the meaning specified in Section 1406.
"Repurchase Price" has the meaning specified in Section 1401.
"Resale Restriction Termination Date" means, with respect to any
Security, the date which is three years after the later of (i) the original
issue date of such Security and (ii) the last date on which the Company or any
Affiliate of the Company was the owner of such Security (or any Predecessor
Security).
"Responsible Officer" means, when used with respect to the Trustee,
the chairman of the Board of Directors, any vice chairman of the Board of
Directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any vice
president (whether or not designated by numbers or words added before or after
the title "vice president"), the cashier, the secretary, the treasurer, any
trust officer, any assistant trust officer, any assistant cashier, any assistant
secretary, any assistant treasurer, or any other officer or assistant officer of
the Trustee customarily performing functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (a) all indebtedness (whether secured or unsecured) of the Company
for money borrowed under the Company's primary revolving credit and line of
credit facilities and any predecessor or successor credit facilities thereto,
whether outstanding on the date of execution of the Indenture (such as the
Company's revolving credit and line of credit facility of $150.0 million, any
increase in the maximum principal amount thereof and any predecessor or
successor facilities thereto) or thereafter created, incurred or assumed, (b)
all secured indebtedness of the Company for money borrowed, whether outstanding
on the date of execution of the Indenture or thereafter created, incurred or
assumed, except any such other indebtedness that by the terms of the instrument
or instruments by which such indebtedness was created or incurred expressly
provides that it (i) is junior in right of payment to the Debentures or (ii)
ranks pari passu in right of payment with the Debentures, and (c) any
amendments, renewals, extensions, modifications, refinancings and refundings of
the foregoing. For the purposes of this
7
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definition, "indebtedness for money borrowed" when used with respect to the
Company means (i) any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money (including without limitation fees,
penalties or other obligations in respect thereof), whether or not evidenced by
bonds, debentures, notes or other written instruments, (ii) any deferred payment
obligation of, or any such obligation guaranteed by, the Company for the payment
of the purchase price of property or assets evidenced by a note or similar
instrument, and (iii) any obligation of, or any such obligation guaranteed by,
the Company for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Company under generally accepted
accounting principles.
"Shelf Registration Statement" means the Registration Statement with
respect to the Common Stock the Issuer is required to file pursuant to the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such instalment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Termination of Trading" has the meaning specified in Section 1406.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 305 hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 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 such successor Trustee.
8
<PAGE>
"Vice President", when used with respect to the Company means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual or firm signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual or such
firm, he has or they have made such examination or investigation as is
necessary to enable him or them to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any Person may certify to
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certification or opinion of, or
representations
9
<PAGE>
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate of public officials or upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior
10
<PAGE>
to such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first solicitation or vote, as
the case may be. With regard to any record date, only the Holders on such date
(or their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action. Notwithstanding the foregoing, the Company shall not
set a record date for, and the provisions of this paragraph shall not apply with
respect to, any Act by the Holders pursuant to Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or at any other address previously furnished in
writing to the Holders and the Company by the Trustee; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company,
addressed to it at the address of its principal executive offices specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, registered or certified with postage prepaid, if
mailed; when answered back
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if telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by nationally recognized overnight
air courier guaranteeing next day delivery.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing to each Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. All
such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, registered or certified with postage prepaid, if mailed;
when answered back if telexed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by nationally
recognized overnight air courier guaranteeing next day delivery.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act or another provision that would be required
or deemed under such Act to be a part of and govern this Indenture if this
Indenture were subject thereto, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind each of their respective successors and assigns, whether so
expressed or not.
SECTION 110. Separability Clause.
-------------------
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 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the Holders of Securities and, with respect to Article Twelve, the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, but without regard to the
principles of conflicts of laws thereof.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal and premium if any, or conversion of the Securities need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on such last day for conversion; provided, that no
--------
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to the next succeeding
Business Day.
SECTION 114. No Security Interest Created.
----------------------------
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
13
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SECTION 115. Limitation on Individual Liability.
----------------------------------
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
---------------
The Securities and the Trustee's certificate of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any organizational document, any applicable law or with
the rules of any securities exchange on which the Securities are listed or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The Securities issued in definitive form shall be substantially in the
form set forth in Section 202 hereof.
Unless issued in definitive form, Securities issued and sold in
reliance on Rule 144A shall be issued in the form of one or more global
securities (the "144A Global Security"), the face of which shall be
substantially in the form set forth in Section 202
14
<PAGE>
hereof and the reverse of which shall be substantially in the form set forth in
Section 203 hereof, which 144A Global Security shall be deposited on behalf of
the holders of the Securities represented thereby with the Trustee, as custodian
for the Depositary, and registered in the name of the nominee of the Depositary,
duly executed by the Company and authenticated as provided for herein.
Securities offered and sold outside the United States in reliance on
Regulation S may be evidenced in the form of one or more permanent global
Securities (the "Regulation S Global Security"), the face of which shall be
substantially in the form set forth in Section 202 hereof and the reverse of
which shall be substantially in the form set forth in Section 203 hereof, which
Regulation S Global Security shall be deposited on behalf of the holders of the
Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee or an authenticating
agent as provided herein, for credit to the accounts of the respective
depositaries for Euroclear and Cedel (or such other accounts as they may
direct). Prior to or on the 40th day after the later of the commencement of the
offering of the Securities and the Closing Date (the "Restricted Period"),
beneficial interests in the Regulation S Global Security may only be held
through Morgan Guaranty Trust Company of New York, Brussels office, as operator
of Euroclear or Cedel or another agent member of Euroclear and Cedel acting for
and on behalf of them, unless delivery is made though the 144A Global Security
in accordance with the certification requirements hereof. During the Restricted
Period, interests in the Regulation S Global Security may be exchanged for
interests in the Restricted Global Security or for Definitive Securities only in
accordance with the certification requirements described in Section 305 below.
Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof.
The Definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
15
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SECTION 202. Form of Face of Security.
------------------------
LEGENDS FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY
BELIEVES IS A
16
<PAGE>
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE THEN HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
LEGENDS FOR DEFINITIVE SECURITY:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM
17
<PAGE>
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF
THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
ROTECH MEDICAL CORPORATION
___% Convertible Subordinated Debentures due 2003
No. ________ $__________
RoTech Medical Corporation, a corporation duly organized and existing
under the laws of the State of Florida (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________________, or
registered assigns, the principal sum of ________________ Dollars [OR SUCH
GREATER OR LESSER AMOUNT AS INDICATED ON THE SCHEDULE OF EXCHANGES OF SECURITIES
ON THE REVERSE HEREOF]/1/ on June 1, 2003, and to pay interest thereon from the
date of original issuance of Securities pursuant to the Indenture or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, semi-annually on June 1 and December 1 in each year,
commencing December 1, 1996, at the rate of 5 1/4% per annum, until the
principal hereof is paid or made available for payment and promises to pay any
liquidated damages which may be payable pursuant to Section 4 of the
Registration Rights Agreement on the Interest Payment Dates. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be May 15 or
November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose
_________________
/1/ This phrase should be included only if the Security is issued in
global form.
18
<PAGE>
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture. Notice of a
Special Record Date shall be given to Holders of Securities not less than 10
days prior to such Special Record Date. Payment of the principal of and
premium, if any, and interest on this Security will be made (i) in respect of
Securities held of record by the Depositary or its nominee in same day funds on
or prior to the respective payment dates and (ii) in respect of Securities held
of record by Holders other than the Depositary or its nominee at the office or
agency of the Company maintained for that purpose pursuant to Section 1002 of
the Indenture, in each case in such coin or currency of the United States of
America as of the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
-------- -------
interest in respect of Securities held of record by Holders other than the
Depositary or its nominee may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________________ ROTECH MEDICAL CORPORATION
By ____________________
Attest:
________________________
SECTION 203. Form of Reverse of Global Securities and Definitive Security.
------------------------------------------------------------
This Security is one of a duly authorized issue of Securities of the
Company designated as its 5 1/4% Convertible Subordinated Debentures due 2003
(herein called the "Securities"), limited in aggregate principal amount to
$126,500,000 (including
19
<PAGE>
Securities issuable pursuant to the Initial Purchasers' over-allotment option,
as provided for in the Purchase Agreement dated May 24, 1996 between the Company
and the Initial Purchasers), issued and to be issued under an Indenture, dated
as of June 1, 1996 (herein called the "Indenture"), between the Company and PNC
Bank, Kentucky, Inc., as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
the 60th day following the date of original issuance of Securities pursuant to
the Indenture and on or before the close of business on June 1, 2003, or in case
this Security or a portion hereof is called for redemption, then in respect of
this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the second business day preceding the Redemption Date, to convert
this Security (or any portion of the principal amount hereof which is $1,000 or
an integral multiple thereof), at the principal amount hereof, or of such
portion, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock at a conversion
price equal to $______ principal amount for each share of Common Stock (or at
the current adjusted conversion price if an adjustment has been made as provided
in the Indenture) by surrender of this Security, duly endorsed or assigned to
the Company or in blank, to the Company at its office or agency maintained for
that purpose pursuant to Section 1002 of the Indenture, accompanied by written
notice to the Company in the form provided in this Security (or such other
notice as is acceptable to the Company) that the Holder hereof elects to convert
this Security, or if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted, and, in case such surrender shall
be made during the period from the opening of business on any Regular Record
Date next preceding any Interest Payment Date to the close of business on such
Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption), also accompanied by payment in New
York Clearing House funds, or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
instalment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made upon conversion on account of any interest
accrued hereon or on account of any dividends on the Common Stock issued upon
conversion. No fractional shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional share the Company shall
pay a cash adjustment as provided in the Indenture. The
20
<PAGE>
conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale or transfer of all or
substantially all of the assets of the Company, the Indenture shall be amended,
without the consent of any Holders of Securities, so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger,
sale or transfer by a holder of the number of shares of Common Stock into which
this Security might have been converted immediately prior to such consolidation,
merger, sale or transfer (assuming such holder of Common Stock failed to
exercise any rights of election and received per share the kind and amount
received per share by a plurality of non-electing shares).
The Securities are subject to redemption upon not less than 15 and not
more than 60 days' notice by mail, at any time on or after June 4, 1999, as a
whole or in part, at the election of the Company, at the Redemption Prices set
forth below (expressed as percentages of the principal amount), plus accrued
interest to the Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning June 1, in the year
indicated (June 4, in the case of 1999), the redemption price shall be:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----------- ---- -----------
<S> <C> <C> <C>
1999... 103.00% 2001.... 101.50%
2000.... 102.25% 2002.... 100.75%
</TABLE>
In certain circumstances involving the occurrence of a Repurchase
Event (as defined in the Indenture), the Holder hereof shall have the right to
require the Company to repurchase this Security at 100% of the principal amount
hereof, together with accrued interest to the Repurchase Date, but interest
installments whose Stated Maturity is on or prior to such Repurchase Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
In the event of redemption or conversion of this Security in part
only, a new Security or Securities for the unredeemed or unconverted portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
21
<PAGE>
The indebtedness evidenced by this Security is, in all respects,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness, and this Security is issued subject to the provisions of
the Indenture with respect thereto. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding, and, under certain limited circumstances, by the Company and the
Trustee without the consent of the Holders. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
22
<PAGE>
The Securities are issuable only in fully registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange except as provided in the Indenture, and the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, except as provided in this Security, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
[FORM OF CONVERSION NOTICE]
TO ROTECH MEDICAL CORPORATION
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for a fractional share and any Security representing
any unconverted principal amount hereof, be issued and delivered to the
registered owner hereof unless a different name has been provided below. If
this Notice is being delivered on a date after the close of business on a
Regular Record Date and prior to the close of business on the related Interest
Payment Date, this Notice is accompanied by payment in New York Clearing House
funds, or other funds acceptable to the Company, of an amount equal to the
interest payable on such Interest Payment Date on the principal of this Security
to be converted (unless this Security has been called for redemption). If
shares or any portion of this Security not converted are to be issued in the
name of a person other than the undersigned, the
23
<PAGE>
undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest accompanies
this Security.
Dated: _________________________
_________________________
Signature(s)
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a
national stock exchange if shares of Common Stock
are to be delivered, or Securities to be issued, other
than to and in the name of the registered owner.
______________________________
Signature Guarantee
Fill in for registration of shares of Common Stock if they are to be delivered,
or Securities if they are to be issued, other than to and in the name of the
registered owner:
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted (if less
than all):
$_________,000
___________________________
Social Security or other Taxpayer
Identification Number of owner
24
<PAGE>
[ASSIGNMENT FORM]
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date: ________________ Your signature: _________________________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:____________________________________________________________
25
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you wish to have this Security purchased by the Company pursuant to
Section 1401 of the Indenture, check the Box: [__]
If you wish to have a portion of this Security (which is $1,000 or an
integral multiple thereof) purchased by the Company pursuant to Section 1401 of
the Indenture, state the amount you wish to have purchased:
$____________________
Date: ___________________ Your Signature(s): ___________________
Tax Identification No.: ___________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee: __________________________________________
26
<PAGE>
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES/2/]
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global Security signatory of
Amount of this Amount of this following such Trustee or
Date of Global Global decrease (or Securities
Exchange Security Security increase) Custodian
- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
SECTION 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
PNC Bank, Kentucky, Inc.,
as Trustee
By ____________________________
Authorized Signatory
SECTION 205. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
__________________
/2/ This Schedule should be included only if the Security is issued in
global form.
27
<PAGE>
This is one of the Securities referred to in the within-mentioned
Indenture.
PNC Bank, Kentucky, Inc.,
as Trustee
By ____________________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $126,500,000
(including $16,500,000 aggregate principal amount of Securities that may be sold
to the Initial Purchasers by the Company upon exercise of the over-allotment
option granted pursuant to the Purchase Agreement), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906,
1108, 1302 or 1405.
