AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1998
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
<TABLE>
<CAPTION>
IRS EMPLOYER
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION OF PRIMARY STANDARD INDUSTRIAL IDENTIFICATION
AS SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION CLASSIFICATION CODE NUMBER NUMBER
- --------------------------- ----------------------------- -------------------------- --------------
<S> <C> <C> <C>
CONMED Corporation New York 3845 16-0977505
Aspen Laboratories, Inc. Colorado 3845 84-0692164
Consolidated Medical Equipment
International, Inc. New York 3845 16-1237634
CONMED Andover Medical, Inc. New York 3845 04-3195182
Birtcher Medical Systems, Inc. California 3845 95-0552628
Envision Medical Corporation California 3841 77-0273890
Linvatec Corporation Florida 3841 59-1086703
NDM, Inc. New York 3845 16-1495367
</TABLE>
310 BROAD STREET
UTICA, NEW YORK 13501
(315) 797-8375
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
------------------------------------
JOSEPH J. CORASANTI
VICE PRESIDENT--LEGAL AFFAIRS AND GENERAL COUNSEL
310 BROAD STREET
UTICA, NEW YORK 13501
(315) 797-8375
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
Robert W. Downes
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------------------------------
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the Securities registered on this Form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |-| ________________
------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9% Senior Subordinated Notes due 2008
of CONMED Corporation.................. $130,000,000 100% $130,000,000 $38,350
- ------------------------------------------------------------------------------------------------------------------------------------
Subsidiary Guarantees of 9% Senior
Subordinated Notes..................... $130,000,000 100% $130,000,000 --(2)
====================================================================================================================================
<FN>
(1) Estimated for the sole purpose of computing the registration fee in
accordance with Rule 457(o).
(2) In accordance with Rule 457(n), no separate fee is required for the
guarantees of the 9% Senior Subordinated Notes due 2008 of CONMED
Corporation, which are being registered concurrently.
</FN>
</TABLE>
------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
RED HERRING TEXT BELOW
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.
<PAGE>
SUBJECT TO COMPLETION; DATED APRIL 8, 1998
OFFER TO EXCHANGE
9% Senior Subordinated Notes
due 2008
for
all outstanding
9% Senior Subordinated Notes
due 2008
($130,000,000 principal amount outstanding)
of
CONMED CORPORATION
(in each case, guaranteed by the
subsidiaries of CONMED Corporation)
------------------
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON ____________, 1998, UNLESS EXTENDED
------------------
CONMED Corporation, a New York corporation (the "Company") hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the "Letter of
Transmittal," and together with this Prospectus, the "Exchange Offer"), to
exchange $1,000 principal amount of its 9% Senior Subordinated Notes due 2008
(the "New Notes"), which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement (as
defined herein) of which this Prospectus constitutes a part, for each $1,000
principal amount of the outstanding 9% Senior Subordinated Notes due 2008 (the
"Old Notes") of the Company, of which $130,000,000 principal amount is
outstanding. The New Notes and the Old Notes are collectively referred to herein
as the "Notes." The Old Notes are, and the New Notes will be, guaranteed (the
"Guarantees"), jointly and severally, on an unsecured senior subordinated basis
by the Company's subsidiaries as "Guarantors" (as defined herein).
The Company will accept for exchange any and all Old Notes that are
validly tendered on or prior to 5:00 p.m., New York City time, on the date the
Exchange Offer expires, which will be ________ __, 1998, unless the Exchange
Offer is extended (the "Expiration Date"). Tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the business day prior to
the Expiration Date, unless previously accepted for payment. The Exchange Offer
is not conditioned upon any minimum principal amount of Old Notes being tendered
for exchange. However, the Exchange Offer is subject to certain conditions which
may be waived by the Company and to the terms and provisions of the Registration
Rights Agreement (as defined herein). See "The Exchange Offer." Old Notes may be
tendered only in denominations of $1,000 and integral multiples thereof.
The New Notes will be obligations of the Company entitled to the
benefits of the Indenture (as defined herein). The form and terms of the New
Notes are the same in all material respects as the form and terms of the Old
Notes, except that the New Notes have been registered under the Securities Act
and will not contain terms restricting the transfer thereof. Following the
completion of the Exchange Offer, except as provided herein, none of the Notes
(including any Old Notes not tendered in exchange for New Notes) will be
entitled to the benefits of the Registration Rights Agreement relating to the
payment of Liquidated Damages (as defined herein). See "The Exchange Offer."
INVESTMENT IN THE NOTES INVOLVES SIGNIFICANT RISKS DISCUSSED UNDER
"RISK FACTORS" BEGINNING ON PAGE 15 WHICH SHOULD BE CONSIDERED
BY INVESTORS.