The Securities shall be known and designated as the "5 1/4%
Convertible Subordinated Debentures due 2003" of the Company. Their Stated
Maturity shall be June 1, 2003 and they shall bear interest at the rate of 5
1/4% per annum, from the date of original issuance of Securities pursuant to
this Indenture or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, as the case may be, payable semi-annually on
June 1 and December 1, commencing December 1, 1996, until the principal thereof
is paid or made available for payment.
The principal of and premium, if any, and interest on the Securities
shall be payable (i) in respect of Securities held of record by the Depositary
or its nominee in same day funds on or prior to the respective payment dates and
(ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee at the office or agency of the Company maintained for
such purpose pursuant to Section 1002; provided, however, that at the option of
-------- -------
the Company payment of interest to Holders of record other than the Depositary
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register.
The Securities shall be subject to the transfer restrictions set forth
in Section 305.
The Securities shall be redeemable as provided in Article Eleven.
28
<PAGE>
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the
Holder as provided in Article Fourteen.
SECTION 302. Denominations.
-------------
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under its corporate seal or a facsimile thereof reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall either at one time or from time to time pursuant
to such instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Such Company Order
shall specify the amount of Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated, and shall certify that
all conditions precedent to the issuance of such Securities contained in this
Indenture have been complied with. The aggregate principal amount of Securities
Outstanding at any time may not exceed the amount set forth above except as
provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence,
29
<PAGE>
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of the Indenture. The
Trustee may appoint an Authenticating Agent pursuant to the terms of Section
614.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the Definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed
by the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the Definitive Security or Securities in lieu of which it is issued.
If temporary Securities are issued, the Company will cause Definitive
Securities to be prepared without unreasonable delay. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more Definitive Securities of a like
principal amount of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as Definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided. At all reasonable
times the Security Register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the Global Security(ies).
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Security(ies).
30
<PAGE>
(b) With respect to the transfer and exchange of Definitive
Securities, when Definitive Securities are presented to the Security Registrar
with the request (x) to register the transfer of the Definitive Securities or
(y) to exchange such Definitive Securities for an equal principal amount of
Definitive Securities of other authorized denominations, the Security Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; provided, however, that the
-------- -------
Definitive Securities presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Security Registrar
duly executed by the Holder thereof or by its attorney, duly
authorized in writing; and
(ii) shall, in the case of Transfer Restricted Securities that
are Definitive Securities, be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered
to the Security Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit A
hereto); or
(B) if such Transfer Restricted Security is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in reliance on Rule 144A under the
Securities Act or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act
or pursuant to an effective registration statement under the
Securities Act, a certification to that effect (in substantially
the form of Exhibit A hereto) and, in the case of a transfer in
accordance with Rule 144 or Regulation S under the Securities
Act, an Opinion of Counsel reasonably acceptable to the Company
and to the Security Registrar to the effect that such transfer is
in compliance with the Securities Act; or
(C) if such Transfer Restricted Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit A hereto) and an
Opinion of Counsel reasonably acceptable to the Company and to
the Security Registrar to the effect that such transfer is in
compliance with the Securities Act.
31
<PAGE>
(c) The following restrictions apply to any transfer of a Definitive
Security for a beneficial interest in a 144A Global Security. A Definitive
Security may not be exchanged for a beneficial interest in a 144A Global
Security except until and upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A
hereto, that such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an endorsement on
the 144A Global Security to reflect an increase in the aggregate
principal amount of the Securities represented by the 144A Global
Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the 144A Global Security
to be increased accordingly. If no 144A Global Securities are then outstanding,
the Company shall execute and, upon receipt of an authentication order in the
form of a Company Order in accordance with Section 303, the Trustee shall
authenticate a new 144A Global Security in the appropriate principal amount.
(d) The following restrictions apply to any transfer of a Definitive
Security for a beneficial interest in a Regulation S Global Security. A
Definitive Security may not be exchanged for a beneficial interest in a
Regulation S Global Security except until and upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A
hereto, that such Definitive Security is being transferred in
accordance with Regulation S; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an endorsement on
the Regulation S Global Security to reflect an increase in the
aggregate
32
<PAGE>
principal amount of the Securities represented by the Regulation S
Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Regulation S Global
Security to be increased accordingly. If no Regulation S Global Securities are
then outstanding, the Company shall execute and, upon receipt of an
authentication order in the form of a Company Order in accordance with Section
303, the Trustee shall authenticate a new Regulation S Global Security in the
appropriate principal amount.
(e) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance with
this Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(f) With respect to the transfer of a beneficial interest in a 144A
Global Security for a Definitive Security:
(i) Any person having a beneficial interest in a
144A Global Security may upon request exchange such beneficial
interest for a Definitive Security. Upon receipt by the Trustee of
written instructions or such other form of instructions as is
customary for the Depositary or its nominee on behalf of any person
having a beneficial interest in a 144A Global Security constituting a
Transfer Restricted Security only, and receipt by the Trustee of the
following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification from such person to that effect
(in substantially the form of Exhibit A hereto); or
(B) if such beneficial interest is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act
or pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit A hereto) and,
in the case of a transfer in accordance with Rule 144 or
Regulation S under the Securities Act, an Opinion of Counsel
reasonably acceptable to the Company
33
<PAGE>
and to the Security Registrar to the effect that such transfer is
in compliance with the Securities Act; or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect from the transferee or transferor (in substantially the
form of Exhibit A hereto) and an Opinion of Counsel from the
transferee or transferor reasonably acceptable to the Company and
to the Security Registrar to the effect that such transfer is in
compliance with the Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, the aggregate principal amount of the Global Security to be
reduced and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of a Company Order
in accordance with Section 303, the Trustee will authenticate and
deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a 144A Global Security pursuant to this Section
305 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive Securities to the
persons in whose names such Securities are so registered.
(g) With respect to the transfer of a beneficial interest in a
Regulation S Global Security for a beneficial interest in a 144A Global
Security, any person having a beneficial interest in a Regulation S Global
Security may upon request exchange such beneficial interest for an interest in a
144A Global Security. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depositary or its
nominee on behalf of any person having a beneficial interest in a Regulation S
Global Security constituting a Transfer Restricted Security only, and receipt by
the Trustee of the following additional information and documents (all of which
may be submitted by facsimile):
(i) instructions given in accordance with the procedures of
Euroclear or Cedel, the Depositary and the Securities Custodian, as
the case may be, from or on behalf of a beneficial owner of an
interest in the Regulations S Global Security directing the Trustee,
as transfer agent, to credit or cause to be credited a beneficial
interest in the 144A Global
34
<PAGE>
Security in an amount equal to the beneficial interest in the
Regulation S Global Security to be exchanged or transferred,
(ii) a written order given in accordance with the procedures of
Euroclear or Cedel, the Depositary and the Securities Custodian, as
the case may be, containing information regarding the account with the
Depositary to be credited with such increase and the name of such
account, and
(iii) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act,
a certification to that effect from the transferor (in substantially
the form of Exhibit A hereto),
then the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the Regulation S Global Security by the aggregate principal amount of the
beneficial interest in such Regulation S Global Security to be exchanged or
transferred, and the Trustee, as transfer agent, shall promptly deliver
appropriate instructions to the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, concurrently with such reduction, increase
or reflect on its records an increase of the principal amount of the 144A Global
Security by the aggregate principal amount of the beneficial interest in the
Regulation S Global Security to be so exchanged or transferred, and to credit or
cause to be credited to the account of the person specified in such instructions
a beneficial interest in the 144A Global Security equal to the reduction in the
principal amount of the Regulation S Global Security.
(h) With respect to the transfer of a beneficial interest in a 144A
Global Security for a beneficial interest in a Regulation S Global Security, any
person having a beneficial interest in a 144A Global Security may upon request
exchange such beneficial interest for an interest in a Regulation S Global
Security. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary or its nominee on behalf
of any person having a beneficial interest in a 144A Global Security
constituting a Transfer Restricted Security only, and receipt by the Trustee of
the following additional information and documents (all of which may be
submitted by facsimile):
(i) instructions given in accordance with the procedures of the
Depositary and the Securities Custodian, as the case may be, from or
on behalf of a holder of a beneficial interest in the 144A Global
Security, directing the Trustee, as transfer agent, to credit or cause
to be credited a beneficial interest in the Regulation S Global
Security in an amount equal to the beneficial interest in the 144A
Global Security to be exchanged or transferred,
35
<PAGE>
(ii) a written order given in accordance with the procedures of
the Depositary and the Securities Custodian, as the case may be,
containing information regarding the Euroclear or Cedel account to be
credited with such increase and the name of such account, and
(iii) if such beneficial interest is being transferred pursuant
to an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to
that effect from the transferor (in substantially the form of Exhibit
A hereto) and, in the case of a transfer in accordance with Rule 144
or Regulation S under the Securities Act, an Opinion of Counsel
reasonably acceptable to the Company and to the Security Registrar to
the effect that such transfer is in compliance with the Securities
Act,
then the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the 144A Global Security by the aggregate principal amount of the beneficial
interest in such 144A Global Security to be so exchanged or transferred from the
relevant participant, and the Trustee, as transfer agent, shall promptly deliver
appropriate instructions to the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, concurrently with such reduction, to
increase or reflect on its records an increase of the principal amount of such
Regulation S Global Security by the aggregate principal amount of the beneficial
interest in such 144A Global Security to be so exchanged or transferred, and to
credit or cause to be credited to the account of the person specified in such
instructions (who shall be Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear or Cedel or another agent member of Euroclear
or Cedel, or both, as the case may be, acting for and on behalf of them) a
beneficial interest in such Regulation S Global Security equal to the reduction
in the principal amount of such 144A Global Security.
(i) Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in subsection (g) of this Section 305), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(j) The following relates to the authentication of Definitive
Securities in absence of the Depositary. If at any time: (i) the Depositary for
the Securities notifies the Company that the Depositary is unwilling or unable
to continue as Depositary for the Global Securities and a successor Depositary
for the Global Securities is not appointed by the Company within 90 days after
delivery of such notice; or (ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of Definitive
Securities under this Indenture, then the Company will execute,
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<PAGE>
and the Trustee, upon receipt of a Company Order in accordance with Section 303
requesting the authentication and delivery of Definitive Securities, will
authenticate and deliver Definitive Securities, in an aggregate principal amount
equal to the principal amount of the Global Securities, in exchange for such
Global Securities.
(k) (i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE
HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
37
<PAGE>
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS SECURITY AFTER THE
RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act (including
the Shelf Registration Statement):
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Security Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for
a Definitive Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such
Transfer Restricted Security; provided, however, that with
-------- -------
respect to a transfer made in reliance upon Rule 144 or an
effective registration statement, the Holders thereof shall
certify in writing to the Security Registrar that such request is
being made pursuant to Rule 144 or an effective registration
statement (such Certification to be substantially in the form of
Exhibit A hereto) and, in the case of a transfer made in reliance
upon Rule 144, shall be accompanied by an Opinion of Counsel
reasonably acceptable to the Company and to the Security
Registrar to the effect that such transfer is in compliance with
the Securities Act; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth
in (i) above (such sales or transfers being subject only to the
provisions of Section 305(d) hereof); provided, however, that
-------- -------
with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Security for
a Definitive Security that does not bear a legend, which request
is made in reliance upon Rule 144 or an effective registration
statement, the Holder thereof shall certify in writing to the
Security Registrar that such request is being made pursuant to
Rule 144 or an effective registration statement (such
certification to be substantially in the form of Exhibit A
hereto) and, in the case of a transfer made in reliance upon Rule
144, shall be accompanied by an Opinion of Counsel reasonably
acceptable to the Company and to the Security Registrar to the
effect that such transfer is in compliance with the Securities
Act.
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(l) At such time as all beneficial interests in a Global Security
have either been exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and cancelled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or cancelled, the principal amount of Securities represented by such
Global Security shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of the
Trustee, to reflect such reduction.
(m) All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
To permit registrations of transfer and exchanges, the Company shall
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Security Registrar's request.
No service charge to a Holder shall be made for any registration of
transfer or exchange of Securities except as provided in Section 306. The
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
304, 905, 1108 or 1302 not involving any transfer.
The Company or the Security Registrar shall not be required (i) to
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities selected for redemption under Section 1104
and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Definitive Security or beneficial
interest in any Global Security so selected for redemption in whole or in part,
except the unredeemed portion of any Definitive Security being redeemed in part.
SECTION 306. 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 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
39
<PAGE>
Security has been acquired by a bona fide purchaser, the Company shall execute
and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding. The Trustee may charge the
Company for the Trustee's expenses in replacing such Security.
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 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 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.
SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest. Payment
of interest will be made (i) in respect of Securities held by the Depositary or
its nominee, in same day funds on or prior to the respective Interest Payment
Dates and (ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee, at the office of the Trustee in New York, New York or
at such other office or agency of the Company as it shall maintain for that
purpose pursuant to Section 1002, provided, however, that, at the option of the
-------- -------
Company, interest on any Security held of record by Holders other than the
Depositary or its nominee may be paid by mailing checks to the addresses of the
Holders thereof as such addresses appear in the Securities Register.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date
40
<PAGE>
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated
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Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date provided, however, that Securities so
-------- -------
surrendered for conversion shall (except in the case of Securities or portions
thereof called for redemption) be accompanied by payment in New York Clearing
House funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount being
surrendered for conversion. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as expressly provided for in this Article Four), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) 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
(iv) are delivered to the Trustee for Conversion in
accordance with Article Thirteen,
and the Company, in the case of (i), (ii), (iii) or (iv) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in cash sufficient
(without consideration of any investment of such cash) to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation for principal and premium,
if any, and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case
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<PAGE>
may be; provided that the Trustee shall have been irrevocably
--------
instructed to apply such amount to said payments with respect to the
Securities;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) 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
following rights or obligations under the Securities and this Indenture shall
survive until otherwise terminated or discharged hereunder: (a) Article
Thirteen, Article Fourteen and the Company's obligations under Sections 304,
305, 306, 1002 and 1003, in each case with respect to any Securities described
in subclause (B) of Clause (1) of this Section, (b) this Article Four, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including the obligations of the Company to the Trustee under Section 607, and
the obligations of the Trustee to any Authenticating Agent under Section 614 and
(d) if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the rights of Holders of any Securities
described in subclause (B) of Clause (1) of this Section to receive, solely from
the trust fund described in such subclause (B), payments in respect of the
principal of, and premium (if any) and interest on, such Securities when such
payment are due.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 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 premium, if
any, and interest for whose payment such money has been deposited with the
Trustee. All moneys deposited with the Trustee pursuant to Section 401 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
SECTION 403. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Four until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with
44
<PAGE>
respect to the Securities; provided, however, that if the Company makes any
-------- -------
payment of principal of or any premium or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of the Securities to receive such payment from the money so held
in trust.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body);
(1) default in the payment of the principal of or premium, if any, on
any Security at its Maturity, whether or not such payment is prohibited by
the provisions of Article Twelve; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, whether or not such payment is prohibited by the
provisions of Article Twelve, and continuance of such default for a period
of 30 days; or
(3) failure to provide timely notice of a Repurchase Event as required
in accordance with the provisions of Article Fourteen; or
(4) default in the payment of the Repurchase Price in respect of any
Security on the Repurchase Date therefor in accordance with the provisions
of Article Fourteen, whether or not such payment is prohibited by the
provisions of Article Twelve; or
(5) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the Outstanding
Securities 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
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(6) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Subsidiary or under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any Subsidiary, whether such indebtedness now exists or
shall hereafter be created, which default shall constitute a failure to pay
the principal of indebtedness in excess of $5,000,000 when due and payable
after the expiration of any applicable grace period with respect thereto or
shall have resulted in indebtedness in excess of $5,000,000 becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 30 days after there shall have been given, by registered
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 a written notice specifying such default and
requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" hereunder; or
(7) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Material
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company or any Material
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or any Material Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or any Material Subsidiary or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 90 consecutive days; or
(8) the commencement by the Company or any Material Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect of
the Company or any Material Subsidiary in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the
46
<PAGE>
Company or any Material Subsidiary or of any substantial part of its
property, or the making by it of a general assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company or any Material Subsidiary in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501, a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the close of business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such Holders remain Holders after such record
date: provided, that unless such Notice of Default shall have become effective
--------
by virtue of the Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Notice of
Default shall automatically and without any action by any Person be canceled and
of no further force or effect.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than as specified in subparagraph (7) or
(8) of Section 501) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities 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 plus
any interest accrued on the securities to the date of declaration shall become
immediately due and payable. If an Event of Default specified in subparagraph
(7) or (8) of Section 501 occurs and is continuing, then the principal of,
premium, if any, and accrued and unpaid interest, if any, on all of the
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 of
Securities.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
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(B) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee and each predecessor
Trustee, their respective agents and counsel hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and each predecessor Trustee, their respective agents and
counsel;
and
(2) all Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that has become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 502,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities
entitled to join in such declaration, or rescission and annulment, as the case
may be, which record date shall be the close of business on the day the Trustee
receives such declaration, or rescission and annulment, as the case may be. The
Holders of Outstanding Securities on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or not such Holders
remain Holders after such record date; provided, that unless such declaration,
--------
or rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities on
such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such declaration, or rescission
and annulment, as the case may be, shall automatically and without any action by
any Person be canceled and of no further force or effect.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) 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
(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
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 premium, if any, and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium, if any, and on any overdue interest, at the rate
borne by the 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 and
each predecessor Trustee, their respective agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 607.
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 and may
prosecute any such proceeding to judgment or final decree, and may enforce the
same against the Company (or any other obligor upon the Securities) and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company (or any other obligor upon the Securities),
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
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 504. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have the claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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,
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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 and
each predecessor Trustee for the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and their
respective agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture 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; provided,
--------
however, that the Trustee may, on behalf of the Holders, vote for the election
- -------
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
SECTION 505. 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 and each predecessor Trustee and their
respective agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. 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 premium, if
any, 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: Subject to Article 12, to the holders of Senior Indebtedness;
SECOND: To payment of all amounts due the Trustee under Section 607;
THIRD: To the payment of the amounts then due and unpaid for
principal of and premium, if any, 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 premium, if
any, and interest, respectively; and
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FOURTH: The balance, if any, to the Company or any other Person or
Persons determined to be entitled thereto.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Security 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) 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;
it being understood and intended that no one or more holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
----------------------------------------------------------------
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 premium, if any, and (subject to Section
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date or, in the
case of a repurchase pursuant to Article Fourteen, on the Repurchase Date) and
to convert such Security in accordance with Article Thirteen and to institute
suit for the enforcement of any such payment and
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right to convert, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. 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 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 306, 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.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
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 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
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(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall determine that the action so directed would involve the Trustee
in personal liability or would be unduly prejudicial to Holders not joining
in such direction.
Upon receipt by the Trustee of any such direction, a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders of Outstanding Securities entitled to join in such
direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain Holders
after such record date; provided, that unless such direction shall have become
--------
effective by virtue of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such direction shall
automatically and without any action by any Person be canceled and of no further
force or effect.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or premium, if any, or interest
on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
--------
shall be deemed to authorize any court to require
53
<PAGE>
such an undertaking or to make such an assessment in any suit instituted by the
Company, in any suit instituted by the Trustee, a suit by a Holder pursuant to
Section 508, or a suit by a Holder or Holders of more than 10% in principal
amount of the outstanding Securities.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by
this Indenture and the Trust Indenture Act for securities issued pursuant to
indentures qualified thereunder. Except as otherwise provided herein,
notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability or risk in the performance of any of its duties hereunder, 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 satisfactory to it
against such risk or liability is not reasonably assured to it. Whether or not
therein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section. The Trustee shall not be
liable (x) for any error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts or (y) with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding relating to the time, method
and place of conducting any proceeding or any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture. Prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred: (i) the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Indenture and in the Trust Indenture Act, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture and in the Trust Indenture Act, and no
implied covenants or obligations shall be read in to this Indenture against the
Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture and believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties; but in the case of any such
statements, certificates or options which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform on their
face to the requirements of this Indenture. If a default or an Event of Default
has occurred and is
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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 its exercise thereof
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
SECTION 602. Notice of Defaults.
------------------
The Trustee shall give the Holders notice of any default hereunder
known to it as and to the extent provided by the Trust Indenture Act; provided,
--------
however, that in the case of any default of the character specified in Section
- -------
501(5), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written 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;
(e) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
55
<PAGE>
(f) before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the provisions
of Section 102, and the Trustee shall be protected and shall not be liable
for any action it takes or omits to take in good faith and without gross
negligence in reliance on such certificate or opinion;
(g) the Trustee shall not be required to give any bond or surety in
respect of the performance of its power and duties hereunder;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(i) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee and any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
-------------------
Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. The
Trustee
56
<PAGE>
or any Paying Agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (including its services as
Security Registrar or Paying Agent, if so appointed by the Company) as may
be mutually agreed upon in writing by the Company and the Trustee (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it
in connection with the performance of its duties under any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel and all other persons not regularly
in its employ) except to the extent any such expense, disbursement or
advance may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and each predecessor Trustee (each an
"indemnitee") for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and its duties hereunder (including its services as
Security Registrar or Paying Agent, if so appointed by the Company),
including enforcement of this Section 607 and including the costs and
expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Company shall defend any claim or
threatened claim asserted against an indemnitee for which it may seek
indemnity, and the indemnitee shall cooperate in the defense unless, in the
reasonable opinion of the indemnitee's counsel, the indemnitee has an
interest adverse to the Issuer or a potential conflict of interest exists
between the indemnitee and the Company, in which case the indemnitee may
have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel; provided that the Company shall only be
--------
responsible for the reasonable fees and expenses of one law firm (in
addition to local counsel) in any one action or separate substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, such law firm to be designated by the
indemnitee.
57
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As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities, and
the Securities are hereby subordinated to such prior lien. The obligations of
the Company under this Section to compensate and indemnify the Trustee and any
predecessor Trustee and to pay or reimburse the Trustee and any predecessor
Trustee for expenses, disbursements and advances, and any other amounts due the
Trustee or any predecessor Trustee under Section 607, shall constitute an
additional obligation hereunder and shall survive the satisfaction and discharge
of this Indenture.
When the Trustee or any predecessor Trustee incurs expenses or renders
services in connection with the performance of its obligations hereunder
(including its services as Security Registrar or Paying Agent, if so appointed
by the Company) after an Event of Default specified in Section 501(7) or (8)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under ny applicable bankruptcy, insolvency
or other similar federal or state law to the extent provided in Section
503(b)(5) of Title 11 of the United States Code, as now or hereafter in effect.
SECTION 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that (i) is eligible pursuant to the Trust Indenture Act to act as such,
(ii) has (or, in the case of a corporation included in a bank holding company
system, whose related bank holding company has) a combined capacity and surplus
of at least $50,000,000 and (iii) has a Corporate Trust Office in the Borough of
Manhattan, The City of New York, or a designated agent. If such Person
publishes reports of conditions at least annually, pursuant to law or to the
requirements of a Federal or state supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
58
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SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the resigning Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in principal amount of the Outstanding Securities delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for the last six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
such successor Trustee shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal
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amount of the Outstanding Securities delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611 become the successor Trustee and supersede the successor Trustee appointed
by the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication
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and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents acceptable
to and at the expense of the Company which shall be authorized to act on behalf
of the Trustee to authenticate Securities issued upon original issue and upon
exchange, registration of transfer, partial conversion or partial redemption or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Person organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an Authenticating
Agent, provided such Person shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail notice of such
appointment by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment under this Section shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible to act as such under the
provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section. Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee against
any loss, liability or expense incurred by the Trustee and to defend any claim
asserted against the Trustee by reason of any acts or failures to act of such
Authenticating Agent, but such Authenticating Agent shall have no liability for
any action taken by it in accordance with the specific written direction of the
Trustee.
The Trustee shall not be liable for any act or any failure of the
Authenticating Agent to perform any duty either required herein or authorized
herein to be performed by such person in accordance with this Indenture.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
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This is one of the Securities described in the within-mentioned
Indenture.
_____________________________________,
As Trustee
By _________________________________
As Authenticating Agent
By ____________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished.
Notwithstanding the foregoing, so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communication to Holders.
-----------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and
the
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corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act or otherwise in accordance with this
Indenture.
SECTION 703. Reports by Trustee.
------------------
(a) Not later than 60 days following each May 15, the Trustee shall
transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Securities are listed
on any stock exchange.
SECTION 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided, that any such
--------
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
SECTION 705. Rule 144A Information Requirement.
---------------------------------
If at any time prior to the Resale Restriction Termination Date the
Company is no longer subject to Section 13 or 15(d) of the Exchange Act, the
Company will furnish to the Holders or beneficial holders of the Securities and
prospective purchasers of the Securities designated by the Holders of the
Securities, upon their request, information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act until the earlier of (i) the date on
which the Securities and the underlying Common Stock are registered under the
Securities Act or (ii) the Resale Restriction Termination Date.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease all or substantially all of its
properties and assets to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, all or substantially
all of the properties and assets of the Company shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and premium, if any, and
interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Section 1311;
(2) immediately after giving effect to such 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 happened and be continuing;
(3) such consolidation, merger, conveyance, transfer or lease does
not adversely affect the validity or enforceability of the Securities; and
(4) the Company or the successor Person has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which
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such conveyance, transfer or lease 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 had been named as the Company
herein, and thereafter, except in the case of a transfer by lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cause this Indenture to be qualified under the Trust Indenture
Act; or
(2) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(3) to add to the covenants of the Company for the benefit of the
Holders or an additional Event of Default, or to surrender any right or
power conferred herein or in the Securities upon the Company; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 1311; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(7) to cure any ambiguity, to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with any
other provision herein or in the Securities, or to make any other
provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture; provided, that such action pursuant to this Clause (7) shall not
--------
adversely affect the interests of the Holders in any material respect and
the Trustee may rely upon an opinion of counsel to that effect.
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SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
- -------- -------
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or adversely affect the right
to convert any Security as provided in Article Thirteen (except as
permitted by Section 901(5)), or modify the provisions of Article Fourteen,
or the provisions of this Indenture with respect to the subordination of
the Securities, in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture,
or
(3) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this Clause shall not be deemed to require
-------- -------
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1006, or the
deletion of this proviso, in accordance with the requirements of Section
901(6).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
------------------------------------
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 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and (at the specific direction of the Company) authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
--------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture.
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ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of and premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in New York, New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, where Securities may be
surrendered for exchange or conversion and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, or the offices of its Agent, DTC, 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 other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
- -------- -------
relieve the Company of its obligation to maintain an office or agency in New
York, New York 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
location of any such other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of and premium, if any, or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to 11:00 a.m. (New York City time) on each due date of the principal of
and premium, if any, or interest on any Securities, deposit with a Paying Agent
a sum in
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same day funds sufficient to pay the principal and any premium and interest so
becoming due, such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or the
Company to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act and this Indenture applicable to it as a Paying Agent and hold all
sums held by it for the payment of principal of or any premium or interest on
the Securities in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided; (ii) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment in respect of
the Securities; and (iii) at any time during the continuance of any default by
the Company (or any other obligor upon the Securities) in the making of any
payment in respect of the Securities, upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities, and account for any funds disbursed.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and payable shall
be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
-------- -------
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
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SECTION 1004. Statement by Officers as to Default.
-----------------------------------
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. Existence.
---------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises and the existence, rights (charter
and statutory) and franchises of each Subsidiary; provided, however, that the
-------- -------
Company shall not be required to preserve any such right or franchise 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 that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1005, if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
-------------------
The Securities may be redeemed at the election of the Company, in
whole or from time to time in part, at any time on or after June 4, 1999, at the
Redemption Prices specified in the form of Security hereinbefore set forth,
together with accrued interest, to the Redemption Date.
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SECTION 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company as permitted
by any provision of this Indenture shall be made in accordance with such
provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter period shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities to
be redeemed. In case of any redemption at the election of the Company of all of
the Securities, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter period shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date.