The New Notes will bear interest from March 5, 1998. Holders of Old
Notes whose Old Notes are accepted for exchange will be deemed to have waived
the right to receive any payment in respect of interest on the Old Notes accrued
from March 5, 1998, to the date of the issuance of the New Notes. Interest on
the New Notes is payable semi-annually on March 15, 1998 and September 15 of
each year, commencing September 15, 1998, accruing from March 5, 1998 at a rate
of 9% per annum.
(Continued on next page)
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is ______ __, 1998.
<PAGE>
(Cover page continued)
The Old Notes are, and the New Notes will be, redeemable for cash at
any time on or after March 15, 2003, at the option of the Company, in whole or
in part, at the redemption prices set forth herein, plus accrued and unpaid
interest to the date of redemption. In addition, on or before March 15, 2001,
the Company may, at its option, redeem up to 35% of the aggregate principal
amount of the Notes originally issued with the net proceeds of one or more
offerings of common stock of the Company for cash at a redemption price of 109%
of the principal amount thereof plus accrued and unpaid interest to the date of
redemption; provided that at least 65% of the aggregate principal amount of the
Notes remain outstanding after giving effect to any such redemption. Upon a
Change of Control (as defined herein), the holders of the Notes will have the
right to require the Company to repurchase their Notes, in whole or in part, at
a purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest to the repurchase date. See "Description of New Notes."
The Old Notes are, and the New Notes will be, general unsecured
obligations of the Company, subordinated in right of payment to the prior
payment in full of all existing and future Senior Debt (as defined herein) of
the Company, including the obligations of the Company under the Credit Facility
(as defined herein). The Guarantees are subordinated in right of payment to the
prior payment in full of all existing and future Senior Debt of the Guarantors,
including the obligations of the Guarantors under the Credit Facility. As of
December 31, 1997, on a pro forma basis after giving effect to the offering of
the Old Notes (the "Offering") and the application of the estimated net proceeds
therefrom, the Company would have had $239.5 million of Senior Debt outstanding
and the Guarantors would have had no Senior Debt outstanding other than
guarantees by the Guarantors of the Company's obligations under the Credit
Facility. See "Risk Factors--Ranking of the Notes" and "Capitalization" for
additional information concerning indebtedness of the Company and its
subsidiaries.
Old Notes were represented by global Note certificates in definitive
fully registered form without coupons, registered in the name of a nominee of
The Depository Trust Company ("DTC"), as depositary. The New Notes exchanged for
Old Notes represented by the global Note certificates will be represented by
global Note certificates in definitive fully registered form without coupons,
registered in the name of the nominee of DTC, as depositary, unless the
beneficial holders thereof request otherwise. The global Note certificates will
be exchangeable, upon ten days prior written notice, for New Notes in definitive
fully registered form without coupons, in denominations of $1,000 and integral
multiples thereof. See "Description of New Notes--Book-Entry Delivery and Form."
The Old Notes were sold by the Company on March 5, 1998 to the Initial
Purchasers (as defined below) in a transaction not registered under the
Securities Act in reliance upon the exemption provided in Section 4(2) of the
Securities Act. The Initial Purchasers subsequently resold the Old Notes to
qualified institutional buyers in reliance upon Rule 144A under the Securities
Act. Accordingly, the Old Notes may not be otherwise transferred unless so
registered or unless an applicable exemption from the registration requirements
of the Securities Act is available. The New Notes are being offered hereunder in
order to satisfy the obligations of the Company under the Registration Rights
Agreement (as defined below). See "The Exchange Offer."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
the New Notes issued pursuant to the Exchange Offer may be offered for resale,
resold and otherwise transferred by holders thereof (other than any such holder
that is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders have no
arrangements with any person to participate in the distribution (within the
meaning of the Securities Act) of such New Notes. Persons wishing to exchange
Old Notes in the Exchange Offer must represent to the Company that such
conditions have been met.
Each broker-dealer that receives New Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of New Notes
received in exchange for Old Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 90 days after the
consummation of the Exchange Offer, it will use its reasonable efforts to make
this Prospectus and any amendment or supplement to this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
-2-
<PAGE>
Any Old Notes not tendered and accepted in the Exchange Offer will
remain outstanding. To the extent that any Old Notes are tendered and accepted
in the Exchange Offer, a holder's ability to sell untendered Old Notes could be
adversely affected. Following consummation of the Exchange Offer, the holders of
Old Notes will continue to be subject to the existing restrictions upon transfer
thereof and, except as provided herein, the Company will have no further
obligation to such holders to provide for the registration under the Securities
Act of the Old Notes held by them. See "Risk Factors -- Consequences of the
Exchange Offer on Non-Tendering Holders of the Old Notes."