SECTION 1104. Selection by Trustee of Securities to be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot or pro rata or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or any integral multiple thereof) of the
principal amount of Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection. In any case
where more than one Security is registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one Security.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 15 nor more than 60 days prior to the Redemption
Date, to the Trustee and to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that (unless the
Company shall default in payment of the Redemption Price) interest thereon
will cease to accrue on and after said date,
(e) the conversion price, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where such
Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request received
by the Trustee at least 25 days prior to the Redemption Date, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
---------------------------
At or prior to 9:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in same day funds sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof which
are to be redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
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If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
-------- -------
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company maintained for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
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ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinated to Senior Indebtedness.
----------------------------------------------
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, at all times and in
all respects, the indebtedness represented by the Securities and the payment of
the principal of and premium, if any, and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness.
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefits of creditors or any other marshalling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness; or provision shall be
made for such payment in money or money's worth, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character, whether in cash, property or securities, on account of principal of
or premium, if any, or interest on the Securities, and to that end the holders
of Senior Indebtedness shall be entitled to receive, for application to the
payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the Securities,
which may be payable or deliverable in respect of the Securities in any such
case, proceeding, dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or such Holder, as the case
may be, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee,
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custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, general
assignment for the benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article Eight.
SECTION 1203. Prior Payment to Senior Indebtedness upon Acceleration of
---------------------------------------------------------
Securities.
----------
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders of the Securities are entitled to receive any
payment (including any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities) by the Company on account of the principal of or premium, if any, or
interest on the Securities or on account of the purchase or other acquisition of
Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or such Holder, as the
case may be, then and in such event such payment shall be paid over the
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
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SECTION 1204. No Payment When Senior Indebtedness in Default.
----------------------------------------------
(a) In the event and during the continuation of any default in the
payment of principal of or premium, if any, or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have ceased to exist
and such acceleration shall have been rescinded or annulled, or (b) in the event
any judicial proceeding shall be pending with respect to any such default in
payment or event of default, then no payment (including any payment which may be
payable by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) shall be made by the Company on
account of the principal of or premium, if any, or interest on the Securities or
on account of the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or such Holder, as the
case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1205. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, general assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 1202 or under the
conditions described in Section 1203 or 1204, from making payments at any time
of principal of and premium, if any, or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of and premium, if any, or interest on
the Securities or the retention of such payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all amounts due on or in respect of
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to
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the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of and premium, if any, and Interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
SECTION 1207. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company or the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1208. Trustee to Effectuate Subordination.
-----------------------------------
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1209. No Waiver of Subordination Provisions.
-------------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure
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to act, in good faith, by any such holder, or by any noncompliance by the
Company with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 1210. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
-------- -------
the notice provided for in this Section at least four Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of and premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within four Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
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distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1212. Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee.
SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights.
----------------------------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
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SECTION 1214. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
--------
however, that Section 1213 shall not apply to the Company or any Affiliate of
- -------
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Thirteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section, the term "junior
securities" means (a) shares of any class of capital stock of the Company and
(b) securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Thirteen.
SECTION 1216. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of the Securities to take any action to accelerate the maturity
of the Securities pursuant to the provisions described under Article Five and as
set forth in this Indenture or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Senior Indebtedness to receive the cash, property
or securities receivable upon the exercise of such rights or remedies.
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ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof which equals $1,000 or any integral multiple thereof may be
converted at any time after the 60th day following the date of original issuance
of Securities under this Indenture at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock, at the conversion
price, determined as hereinafter provided, in effect at the time of conversion.
Such conversion right shall expire at the close of business on June 1, 2003. In
case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at the close
of business on the second business day preceding the applicable Redemption Date,
unless the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $26.25 per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f) and (i) of
Section 1304.
SECTION 1302. Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security shall surrender such Security, duly endorsed or assigned to the Company
or in blank, at any office or agency of the Company maintained pursuant to
Section 1002, accompanied by written notice to the Company in the form provided
in the Security (or such other notice as is acceptable to the Company) at such
office or agency that the Holder elects to convert such Security or, if less
than the entire principal amount thereof is to be converted, the portion thereof
to be converted. Securities surrendered for conversion during the period from
the opening of business on any Regular Record Date next preceding any Interest
Payment Date to the close of business on such Interest Payment Date shall
(except in the case of Securities or portions thereof which have been called for
redemption) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount being surrendered for
conversion. Except as provided in the immediately preceding sentence and
subject to the fourth paragraph of Section 307, no payment or adjustment shall
be made upon any conversion on account of any interest accrued on the
Securities surrendered for conversion or on account of any dividends on the
Common Stock issued upon conversion.
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Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes of the record holder or holders of such Common Stock as and
after such time. As promptly as practicable on or after the conversion date,
the Company shall issue and shall deliver at such office or agency a certificate
or certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1303.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 1303. Fractions of Shares.
-------------------
No fractional share of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the Closing Price
(as hereinafter defined) at the close of business on the day of conversion (or,
if such day is not a Trading Day (as hereafter defined), on the Trading Day
immediately preceding such day).
SECTION 1304. Adjustment of Conversion Price.
------------------------------
(a) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class of capital stock of the
Company which dividend or distribution includes Common Stock, the conversion
price in effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day following
the date fixed for such determination. For the purpose of this paragraph (a),
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the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(b) Subject to paragraph (g) of this Section, in case the Company
shall pay or make a dividend or other distribution on the Common Stock
consisting exclusively of, or shall otherwise issue to all holders of the Common
Stock, rights or warrants entitling the holders thereof to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (determined as provided in paragraph (h) of this Section) on the
date fixed for the determination of shareholders entitled to receive such rights
or warrants, the conversion price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights or warrants in
respect of shares of Common Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which subdivision or combination becomes
effective.
(d) Subject to the last sentence of this paragraph (d) and to
paragraph (g) of this Section, in case the Company shall, by dividend or
otherwise, distribute to all holders of the Common Stock evidences of its
indebtedness, shares of any class of its capital stock, cash or other assets
(including securities, but excluding any rights or warrants referred to in
paragraph (b) of this Section, excluding any dividend or distribution paid
exclusively in cash and excluding any dividend or distribution referred to in
paragraph (a) of this Section), the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the close of
business on the date fixed
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for the determination of shareholders entitled to such distribution by a
fraction of which the numerator shall be the Current Market Price (determined as
provided in paragraph (h) of this Section) on such date less the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) on such date of the portion of
the evidences of indebtedness, shares of capital stock, cash and other assets to
be distributed applicable to one share of Common Stock and the denominator shall
be such Current Market Price, such reduction to become effective immediately
prior to the opening of business on the day following such date. If the Board
of Directors determines the fair market value of any distribution for purposes
of this paragraph (d) by reference to the actual or when-issued trading market
for any securities comprising part or all of such distribution, it must in doing
so consider the prices in such market over the same period used in computing the
Current Market Price pursuant to paragraph (h) of this Section, to the extent
possible. For purposes of this paragraph (d), any dividend or distribution that
includes shares of Common Stock, rights or warrants to subscribe for or purchase
shares of Common Stock or securities convertible into or exchangeable for shares
of Common Stock shall be deemed to be (x) a dividend or distribution of the
evidences of indebtedness, cash, assets or shares of capital stock other than
such shares of Common Stock, such rights or warrants or such convertible or
exchangeable securities (making any conversion price reduction required by this
paragraph (d)) immediately followed by (y) in the case of such shares of Common
Stock or such rights or warrants, a dividend or distribution thereof (making any
further conversion price reduction required by paragraph (a) and (b) of this
Section, except any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of paragraph (a) of this
Section), or (z) in the case of such convertible or exchangeable securities, a
dividend or distribution of the number of shares of Common Stock as would then
be issuable upon the conversion or exchange thereof, whether or not the
conversion or exchange of such securities is subject to any conditions (making
any further conversion price reduction required by paragraph (a) of this
Section, except the shares deemed to constitute such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of this Section).
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock cash (excluding any cash that is
distributed as part of a distribution referred to in paragraph (d) of this
Section or in connection with a transaction to which Section 1311 applies) in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of the Common Stock made exclusively in cash within
the 12 months preceding the date fixed for the determination of shareholders
entitled to such distribution and in respect of which no conversion price
adjustment pursuant to this paragraph (e) has been made previously and (ii) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) as of such date of determination of consideration payable in respect
of any tender offer by the Company or a Subsidiary for all or any portion of the
Common Stock
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consummated within the 12 months preceding such date of determination and in
respect of which no conversion price adjustment pursuant to paragraph (f) of
this Section has been made previously, exceeds 12.5% of the product of the
Current Market Price (determined as provided in paragraph (h) of this Section)
on such date of determination times the number of shares of Common Stock
outstanding on such date, the conversion price shall be reduced by multiplying
the conversion price in effect immediately prior to the close of business on
such date of determination by a fraction of which the numerator shall be the
Current Market Price (determined as provided in paragraph (h) of this Section)
on such date less the amount of cash to be distributed at such time applicable
to one share of Common Stock and the denominator shall be such Current Market
Price, such reduction to become effective immediately prior to the opening of
business on the day after such date.
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall be consummated and such tender
offer shall involve an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) as of the last time (the "Expiration Time")
that tenders may be made pursuant to such tender offer (as it shall have been
amended) that, together with (i) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) as of the Expiration Time of the
other consideration paid in respect of any other tender offer by the Company or
a Subsidiary for all or any portion of the Common Stock consummated within the
12 months preceding the Expiration Time and in respect of which no conversion
price adjustment pursuant to this paragraph (f) has been made previously and
(ii) the aggregate amount of any distributions to all holders of the Common
Stock made exclusively in cash within the 12 months preceding the Expiration
Time and in respect of which no conversion price adjustment pursuant to
paragraph (e) of this Section has been made previously, exceeds 12.5% of the
product of the Current Market Price (determined as provided in paragraph (h) of
this Section) immediately prior to the Expiration Time times the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time, the conversion price shall be reduced by multiplying the
conversion price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be (x) the product of the Current Market
Price (determined as provided in paragraph (h) of this Section) immediately
prior to the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares at the Expiration Time minus (y) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders upon consummation of such tender offer and the
denominator shall be the product of (A) such Current Market Price times (B) such
number of outstanding shares at the Expiration Time minus the number of shares
accepted for payment in such tender offer (the "Purchased Shares"), such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time; provided, that if the number of Purchased
--------
Shares or the aggregate consideration payable therefor have not been finally
determined by such opening of business, the adjustment required by this
paragraph (f) shall, pending such
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final determination, be made based upon the preliminarily announced results of
such tender offer, and, after such final determination shall have been made, the
adjustment required by this paragraph (f) shall be made based upon the number of
Purchased Shares and the aggregate consideration payable therefor as so finally
determined.
(g) The reclassification of Common Stock into securities which
include securities other than Common Stock (other than any reclassification upon
a consolidation or merger to which Section 1311 applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders entitled
to such distribution" within the meaning of paragraph (d) of this Section), and
(ii) a subdivision or combination, as the case may be, of the number of shares
of Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of paragraph
(c) of this Section).
Rights or warrants issued by the Company to all holders of the Common
Stock entitling the holders thereof to subscribe for or purchase shares of
Common Stock (either initially or under certain circumstances), which rights or
warrants (i) are deemed to be transferred with such shares of Common Stock, (ii)
are not exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until the occurrence of
a specified event or events ("Trigger Event"), shall for purposes of this
Section 1304 not be deemed issued until the occurrence of the earliest Trigger
Event. If any such rights or warrants, including any such existing rights or
warrants distributed prior to the date of this Indenture are subject to
subsequent events, upon the occurrence of each of which such rights or warrants
shall become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the occurrence of each such event shall be
deemed to be such date of issuance and record date with respect to new rights or
warrants (and a termination or expiration of the existing rights or warrants
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event with respect thereto, that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 1304 was made, (1) in the case of any such rights or warrant which shall
all have been redeemed or repurchased without exercise by any holders thereof,
the Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants which shall have
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expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
Notwithstanding any other provision of this Section 1304 to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 1304 if the Company makes proper provision so that each
holder of Securities who converts a Security (or any portion thereof) after the
date fixed for determination of stockholders entitled to receive such
distribution shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversions, the amount and kind
of such distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date, converted such
Security into Common Stock.
(h) For the purpose of any computation under this paragraph and
paragraphs (b), (d) and (e) of this Section, the current market price per share
of Common Stock (the "Current Market Price") on any date shall be deemed to be
the average of the daily Closing Prices for the 5 consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the date in question; provided, however, that (i) if the
-------- -------
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the 20th
Trading Day prior to the date in question and prior to the "ex" date for the
issuance or distribution requiring such computation, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the conversion
price is so required to be adjusted as a result of such other event, (ii) if the
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the "ex" date
for the issuance or distribution requiring such computation and on or prior to
the date in question, the Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the conversion price is so
required to be adjusted as a result of such other event, and (iii) if the "ex"
date for the issuance or distribution requiring such computation is on or prior
to the date in question, after taking into account any adjustment required
pursuant to clause (ii) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount of any
cash and the fair market value on the date in question (as determined by the
Board of Directors in a manner consistent with any determination of such value
for purposes of paragraph (d) or (e) of this Section, whose determination shall
be conclusive and described in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such
"ex" date. For the purpose of any computation under paragraph (f) of this
Section, the Current Market Price on any date shall be deemed to
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be the average of the daily Closing Prices for the 5 consecutive Trading Days
selected by the Company commencing on or after the latest (the "Commencement
Date") of (i) the date 20 Trading Days before the date in question, (ii) the
date of commencement of the tender offer requiring such computation and (iii)
the date of the last amendment, if any, of such tender offer involving a change
in the maximum number of shares for which tenders are sought or a change in the
consideration offered, and ending not later than the Expiration Time of such
tender offer; provided, however, that if the "ex" date for any event (other than
-------- -------
the tender offer requiring such computation) that requires an adjustment to the
conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above
occurs on or after the Commencement Date and prior to the Expiration Time for
the tender offer requiring such computation, the Closing Price for each Trading
Day prior to the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the conversion price is so
required to be adjusted as a result of such other event. The closing price for
any Trading Day (the "Closing Price") shall be the last reported sales price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange or, if the Common Stock is not listed or admitted
to trading on such exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the Nasdaq Stock
Market's National Market or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on such National Market,
the average of the closing bid and asked prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time to
time by the Company for that purpose. For purposes of this paragraph, the term
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are generally not traded on the applicable
securities exchange or in the applicable securities market and the term "'ex'
date," (i) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the relevant exchange
or in the relevant market from which the Closing Prices were obtained without
the right to receive such issuance or distribution, (ii) when used with respect
to any subdivision or combination of shares of Common Stock, means the first
date on which the Common Stock trades regular way on such exchange or in such
market after the time at which such subdivision or combination becomes
effective, and (iii) when used with respect to any tender offer means the first
date on which the Common Stock trades regular way on such exchange or in such
market after the last time that tenders may be made pursuant to such tender
offer (as it shall have been amended).
(i) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (a), (b), (c), (d), (e) and (f) of this
Section, as it considers to be advisable (as evidenced by a Board Resolution) in
order that any event treated for federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients or, if that is not
possible, to diminish any income taxes that are otherwise payable because of
such event.
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(j) No adjustment in the conversion price shall be required unless
such adjustment (plus any other adjustments not previously made by reason of
this paragraph (j)) would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
-------- -------
this paragraph (j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(k) Notwithstanding any other provision of this Section 1304, no
adjustment to the conversion price shall reduce the conversion price below the
then par value per share of the Common Stock, and any such purported adjustment
shall instead reduce the conversion price to such par value. The Company hereby
covenants not to take any action to increase the par value per share of the
Common Stock.
SECTION 1305. Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 1304 and shall prepare an Officers' Certificate
signed by the Treasurer of the Company setting forth the adjusted
conversion price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with a
copy to the Trustee) at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be prepared,
and as soon as practicable after it is prepared, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Security Register.
SECTION 1306. Notice of Certain Corporate Action.
----------------------------------
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require a conversion price
adjustment pursuant to paragraph (e) of Section 1304; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights (excluding shares of
capital stock or option for capital stock issued pursuant to a benefit plan
for employees, officers or directors of the Company); or
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(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the outstanding shares of Common Stock (or shall amend
any such tender offer to change the maximum number of shares being sought
or the amount or type of consideration being offered therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 1002, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Security Register, at least 21 days
(or 11 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record who will
be entitled to such dividend, distribution, rights or warrants are to be
determined, (y) the date on which such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up, or (z) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of any amendment thereto). Neither the failure to give
any such notice nor any defect therein shall affect the legality or validity of
any action described in clauses (a) through (e) of this Section 1306.
SECTION 1307. Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the authorized but unissued Common Stock or out of the
Common Stock held in treasury, for the purpose of effecting the conversion of
Securities, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding Securities. Shares of Common Stock issuable upon
conversion of outstanding Securities shall be issued out of the Common Stock
held in Treasury to the extent available.
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SECTION 1308. Taxes on Conversions.
--------------------
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION 1309. Covenant as to Common Stock.
---------------------------
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1308, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 1310. Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. Provisions of Consolidation, Merger or Sale of Assets.
-----------------------------------------------------
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) or any sale or
transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 1301, to convert such Security only
into the kind and amount of securities, cash and other property, if any,
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property
receivable
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upon such consolidation, merger, sale or transfer is not the same for each share
of Common Stock held immediately prior to such consolidation, merger, sale or
transfer by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer by each nonelecting share shall be deemed to be the
kind and amount so receivable per share by a plurality of the nonelecting
shares). Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
SECTION 1312. Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article 13 should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon, the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 1305. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company's failure
to comply with any provisions of this Article 13.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 1311, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 1311.
ARTICLE FOURTEEN
Right to Require Repurchase
SECTION 1401. Right to Require Repurchase.
---------------------------
In the event that there shall occur a Repurchase Event (as defined in
Section 1406), then each Holder shall have the right, at such Holder's option,
to require the Company to purchase, and upon the exercise of such right, the
Company shall, subject to the provisions of Section 1203, purchase, all or any
part of such Holder's Securities on the date (the "Repurchase Date") that is 30
days after the date the Company gives notice of the Repurchase Event as
contemplated in Section 1402(a) at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
to the Repurchase Date.
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SECTION 1402. Notice; Method of Exercising Repurchase Right.
---------------------------------------------
(a) On or before the 15th day after the occurrence of a Repurchase
Event, the Company, or at the request of the Company received by the Trustee at
least 40 days prior to the Repurchase Date, the Trustee (in the name and at the
expense of the Company), shall give notice of the occurrence of the Repurchase
Event and of the repurchase right set forth herein arising as a result thereof
by first-class mail, postage prepaid, to the Trustee and to each Holder of the
Securities at such Holder's address appearing in the Security Register. The
Company shall also deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(1) the event constituting the Repurchase Event and the date thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must be exercised,
(4) the Repurchase Price, and
(5) the instructions a Holder must follow to exercise a repurchase
right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Repurchase
Event.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the close of business
on the Repurchase Date (i) written notice of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal amount
of the Security or Securities (or portion of a Security) to be repurchased, and
a statement that an election to exercise the repurchased right is being made
thereby, and (ii) the Security or Securities with respect to which the
repurchase right is being exercised, duly endorsed for transfer to the Company.
Such written notice shall be irrevocable. If the Repurchase Date falls between
any Regular Record Date and the next succeeding Interest Payment Date,
Securities to be repurchased must be accompanied by payment from the Holder of
an amount equal to the interest thereon which the registered Holder thereof is
to receive on such Interest Payment Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall on the Repurchase Date pay or cause to
be paid in cash to the Holder thereof the Repurchase Price of the Security or
Securities as to which the repurchase right had been exercised. In the event
that a repurchase right
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is exercised with respect to less than the entire principal amount of a
surrendered Security, the Company shall execute and deliver to the Trustee and
the Trustee shall authenticate for issuance in the name of the Holder a new
Security or Securities in the aggregate principal amount of the unrepurchased
portion of such surrendered security.
SECTION 1403. Deposit of Repurchase Price.
---------------------------
On or prior to the Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds sufficient to pay the Repurchase Price of the Securities
which are to be repaid on the Repurchase Date.
SECTION 1404. Securities Not Repurchased on Repurchase Date.
---------------------------------------------
If any Security surrendered for repurchase shall not be so paid on the
Repurchase Date, the principal shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the rate per annum borne
by such Security.
SECTION 1405. Securities Repurchased in Part.
------------------------------
Any Security which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 1406. Certain Definitions.
-------------------
For purposes of this Article:
(a) A "Repurchase Event" shall have occurred upon the occurrence of a
Change in Control or Termination of Trading after the date of this Indenture and
on or prior to June 1, 2003.
(b) A "Change in Control" shall occur when :
(i) all or substantially all of the Company's assets are sold
as an entirety to any person or related group of persons;
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(ii) there shall be consummated any consolidation or merger of
the Company (A) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of Common Stock outstanding
immediately prior to the effectiveness thereof are changed into or
exchanged for the same consideration) or (B) pursuant to which the Common
Stock would be converted into cash, securities or other property, in each
case, other than a consolidation or merger of the Company in which the
holders of the Common Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the total
voting power of all classes of capital stock entitled to vote generally in
the election of directors of the continuing or surviving corporation
immediately after such consolidation or merger in substantially the same
proportion as their ownership of Common Stock immediately before such
transaction;
(iii) any person, or any persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act (a
"Group"), together with any Affiliates thereof, shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) at least 50% of the total
voting power of all classes of capital stock of the Company entitled to
vote generally in the election of directors of the Company; or
(iv) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of 662/3% of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
(v) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
(c) A "Termination of Trading" shall occur if the Common Stock (or other
common stock into which the Securities are then convertible) is neither listed
for trading on a U.S. national securities exchange nor approved for trading on
an established automated over-the-counter trading market in the United States.
_____________________________
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This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
ROTECH MEDICAL CORPORATION
By /s/ Stephen P. Griggs
---------------------------------------
Name: Stephen P. Griggs
Title: President, Chief Operating
Officer
Attest:
/s/ William A. Walker II
- --------------------------
William A. Walker II
Corporate Secretary
PNC Bank, Kentucky, Inc.,
as Trustee
By /s/ W. Michael Hanks
------------------------------
Name: W. Michael Hanks
Title: Vice President
Attest:
/s/ Patricia C. McFadden
- ------------------------------
Patricia C. McFadden
Assistant Secretary
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)
) ss.
)
On the day of May, 1996, before me personally came Stephen P.
Griggs, to me known, who, being by me duly sworn, did depose and say that he is
President, Chief Operating Officer of RoTech Medical Corporation, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
________________________________
)
) ss.:
)
On the day of May, 1996, before me personally came [Name], to me
known, who, being by me duly sworn, did depose and say that he is [Title] of PNC
Bank, Kentucky, Inc., a Kentucky banking corporation described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he signed his
name thereto by like authority.
_____________________________
98
<PAGE>
EXHIBIT A
------- -
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF SECURITIES]
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 5 1/4% Convertible Subordinated Debentures due 2003
This Certificate relates to $_________ principal amount of Securities
held in *____________ book-entry or *____________ definitive form by _________
(the "Transferor").
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depositary a Security
or Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
[_] has requested the Trustee by written order to deliver in exchange for
its Security or Securities a beneficial interest in the Global Security held by
the Depositary in a principal amount equal to the aggregate principal amount of
such Security or Securities; or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such security,
the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned
Debentures and, as provided in Section 305 of such Indenture, the transfer of
this Security does not require registration under the Securities Act (as defined
below) because*:
[_] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 305(b)(ii)(A) or Section
305(f)(i)(A) of the Indenture).
[_] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A or pursuant to an exemption
from registration in
________________________________
* Check applicable box.
A-1
<PAGE>
accordance with Regulation S under the Securities Act (in satisfaction of
Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i), Section
305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of the Indenture). If
such Security is being transferred in accordance with Regulation S under the
Securities Act, an opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 305(b)(ii)(B), Section 305(f)(i)(B), Section 305(g)(iii)
or Section 305(h)(iii) of the Indenture).
[_] Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 305(b)(ii)(B), Section 305(f)(i)(B),
Section 305(g)(iii), Section 305(h)(iii) or Section 305(k)(ii) of the
Indenture). If such Security is being transferred in accordance with Rule 144
under the Securities Act, an opinion of counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
Certificate (in satisfaction of Section 305(b)(ii)(B), Section 305(f)(i)(B),
Section 305(g)(iii), Section 305(h)(iii) or Section 305(k)(ii) of the
Indenture).
[_] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Regulation S under the Securities Act. An opinion
of counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this Certificate (in satisfaction of Section
305(b)(ii)(C), Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii)
of the Indenture).
You are entitled to rely upon this certificate and you are irrevocably
authorized to produce this certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.
_______________________________
[INSERT NAME OF TRANSFEROR]
By:____________________________
Date: _______________________
A-2
<PAGE>
EXHIBIT 4.3
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of May 24, 1996
relating to
$110,000,000 in Aggregate Principal Amount
of 5 1/4% Convertible Subordinated
Debentures due 2003
by and among
RoTech Medical Corporation
and
Smith Barney Inc.,
Needham & Company, Inc.
and
Wheat, First Securities, Inc.
================================================================================
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 24, 1996 by and between RoTech Medical Corporation, a
Florida corporation (the "Company"), and Smith Barney Inc., Needham & Company,
Inc. and Wheat First Securities, Inc. (the "Initial Purchasers"), who will
purchase $110,000,000 in aggregate principal amount of 5 1/4% Convertible
Subordinated Debentures due 2003 (the "Debentures") of the Company (excluding up
to an additional $16,500,000 aggregate principal that may be purchased by the
Initial Purchasers pursuant to their over-allotment option) pursuant to the
Purchase Agreement dated May 24, 1996 (the "Purchase Agreement") between the
Company and the Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in the Purchase Agreement. All defined terms used but not defined herein
shall have the meanings ascribed to them in the Indenture (as defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
Closing Date: The date on which the Debentures are first sold by
the Company to the Initial Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Common Stock: The Common Stock, par value $.0002 per share, of
the Company.
Damages Payment Date: With respect to the Debentures or the
Common Stock, as applicable, each Interest Payment Date as defined in the
Indenture.
Effectiveness Date: The date on which the Shelf Registration
Statement is declared effective by the Commission under the Act.
Effectiveness Target Date: As defined in Section 4.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Debentures to (i) certain "qualified institutional buyers"
(as such term is defined in Rule 144A under the Act) and (ii) to certain persons
in offshore transactions in reliance on Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, to be dated as of June 1, 1996, among
the Company and PNC Bank, Kentucky, Inc., as trustee (the "Trustee"), pursuant
to which the Debentures are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture.
Latest Issuance Date: The latest date on which any of the
Debentures are originally issued by the Company pursuant to the terms of the
Purchase Agreement.
<PAGE>
NASD: The National Association of Securities Dealers, Inc.
Offering Memorandum: The Offering Memorandum, dated May 24,
1996, and all amendments and supplements thereto, relating to the Debentures and
prepared by the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Preliminary Prospectus: As defined in Section 3(f).
Prospectus: The prospectus included in the Shelf Registration
Statement, as amended or supplemented by any Prospectus Supplement with respect
to the terms of the offering of any portion of the Transfer Restricted
Securities (as defined herein) covered by the Shelf Registration Statement and
by all other amendments and supplements to the prospectus, including post-
effective amendments, and all material which may be incorporated by reference
into such prospectus.
Prospectus Supplement: As defined in Section 5(b).
Record Holder: (i) With respect to any Damages Payment Date
relating to the Debentures, each Person who is registered on the books of the
Registrar as the holder of Debentures on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur and (ii)
with respect to any Damages Payment Date relating to the Common Stock
constituting Transfer Restricted Securities, each Person who is a holder of
record of such Common Stock fifteen days prior to the Damages Payment Date.
Registration Expenses: As defined in Section 6(a).
Shelf Registration Statement: As defined in Section 3(a) hereof.
Suspension Period: As defined in Section 3(a).
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C.
Section 77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Debenture and share of
Common Stock of the Company issuable upon conversion of a Debenture, until each
such Debenture or share (i) has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration Statement covering
it, (ii) is distributed to the public pursuant to Rule 144 or (iii) may be sold
or transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling broker,
dealer manager, qualified independent underwriter or similar securities industry
professional.
Underwritten Registration or Underwritten Offering: An offering
in which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm commitment
or best efforts basis.
2
<PAGE>
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled
to the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission on
or prior to 90 days after the Closing Date, a shelf registration statement
pursuant to Rule 415 under the Act (as may then be amended) (the "Shelf
Registration Statement") on Form S-1 or Form S-3, if the use of such form is
then available and as determined by the Company, to cover resales of Transfer
Restricted Securities by the Holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. The Holders of such Transfer Restricted Securities shall
have provided the representations required pursuant to Section 3(f) hereof. The
Company shall use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or prior to 120 days
after the Closing Date. The Company shall use its best efforts to keep such
Shelf Registration Statement continuously effective for a period ending three
years from the effective date thereof or such shorter period that will terminate
when each of the Transfer Restricted Securities covered by the Shelf
Registration Statement shall cease to be a Transfer Restricted Security. The
Company further agrees to use its best efforts to prevent the happening of any
event that would cause the Shelf Registration Statement to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or to
be not effective and usable for resale of the Transfer Restricted Securities
during the period that such Shelf Registration Statement is required to be
effective and usable.
Upon the occurrence of any event that would cause the Shelf
Registration Statement (i) to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) to be not effective and usable for
resale of Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be effective and usable, the Company shall
as promptly as practicable file an amendment to the Shelf Registration
Statement, in the case of clause (i), correcting any such misstatement or
omission, and in the case of either clause (i) or (ii), use its best efforts to
cause such amendment to be declared effective and such Shelf Registration
Statement to become usable as soon as practicable thereafter.
Notwithstanding anything to the contrary in this Section 3,
subject to compliance with Sections 4 and 5(b), if applicable, the Company may
prohibit offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement at any time if (A) (i) it is in possession of
material non-public information, (ii) the Board of Directors of the Company
determines (based on advice of counsel) that such prohibition is necessary in
order to avoid a requirement to disclose such material non-public information
and (iii) the Board of Directors of the Company determines in good faith that
disclosure of such material non-public information would not be in the best
interests of the Company and its shareholders or (B) the Company has made a
public announcement relating to an acquisition or business combination
transaction including the Company and/or one or more of its subsidiaries (i)
that is material to the Company and its subsidiaries taken as a whole and (ii)
the Board of Directors of the Company determines in good faith that offers and
sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement prior to the consummation of such transaction (or such earlier date as
the Board of Directors shall determine) is not in the best interests of the
Company and its shareholders (the period during which any such prohibition of
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration
3
<PAGE>
Statement is in effect pursuant to clause (A) or (B) of this subparagraph (a) is
referred to herein as a "Suspension Period"). A Suspension Period shall
commence on and include the date on which the Company provides written notice to
Holders of Transfer Restricted Securities covered by the Shelf Registration
Statement that offers and sales of Transfer Restricted Securities cannot be made
thereunder in accordance with this Section 3 and shall end on the date on which
each Holder of Transfer Restricted Securities covered by the Shelf Registration
Statement either receives copies of a Prospectus Supplement contemplated by
Section 5(b) or is advised in writing by the Company that offers and sales of
Transfer Restricted Securities pursuant to the Shelf Registration Statement and
use of the Prospectus may be resumed.
(b) None of the Company nor any of its security holders (other
than the Holders of Transfer Restricted Securities in such capacity and other
shareholders having registration rights permitting them to participate therein,
as disclosed in the Offering Memorandum) shall have the right to include any of
the Company's securities in the Shelf Registration Statement.
(c) If the Holders of a majority of the outstanding Transfer
Restricted Securities so elect (with holders of Common Stock constituting
Transfer Restricted Securities being deemed to be Holders of the aggregate
principal amount of Debentures converted into such Common Stock for purposes of
such calculation), an offering of Transfer Restricted Securities pursuant to the
Shelf Registration Statement may be effected in the form of an Underwritten
Offering, provided, however, that notwithstanding anything contained in this
Agreement to the contrary, the Company shall not be required to undertake more
than one such Underwritten Offering during any consecutive 12 month period. The
Holders of the Transfer Restricted Securities to be registered shall pay all
underwriting discounts and commissions of such Underwriters and the fees and
expenses of any counsel for the Holders.
(d) If any of the Transfer Restricted Securities covered by the
Shelf Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Holders
of a majority of the outstanding Transfer Restricted Securities (with holders of
Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the aggregate principal amount of Debentures converted into such
Common Stock for purposes of such calculation); provided, however, that such
Underwriter(s) shall be reasonably satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are covered
by a Shelf Registration Statement filed pursuant to this Section 3 agrees, upon
the request of the Underwriter(s) in any Underwritten Offering, not to effect
any sale or distribution of securities of the Company of the same class as the
securities included in such Shelf Registration Statement for a period of up to
90 days beginning on the date any such Underwritten Offering made pursuant to
such Shelf Registration Statement commences, to the extent timely notified in
writing by such Underwriter(s).
(f) No Holder of Transfer Restricted Securities may include any
of its Transfer Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless such Holder furnishes to the Company in
writing, within 10 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus (a
"Preliminary Prospectus") included therein.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with
the Commission on or prior to 90 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commission within
120 days after the Closing Date (the "Effectiveness Target Date"), or (iii) the
Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or useable
4
<PAGE>
for resale for a period of time (including any Suspension Period) which shall
exceed 60 days in the aggregate in any of the one-year periods ending on the
first, second or third anniversaries of the Closing Date, or which shall exceed
30 days in any calendar quarter within any of such one-year periods (each such
event referred to in clauses (i) through (iii), a "Registration Default"), the
Company will pay liquidated damages to each Holder of Transfer Restricted
Securities who has complied with such Holder's obligations under this Agreement.
The amount of liquidated damages payable during any period during which a
Registration Default shall have occurred and be continuing is that amount which
is equal to one-quarter of one percent (25 basis points) per annum per $1,000
principal amount of Debentures, or $0.01 per week per share of Common Stock
(subject to adjustment in the event of stock splits, stock recombinations, stock
dividends and the like) constituting Transfer Restricted Securities, for each
90-day period or part thereof until the applicable registration statement
covering such Transfer Restricted Securities is filed and the applicable
registration statement is declared effective, or the Shelf Registration
Statement again becomes effective or usable, as the case may be, up to a maximum
amount of liquidated damages of $0.25 per week per $1,000 principal amount of
Debentures or $0.05 per week per share (subject to adjustment as set forth
above) of Common Stock constituting Transfer Restricted Securities. The Company
shall notify the Trustee and the Initial Purchasers within one business day
after each and every date on which a Registration Default occurs. All accrued
liquidated damages shall be paid to Record Holders by wire transfer of
immediately available funds or by federal funds check by the Company on the next
succeeding Damages Payment Date. Following the cure of all Registration
Defaults, liquidated damages will cease to accrue with respect to such
Registration Default.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted Security
shall cease at the time such security ceases to be a Transfer Restricted
Security.
The parties hereto agree that the liquidated damages provided in
this Section 4 constitute a reasonable estimate of the damages that will be
incurred by Holders of Transfer Restricted Securities by reason of the failure
of the Shelf Registration Statement to be filed, declared effective or to remain
effective, as the case may be.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company
will use its best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution or disposition thereof, and pursuant thereto the
Company will as expeditiously as possible after the Closing Date:
(a) on or prior to the date 90 days after the Closing Date,
prepare and file with the Commission a Shelf Registration Statement relating to
the registration on Form S-1 or Form S-3, if the use of such form is then
available and as determined by the Company, for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof and shall include all financial statements required to be
included or incorporated by reference therein; cooperate and assist in any
filings required to be made with the NASD and use its reasonable best efforts to
cause such Shelf Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the selling
Holders to consummate the disposition of such Transfer Restricted Securities;
provided, however, that before filing a Shelf Registration Statement or any
Prospectus, or any amendments or supplements thereto, the Company will furnish
to the Holders and the Underwriter(s), if any, copies of all such documents
proposed to be filed (except that the Company shall not be required to furnish
any exhibits to such documents, including those incorporated by reference,
unless so requested by a Holder or Underwriter in writing), and the Company will
not file any Shelf Registration Statement or amendment thereto or any Prospectus
or any supplement thereto to which (i) the Underwriter(s), if any, shall
reasonably object or (ii) if there are no Underwriters, the Holders of a
majority of the outstanding
5
<PAGE>
Transfer Restricted Securities shall reasonably object (with holders of Common
Stock constituting Transfer Restricted Securities being deemed to be Holders of
the aggregate principal amount of Debentures converted into such Common Stock
for purposes of such calculation), in each such case within five business days
after the receipt thereof. A Holder or Underwriter, if any, shall be deemed to
have reasonably objected to such filing if the Shelf Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be filed
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading which misstatement or omission is specifically identified to the
Company in writing within such five business days;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period set forth in Section 3(a) hereof; cause the Prospectus to be supplemented
by any required supplement thereto (a "Prospectus Supplement"), and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Shelf Registration
Statement, Prospectus or Prospectus Supplement;
(c) if requested by the Holders of Transfer Restricted
Securities, or, if the Transfer Restricted Securities are being sold in an
Underwritten Offering, the Underwriter(s) of such Underwritten Offering,
promptly incorporate in the Prospectus, any Prospectus Supplement or post-
effective amendment to the Shelf Registration Statement such information as the
Underwriters and/or the Holders of Transfer Restricted Securities being sold
agree should be included therein relating to the plan of distribution of the
Transfer Restricted Securities, including, without limitation, information with
respect to the principal amount of Debentures and/or the number of shares of
Common Stock being sold to such Underwriter(s), the purchase price being paid
therefor and any other terms with respect to the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required filings
of such Prospectus, Prospectus Supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be incorporated in
such Prospectus, Prospectus Supplement or post-effective amendment;
(d) advise the Underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing,
(i) when the Prospectus or any Prospectus Supplement or post-effective amendment
to the Shelf Registration Statement has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment thereto, when the
same has become effective, (ii) of any request by the Commission for amendments
to the Shelf Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any proceeding
for any of the preceding purposes, (iv) if at any time the representations and
warranties of the Company contemplated by paragraph (m)(i) below cease to be
true and correct, and (v) of the existence of any fact or the happening of any
event that makes any statement of a material fact made in the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Shelf Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
6
<PAGE>
(e) promptly following the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration Statement,
provide copies of such document (excluding exhibits, unless requested by a
Holder in writing) to the Holders;
(f) furnish to each Holder and each of the Underwriter(s), if
any, without charge, at least one copy of the Shelf Registration Statement, as
first filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (excluding exhibits
to documents incorporated by reference therein unless requested by such Holder
or Underwriter);
(g) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto;
(h) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the Underwriter(s), if any, and
their respective counsel in connection with the registration and qualification
of the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or Underwriter(s) may reasonably
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdiction of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that the Company
shall not be required (i) to register or qualify as a foreign corporation where
it is not now so qualified or (ii) to take any action that would subject it to
the service of process in suits, other than as to matters and transactions
relating to the Shelf Registration Statement, in any jurisdiction where it is
not now so subject;
(i) cooperate with the selling Holders and the Underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request at least two business days prior to any sale
of Transfer Restricted Securities;
(j) use its best efforts to cause the Transfer Restricted
Securities covered by the Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be reasonably
necessary to enable the seller or sellers thereof or the Underwriter(s), if any,
to consummate the disposition of such Transfer Restricted Securities, subject to
the provisos contained in clause (h) above;
(k) if any fact or event contemplated by clause (d)(v) above
shall exist or have occurred, prepare a post-effective amendment or supplement
to the Shelf Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(l) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration Statement
and provide the Trustee under the Indenture and/or the transfer agent for the
Common Stock with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the Depository Trust Company;
7
<PAGE>
(m) enter into such agreements (including an underwriting
agreement reasonably acceptable to the Company) and take all such other actions
in connection therewith as may reasonably be required in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant to the
Shelf Registration Agreement, in connection with an Underwritten Registration,
and (i) make such representations and warranties to the Holders and the
Underwriter(s), in form, substance and scope as they may reasonably request and
as are customarily made by issuers to Underwriters in primary Underwritten
Offerings and covering matters including, but not limited to, those set forth in
the Purchase Agreement; (ii) obtain opinions of counsel for the Company and
updates thereof in customary form and covering matters reasonably requested by
the Underwriter(s) of the type customarily covered in legal opinions to
Underwriters in connection with primary Underwritten Offerings addressed to each
selling Holder and the Underwriter requesting the same and covering the matters
as may be reasonably requested by such Holders and Underwriters; (iii) obtain
"cold comfort" letters and updates thereof from the Company's independent
certified public accountants, and the independent certified public accountants
of any other corporation or person ("Other Companies") with respect to which
audited financial statements are required to be included or incorporated by
reference in the Shelf Registration Statement, addressed to the selling Holders
of Transfer Restricted Securities and the Underwriters requesting the same, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters to Underwriters in connection with primary
Underwritten Offerings; (iv) set forth in full or incorporate by reference in
the underwriting agreement the indemnification provisions and procedures of
Section 7 hereof with respect to all parties to be indemnified pursuant to said
Section; and (v) deliver such documents and certificates as may be reasonably
requested by the Holders of the Transfer Restricted Securities being sold or the
Underwriter(s) of such Underwritten Offering to evidence compliance with clause
(i) above and with any customary conditions contained in the underwriting
agreement entered into by the Company pursuant to this clause (m). The above
shall be done at or prior to each closing under such underwriting agreement, as
and to the extent required thereunder;
(n) make available at reasonable times and in a reasonable
manner for inspection by a representative of the Holders of the Transfer
Restricted Securities, any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement and any attorney or accountant retained by
such selling Holders or any of the Underwriters all relevant financial and other
records, pertinent corporate documents and properties of the Company and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, Underwriter, attorney or accountant in
connection with such Shelf Registration Statement prior to its effectiveness;
provided, however, that such representatives, attorneys or accountants shall
agree to keep confidential (which agreement shall be confirmed in writing in
advance to the Company if the Company shall so request) all information, records
or documents made available to such persons which are not otherwise available to
the general public unless disclosure of such records, information or documents
is required by court or administrative order (of which the Company shall have
been given prior notice and an opportunity to defend) after the exhaustion of
all appeals therefrom, and to use such information obtained pursuant to this
provision only in connection with the transaction for which such information was
obtained, and not for any other purpose;
(o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, as soon as practicable, a consolidated earnings
statement, which consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Act, for the twelve-month period (i) commencing at the end
of any fiscal quarter in which Transfer Restricted Securities are sold to
Underwriters in a firm commitment or best efforts Underwritten Offering or (ii)
if not sold to Underwriters in such an offering, beginning with the first month
of the Company's first fiscal quarter commencing after the effective date of the
Shelf Registration Statement;
(p) cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
8
<PAGE>
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner;
(q) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at the earliest
possible moment;
(r) cause all Transfer Restricted Securities covered by the
Shelf Registration Statement to be listed on each securities exchange or
quotation system on which similar securities issued by the Company are then
listed if requested by the Holders of a majority of the outstanding Transfer
Restricted Securities (with holders of Common Stock constituting Transfer
Restricted Securities being deemed to be Holders of the aggregate principal
amount of Debentures converted into such Common Stock for purposes of such
calculation) or the Underwriters, if any; cause the Debentures covered by the
Shelf Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate principal amount of
such Debentures or the Underwriters; and
(s) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading or necessary to cause such
Shelf Registration Statement not to omit a material fact with respect to such
Holder necessary in order to make the statements therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the time period regarding the
effectiveness of the Shelf Registration Statement set forth in Section 3(a)
hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(d)(v)
hereof to and including the date when each selling Holder covered by such Shelf
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof or shall have received
the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) Except as set forth in Section 6(b) hereof, all expenses
incident to the Company's performance of or compliance with this Agreement (the
"Registration Expenses") will be borne by the Company, regardless of whether a
Shelf Registration Statement becomes effective, including without limitation:
(i) all registration and filing fees and expenses (including
filings made with the NASD);
9
<PAGE>
(ii) reasonable fees and expenses of compliance with federal
securities or state blue sky laws;
(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer Restricted
Securities in a form eligible for deposit with Depository Trust Company and
of printing the Prospectus and any Preliminary Prospectus), messenger and
delivery services and telephone;
(iv) fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"cold comfort" letters required by or incidental to the preparation and
filing of a Shelf Registration Statement and Prospectus and the disposition
of Transfer Restricted Securities);
(vi) fees and expenses associated with any NASD filings and
approval required to be made in connection with the Shelf Registration
Statement; and
(vii) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in accordance
with Section 5(r) hereof.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) The Holders of Transfer Restricted Securities shall bear the
expense of any broker's commission or Underwriter's discount or commission and
the fees and expenses of any counsel for the Holders. In addition, each Holder
of Transfer Restricted Securities shall pay all Registration Expenses to the
extent required by applicable law.
10
<PAGE>
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each
of the Initial Purchasers, (ii) each Holder, (iii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) either of the Initial Purchasers or any Holder (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person") and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, any Holder or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as a "Non-Company Indemnitee"), to the fullest
extent lawful, from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, Prospectus or
Preliminary Prospectus (or any amendments or supplements thereto), including any
document incorporated by reference therein, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except, with respect to
any Non-Company Indemnitee, insofar as such losses, claims, damages, liabilities
or judgments (1) are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by such Non-Company Indemnitee expressly for use therein or (2) with
respect to any Preliminary Prospectus, result from the fact that such Non-
Company Indemnity sold Transfer Restricted Securities to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the final Prospectus, as amended or supplemented, if the Company shall
have previously furnished copies thereof to such Non-Company Indemnitee in
accordance with this Agreement and the final Prospectus, as amended or
supplemented, would have corrected such untrue statement or omission.
(b) In case any action shall be brought against any Non-Company Indemnitee,
based upon the Shelf Registration Statement, Prospectus, or Preliminary
Prospectus (or any amendments or supplements thereto), and with respect to which
indemnity may be sought against the Company pursuant to this Section 7, such
Non-Company Indemnitee shall promptly notify the Company in writing and the
Company shall assume the defense thereof, including the employment of counsel
and payment of all fees and expenses; provided, however, that the omission so to
notify the Company shall not relieve the Company from any liability that it may
have to any Non-Company Indemnitee (except to the extent that the Company is
materially prejudiced or otherwise forfeits substantive rights or defenses by
reason of such failure). Such Non-Company Indemnitee shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of counsel shall be paid by such Non-Company
Indemnitee, unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense and employ counsel or (iii) the named parties to
any such action (including any impleaded parties) include both such Non-Company
Indemnitee and the Company and it would be inappropriate for the same counsel to
represent such Non-Company Indemnitee and the Company (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Non-Company Indemnitee, it being understood, however, that the Company shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
the Non-Company Indemnitees, which firm shall be designated in writing by the
Non-Company Indemnitees and whose fees and expenses reasonably incurred shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company, but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Non-Company Indemnitee from and
against any amounts payable pursuant to such written consent in connection with
such settlement. Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are at the expense of the Company
and a Non-Company Indemnitee shall have requested the Company to reimburse such
Non-Company Indemnitee for such fees and expenses of counsel as incurred, the
Company agrees that it shall be liable for any settlement of any action effected
without its written consent if (i) each settlement is entered into more than 30
business
11
<PAGE>
days after the receipt by the Company of the aforesaid request and (ii) the
Company shall have failed to reimburse such Non-Company Indemnitee in accordance
with such request for reimbursement prior to the date of such settlement. The
Company shall not, without the prior written consent of such Non-Company
Indemnitee, effect any settlement of any pending or threatened proceeding in
respect of which such Non-Company Indemnitee is or could have been a party and
indemnity could have been sought hereunder by such Non-Company Indemnitee,
unless such settlement includes an unconditional release of such Non-Company
Indemnitee from all liability on claims that are the subject matter of such
proceeding.
(c) Each Holder of Transfer Restricted Securities agrees to
indemnify and hold harmless (i) the Company, (ii) each of the Initial
Purchasers, (iii) each other Holder, (iv) any person controlling (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
the Initial Purchasers and each other Holder and (v) the respective officers,
directors, partners, employees, representatives and agents of each of the
parties referred to in clauses (i), (ii), (iii) and (iv), to the same extent as
the foregoing indemnity from the Company to each of the Non-Company Indemnitees,
but only with respect to information relating to such Holder that was furnished
in writing by such Holder to the Company expressly for use in the Shelf
Registration Statement (or any amendment or supplement thereto). In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sales of the
Transfer Restricted Securities giving rise to such indemnification obligation.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party, on the one hand, or the indemnified party, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, each of the Initial Purchasers and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The losses, claims, damages, liabilities or judgments of an indemnified party
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim (but only to the extent such investigation
or defense was reasonably necessary) prior to the indemnifying party's
assumption of the defense thereof or subsequent thereto to the extent permitted
by the second sentence of Section 7(b) hereof. Notwithstanding the provisions of
this Section 7, none of the Holders shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total amount received
by such Holder with respect to the sale of Transfer Restricted Securities
exceeds the sum of (A) the amount paid by such Holder for such Debentures plus
(B) the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective principal amount of Debentures held by each of the
Holders hereunder and not joint.
12
<PAGE>
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any of
the Debentures or shares of Common Stock that are Transfer Restricted Securities
remain outstanding and during any such period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, to make available to any
Initial Purchaser or any beneficial owner of the Debentures or shares of such
Common Stock in connection with any sale thereof and any prospective purchaser
of such Debentures or Common Stock from such Initial Purchaser or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements and (c) furnishes the Company in writing information in accordance
with Section 3(f) and agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the extent contemplated by Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the Underwriter(s) that will administer the offering will be selected
by the Holders of the Transfer Restricted Securities included in such offering
in the manner specified in Section 3(c); provided, however, that such
Underwriters must be reasonably satisfactory to the Company and further
provided, however, that notwithstanding anything contained in this Agreement to
the contrary, the Company shall not be required to undertake more than one such
Underwritten Offering during any consecutive 12 month period.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted Securities, in
--------
addition to being entitled to exercise all rights provided herein, and as
provided in the Purchase Agreement and granted by law, including recovery of
damages, will be entitled to specific performance of such Holder's rights under
this Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or
--------------------------
after the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders of Transfer Restricted
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
other agreements.
13
<PAGE>
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority of the outstanding Transfer Restricted Securities affected by such
amendment, modification, supplement, waiver or departure (with holders of Common
Stock constituting Transfer Restricted Securities being deemed to be Holders of
the aggregate principal amount of Debentures converted into such Common Stock
for purposes of such calculation). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are being
sold pursuant to such Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
shall be valid only with the written consent of Holders of at least 66-2/3% of
the Transfer Restricted Securities being sold, in each case calculated in
accordance with the provisions of Section 3(c).
(d) Notices. All notices and other communications provided for
-------
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities, at
the address set forth on the records of the Registrar under the Indenture,
with a copy to the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially at
its address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions
of this Section.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities unless
and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided, further, that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement or
applicable law. If any transferee of any Holder shall acquire Transfer
Restricted Securities, in any manner, whether by operation of law or otherwise,
such Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement and by taking and holding such Transfer Restricted Securities
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
14
<PAGE>
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement together with the other
----------------
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
ROTECH MEDICAL CORPORATION
By:_________________________________
Name: Rebecca R. Irish
Title: Chief Financial Officer and Treasurer
SMITH BARNEY INC.
NEEDHAM & COMPANY, INC.
WHEAT, FIRST SECURITIES, INC.
BY: SMITH BARNEY INC.
By:_________________________
Name:
Title:
15
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF WINDERWEEDLE, HAINES, WARD & WOODMAN, P.A. APPEARS HERE]
August 27, 1996
RoTech Medical Corporation
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
Re: RoTech Medical Corporation; Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel to RoTech Medical Corporation, a Florida
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (as amended, the "Registration Statement") under the Securities Act of
1933, as amended (the "Act"), covering: (i) $110,000,000 aggregate principal
amount of 5 1/4% Convertible Subordinated Debentures due 2003 (the "Debentures")
of the Company; and (ii) 4,190,476 shares of Common Stock, par value $.0002 per
share, of the Company (the "Common Stock") initially issuable upon conversion of
the Debentures plus an indeterminate number of shares of Common Stock as may
become issuable upon conversion of the Debentures by means of an adjustment in
the conversion price (the "Conversion Shares").
In connection with this opinion, we have: (i) investigated such questions
of law; (ii) examined originals of certified, conformed or reproduced copies of
such agreements, instruments, documents and records of the Company and its
subsidiaries, such certificates of public officials and such other documents;
and (iii) reviewed such information from officers and representatives of the
Company and its subsidiaries and others as we have deemed necessary or
appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all natural
persons executing documents, the genuineness of all signatures, the authenticity
of all original or certified documents, and the conformity to original or
certified documents of all copies submitted to us as conformed or reproduced
copies. As to various questions of fact relevant to the opinions expressed
herein, we have relied upon, and assume the accuracy of, certificates and oral
or written statements and other information of or from public officials and
officers and representatives of the Company, its subsidiaries and others.
To the extent that it may be relevant to the opinions expressed herein, we
have assumed, for the purposes of the opinions expressed herein, that: (i) the
trustee for the Debentures (the "Trustee")
<PAGE>
has the power and authority to enter into and perform the indenture for the
Debentures (the "Indenture"); (ii) the Indenture has been duly authorized,
executed and delivered by the Trustee and is a valid and binding obligation of
the Trustee, enforceable against the Trustee in accordance with its terms; and
(iii) the Debentures have been duly authenticated and delivered by the Trustee.
Based upon the foregoing, and subject to the limitations, qualifications
and assumptions set forth herein, we are of the opinion that:
1. The Debentures have been duly authorized, executed and delivered by the
Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
2. The Conversion Shares have been duly authorized and, when issued upon
the conversion of the Debentures in accordance with the terms of the Indenture,
will be validly issued, fully paid and non-assessable.
The opinions set forth above are subject to: (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or hereafter in effect
affecting creditors' rights generally; and (ii) general principles of equity
(including, without limitation, standards of materiality, good faith, fair
dealing and reasonableness) whether such principles are considered in a
proceeding in equity or at law.
The opinions expressed herein are limited to federal laws of the United
States and the laws of the State of Florida.
We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus forming a part of the Registration Statement.
In giving this consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
WINDERWEEDLE, HAINES, WARD
& WOODMAN, P.A.
By:/s/ Thomas A. Simser, Jr.
-------------------------
Thomas A. Simser, Jr.
TAS:cac
<PAGE>
EXHIBIT 12.1
ROTECH MEDICAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS, EXCEPT RATIO DATA)
<TABLE>
<CAPTION>
Nine Months Ended
Year ended July 31 April 30
1991 1992 1993 1994 1995 1995 1996
---------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from
continuing operations
before income taxes $3,404 $5,689 $8,083 $10,776 $20,946 $14,456 $23,052
Add:
Interest charges 610 305 76 67 835 763 3,098
-------- -------- -------- -------- -------- -------- --------
Income available
for fixed charges $4,014 $5,994 $8,159 $12,843 $21,781 $15,219 $26,150
======== ======== ======== ======== ======== ======== ========
Fixed charges
Interest expense 610 305 76 67 835 763 3,098
Interest component
of rent expense 0 0 0 0 0 0 0
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $610 $305 $76 $67 $835 $763 $3,098
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges 6.58x 19.65x 107.03x 192.62x 26.07x 19.94x 8.44x
</TABLE>
<PAGE>
EXHIBIT 23.2
August 26, 1996
RoTech Medical Corporation
Orlando, Florida
We consent to the incorporation by reference in this Registration Statement
of RoTech Medical Corporation on Form S-3 of our report dated October 19, 1995,
except for Income Per Share of Note 1, as to which the date is April 17, 1996,
appearing in the Current Report on Form 8-K dated August 19, 1996 of RoTech
Medical Corporation and to the reference to us under the heading "Experts" in
the Registration Statement.
Yours truly,
Deloitte & Touche LLP
<PAGE>
EXHIBIT 23.3
Consent of Independent Certified Public Accountants
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of RoTech Medical
Corporation for the registration of $110,000,000 of 5 1/4% Convertible
Subordinated Debentures due 2003 and 4,190,476 shares of its common stock and to
the incorporation by reference therein of our report dated September 15, 1993,
except for Income Per Share of Note 1 as to which the date is April 17, 1996,
with respect to the July 31, 1993 consolidated financial statements of RoTech
Medical Corporation included in its Current Report on Form 8-K dated August 19,
1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Orlando, Florida
August 26, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-3 Registration Statement of RoTech
Medical Corporation (as filed on August 27, 1996) of our report dated December
15, 1995, on the financial statements of Revco Home Health Care Centers, Inc. as
of June 3, 1995, and for the forty-four week period then ended, which is
included in RoTech Medical Corporation's Form 8K/A as filed on January 11, 1996.
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-3 Registration Statement of RoTech
Medical Corporation (as filed on August 27, 1996) of our report dated May 24,
1996, on the combined financial statements of Roth Medical, Inc. and Murray
Medical, Inc. as of December 31, 1995, and for the year then ended, which is
included in RoTech Medical Corporation's Form 8K/A as filed on May 31, 1996.
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-3 Registration Statement of RoTech
Medical Corporation (as filed on August 27, 1996) of our report dated May 10,
1996, on the financial statements of CP02, Inc. as of December 31, 1995, and for
the year then ended, which is included in RoTech Medical Corporation's Form 8K/A
as filed on May 31, 1996.
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-3 Registration Statement of RoTech
Medical Corporation (as filed on August 27, 1996) of our report dated May 16,
1996, on the financial statements of Respiratory Home Care, Inc. as of December
31, 1995, and for the year then ended, which is included in RoTech Medical
Corporation's Form 8K/A as filed on May 31, 1996.
ARTHUR ANDERSEN LLP
August 26, 1996
Cleveland, Ohio
August 26, 1996
Denver, Colorado
August 26, 1996
Orlando, Florida
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
RoTech Medical Corporation on Form S-3 of our report dated December 22, 1995, on
the financial statements of Advantage Healthcare, Inc. as of December 31, 1994,
and for the year then ended, appearing in the Form 8-K/A filed on January 11,
1996, our report dated May 10, 1996, on the financial statements of Preferred
Medical Equipment, Corp. as of December 31, 1995, and for the year then ended,
appearing in the Form 8-K/A filed on June 4, 1996, and to the reference to us as
"experts" in such Registration Statement insofar as it pertains to our report on
the financial statements referred to herein.
HAZLETT, LEWIS & BIETER, PLLC
Chattanooga, Tennessee
August 27, 1996
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated July 14, 1995, which appears in the
annual report to the Board of Directors of Valley Home Medical, Inc. for the
year ended November 30,1994, and to the reference to our Firm under the caption
"Experts" in the Prospectus.
TANNER + CO.
Salt Lake City, Utah
August 27, 1996
<PAGE>
EXHIBIT 23.7
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-3 Registration Statement of RoTech Medical Corporation
(as filed on August 27, 1996) of our report dated May 28, 1996, on the
financial statements of Physician's Management Group, Inc., as of December 31,
1994, which is included in RoTech Medical Corporation's Form 8-K/A as filed on
June 4, 1996.
LaPorte, Sehrt, Romig & Hand
A Professional Accounting Corporation
August 27, 1996
Metairie, LA
<PAGE>
EXHIBIT 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-3 Registration Statement of RoTech Medical Corporation
(as filed on August 27, 1996) of our report dated May 24, 1996, on the
financial statements of G & G Medical, Inc. as of and for the year ended March
31, 1995, which is included in RoTech Medical Corporation's Form 8-K/A as filed
on June 4, 1996.
Dalby, Wendland & Co., P.C.
Grand Junction, Colorado
August 27, 1996
<PAGE>
EXHIBIT 23.9
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-3 Registration Statement of RoTech Medical Corporation
(as filed on August 27, 1996) of our report dated July 29, 1996, on the
financial statements of Wound Management Services, Inc. as of December 31, 1995,
and for the year ended, which is included in RoTech Medical Corporation's Form
8-K/A dated April 1, 1996 as filed on June 4, 1996.
/s/ Michael Galloway & Company
August 27, 1996
Orlando, Florida
<PAGE>
EXHIBIT 23.10
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-3 Registration Statement of RoTech Medical Corporation
(as filed on August 27, 1996) of our report dated February 20, 1996, on the
financial statements of Rhema, Inc., as of December 31, 1995, which is included
in RoTech Medical Corporation's Form 8-K/A as filed on June 4, 1996.
/s/ Hartman, Walton & Leito, L.L.P.
- ----------------------------------------
Hartman, Walton & Leito, L.L.P.
August 27,1996
Fort Worth, Texas
<PAGE>
EXHIBIT 25.1
SECURITIES ACT OF 1933 FILE NO. ____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) [ ]
-----------------------
PNC BANK, KENTUCKY, INC.
------------------------
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
COMMONWEALTH OF KENTUCKY 61-0191580
- -------------------------------- -------------------
(STATE OF INCORPORATION IF NOT A (I.R.S. EMPLOYER
NATIONAL BANK) IDENTIFICATION NO.)
500 W. JEFFERSON STREET
LOUISVILLE, KENTUCKY 40202
- ---------------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
-----------------------
MARTHA A. ZISKIND
VICE PRESIDENT
PNC BANK, KENTUCKY, INC.
500 W. JEFFERSON STREET
LOUISVILLE, KENTUCKY 40202
(502) 581-3231
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
ROTECH MEDICAL CORPORATION
----------------------------
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-2115892
- ----------------------- -----------------------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
4506 L.B. MCLEOD ROAD, SUITE F, ORLANDO, FLORIDA 32811
- ------------------------------------------------- ---------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
$126,500,000 CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003
-----------------------------------------------------------
(TITLE OF THE INDENTURE SECURITIES)
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TRUSTEE:
--------------------
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
FEDERAL RESERVE BANK OF ST. LOUIS
411 LOCUST STREET, P. O. BOX 442
ST. LOUIS, MO 63266
DEPARTMENT OF FINANCIAL INSTITUTIONS
COMMONWEALTH OF KENTUCKY
477 VERSAILLES ROAD
FRANKFORT, KY 40601
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
THE TRUSTEE IS AUTHORIZED TO EXERCISE CORPORATE
TRUST POWERS.
2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE,
--------------------------
DESCRIBE EACH SUCH AFFILIATION.
NOT APPLICABLE.
3. VOTING SECURITIES OF THE TRUSTEE. FURNISH THE FOLLOWING INFORMATION AS TO
---------------------------------
EACH CLASS OF VOTING SECURITIES OF THE TRUSTEE.
AS OF AUGUST 27, 1996
----------------
COL. A COL. B
---------------- ----------------
(TITLE OF CLASS) AMOUNT OUTSTANDING
---------------- ------------------
PNC BANK, KENTUCKY, INC.
COMMON STOCK, PAR VALUE $30 PER SHARE 2,000,000 SHARES
PNC BANK CORP.
COMMON STOCK, PAR VALUE $5 PER SHARE 341,586,811 SHARES
4. TRUSTEESHIPS UNDER OTHER INDENTURES. IF THE TRUSTEE IS A TRUSTEE UNDER
-----------------------------------
ANOTHER INDENTURE UNDER WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF
INTEREST OR PARTICIPATION IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE
OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
NOT APPLICABLE.
<PAGE>
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the
Act arises as a result of the trusteeship under any such other indenture,
including a statement as to how the indenture securities will rank as
compared with the securities issued under other such other indenture.
NOT APPLICABLE.
5. Interlocking directorates and similar relationships with the obligor or
-----------------------------------------------------------------------
underwriters. If the trustee or any of the directors or executive officers of
- ------------
the trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor, identify
each such person having any such connection and state the nature of each such
connection.
NOT APPLICABLE.
6. Voting securities of the trustee owned by the obligor or its officials.
----------------------------------------------------------------------
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner and executive
officer of the obligor:
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Column C
------------- -------------- ------------ ---------------
NOT APPLICABLE.
7. Voting securities of the trustee owned by underwriter or their officials.
------------------------------------------------------------------------
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, executive officer of each such underwriter:
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Column C
------------- -------------- ------------ ---------------
NOT APPLICABLE.
<PAGE>
8. Securities of the obligor owned or held by the trustee. Furnish the
-------------------------------------------------------
following information as to securities of the obligor owned beneficially or held
as collateral security for obligations in default by the trustee.
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Amount Owned
Beneficially
Whether the or Held as
Securities are Collateral Percent of
Voting or Security for Class Represented
Nonvoting Obligations in by Amount Given
Title of Class Securities Default in Column C
-------------- -------------- ------------ ---------------
NOT APPLICABLE.
9. Securities of the underwriters owned or held by the trustee. If the trustee
-----------------------------------------------------------
owns beneficially or holds as collateral security for obligations in default any
securities of an underwriter for the obligor, furnish the following information
as to each class of securities of such underwriter any of which are so owned or
held by the trustee:
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Amount Owned
Beneficially
or Held as
Collateral Percent of
Title of Issuer Security for Class Represented
and Amount Obligations in by Amount Given
Title of Class Outstanding Default by Trustee in Column C
--------------- ----------- ------------------ -----------------
NOT APPLICABLE.
<PAGE>
10. Ownership or holdings by the trustee of voting securities of certain
--------------------------------------------------------------------
affiliates or security holders of the obligor. If the trustee owns beneficially
- ---------------------------------------------
or holds collateral security for obligations in default voting securities of a
person who, to the knowledge of the trustee (1) owns 10% or more of the voting
securities of the obligor or (2) is an affiliate, other than a subsidiary, of
the obligor, furnish the following information as to the voting securities of
such person:
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Amount Owned
Beneficially
or Held as
Collateral Percent of
Title of Issuer Security for Class Represented
and Amount Obligations in by Amount Given
Title of Class Outstanding Default by Trustee in Column C
-------------- ----------- ------------------ -----------------
NOT APPLICABLE.
11. Ownership or holdings by the trustee of any securities of a person owning
-------------------------------------------------------------------------
50 percent or more of the voting securities of the obligor. If the trustee owns
- ----------------------------------------------------------
beneficially or holds as collateral security for obligations in default any
securities of a person who, to the knowledge of the trustee, owns 50 percent or
more of the voting securities of the obligor, furnish the following information
as to each class of securities of such person any of which are so owned or held
by the trustee:
AS OF AUGUST 27, 1996
----------------
Column A Column B Column C Column D
Amount Owned
Beneficially
or Held as
Collateral Percent of
Title of Issuer Security for Class Represented
and Amount Obligations in by Amount Given
Title of Class Outstanding Default by Trustee in Column C
-------------- ----------- ------------------ -----------------
NOT APPLICABLE.
<PAGE>
12. Indebtedness of the obligor to the trustee. Except as noted in the
------------------------------------------
instructions, if the obligor is indebted to the trustee, furnish the following
information:
AS OF AUGUST 27, 1996
---------------
Column A Column B Column C
Nature of Amount
Indebtedness Outstanding Due Date
------------ ----------- ------------
Revolving Line of Credit $30,000,000 May 30, 1997
13. Defaults by the obligor.
-----------------------
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is the trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
NOT APPLICABLE.
14. Affiliation with the Underwriters. If any underwriter is an
----------------------------------
affiliate of the trustee, describe each such affiliation.
NOT APPLICABLE.
15. Foreign Trustee. Identify the order or rule pursuant to
----------------
which the foreign trustee is authorized to act as sole trustee
under indentures qualified or to be qualified under the Act.
NOT APPLICABLE.
16. List of Exhibits. List below all exhibits filed as part of
-----------------
this statement of eligibility.
1. A copy of the Articles of Incorporation of the Trustee now in effect
is hereby incorporated by reference to Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 22-23572, dated as of
February 24, 1993.
<PAGE>
2. Certificate of authority of the Trustee to commence business, contained
in the Articles of Incorporation is hereby incorporated by reference to
Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 22-23572, dated as of February 24, 1993.
3. Authorization of the Trustee to exercise corporate trust powers,
contained in the Articles of Incorporation is hereby incorporated by
reference to Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 22-23572, dated as of February 24, 1993.
4. A copy of the existing By-Laws of the trustee is hereby incorporated by
reference to Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 22-23572, dated as of February 24, 1993.
5. Copy of each indenture referred to in Item 4, if the obligor is in
default. Not applicable.
6. The consent of United States institutional trustees required by Section
321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is hereby incorporated by reference to its Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 and Quarterly
Report on Form 10-Q for the Quarter ended June 30, 1996 which were
previously filed with the Commission.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, PNC Bank, Kentucky, Inc., a corporation organized and existing under
the laws of the Commonwealth of Kentucky, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Louisville and State of Kentucky on the 27th day
----
of AUGUST, 1996.
PNC BANK, KENTUCKY, INC.
By: /s/ W. Michael Hanks
------------------------
W. Michael Hanks
Vice President
<PAGE>
EXHIBIT 6
---------
THE CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(B) OF THE ACT
PNC Bank, Kentucky, Inc., the Trustee executing the statement of eligibility
and qualification to which this Exhibit is attached does hereby consent that
reports of examinations of the undersigned by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefore in accordance with the provisions of
Section 321(b) of the Trust Indenture Act of 1939.
PNC BANK, KENTUCKY, INC.
BY:/s/ W. Michael Hanks
------------------------
W. Michael Hanks
Vice President
August 27, 1996
-----------------
Date