The Company will not receive any proceeds from this offering, and no
underwriter is being utilized in connection with the Exchange Offer.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers or others soliciting
acceptances of the Exchange Offer. Holders of Old Notes who tender in the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Notes pursuant to the Exchange Offer. The Company
will pay all charges and expenses, other than certain applicable taxes, in
connection with the Exchange Offer. See "Fees and Expenses."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
The New Notes are a new issue of securities for which there is
currently no trading market. If the New Notes are traded after their initial
issuance, they may trade at a discount from their principal amount, depending
upon prevailing interest rates, the market for similar securities and other
factors, including general economic conditions and the financial condition and
performance of, and prospects for, the Company. Salomon Brothers Inc and Chase
Securities, Inc. (the "Initial Purchasers") have advised the Company that they
currently intend to make a market in the Old Notes and the New Notes. However,
they are not obligated to do so, and any market making activity with respect to
the Old Notes and the New Notes may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the Old Notes and the New Notes. In connection with the issuance of
the Old Notes, the Company arranged for the Old Notes to be designated for
trading in the Nasdaq Stock Market's Portal Market(sm). The Company does not
intend to apply for listing of the New Notes on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System.
TABLE OF CONTENTS
PAGE
----
Available Information.................................................... 4
Incorporation of Certain Documents by Reference.......................... 4
Summary.................................................................. 6
The Company.............................................................. 6
Summary of the Terms of the Exchange Offer............................... 8
Summary Description of New Notes......................................... 11
Selected Financial Data.................................................. 13
Risk Factors............................................................. 15
Use of Proceeds.......................................................... 21
The Exchange Offer....................................................... 22
Description of the Credit Facility....................................... 29
Description of New Notes................................................. 30
Certain Federal Income Tax Consequences.................................. 61
Plan of Distribution..................................................... 62
Validity of New Notes and Guarantees..................................... 62
Experts.................................................................. 62
-3-
<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 reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed by
the Company may be inspected and copied at the public reference facilities of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices: Seven World Trade
Center, Suite 1300, New York, New York 10048; and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such material
can be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a website at www.sec.gov that contains
periodic reports and other information filed by the Company.
This Prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto and reference is
hereby made to the Registration Statement and the exhibits and schedules thereto
for further information with respect to the Company and the securities offered
hereby. Statements contained herein concerning the provisions of any documents
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission are not necessarily complete, and in each instance reference is made
to the copy of such document so filed. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents or information filed with the Commission:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "Form 10-K");
(b) the Company's Current Reports on Form 8-K filed January 8,
1998, February 17, 1998 and March 10, 1998 (the "Form 8-Ks");
(c) all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act on or after the date of this
Prospectus and prior to the termination of the offering made hereby.
Any statement contained herein or in any document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for the purpose of this Prospectus to the extent that a subsequent
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE
TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS
DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE INFORMATION INCORPORATED HEREIN BY REFERENCE OTHER THAN EXHIBITS TO
SUCH INFORMATION (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH INFORMATION). THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES ARE
LOCATED AT 310 BROAD STREET, UTICA, NEW YORK 13501, AND ITS TELEPHONE NUMBER IS
(315) 797-8375. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE SECRETARY OF
THE COMPANY AT ITS EXECUTIVE OFFICES. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY _______ __, 1998.
-4-
<PAGE>
---------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE EXCHANGE AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH TOGETHER, NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH
TOGETHER, CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------------------
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This Prospectus (including the documents incorporated by reference
herein) contains certain forward-looking statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995) and information relating
to the Company that is based on the beliefs of the management of the Company, as
well as assumptions made by and information currently available to the
management of the Company. When used in this Prospectus (including the documents
incorporated by reference herein), the words "estimate," "project," "believe,"
"anticipate," "intend," "expect" and similar expressions are intended to
identify forward-looking statements. Such statements involve known and unknown
risks, uncertainties and other factors, including those identified under the
caption "Risk Factors" and elsewhere in this Prospectus (including the documents
incorporated by reference herein) that may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economic and business conditions; changes in customer
preferences; competition; changes in technology; the integration of any
acquisitions, including the Linvatec Acquisition (as defined herein); changes in
business strategy; the indebtedness of the Company; quality of management,
business abilities and judgment of the Company's personnel; the availability,
terms and deployment of capital; and various other factors referenced in this
Prospectus (including the documents incorporated by reference herein). See
"Summary" herein, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business" in the Company's Form 10-K. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company does not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
-5-
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information, financial statements
and pro forma financial information appearing elsewhere in this Prospectus or
incorporated by reference herein. As used in this Prospectus, "CONMED" means
CONMED Corporation, a New York corporation, and its subsidiaries other than
Linvatec; "Linvatec" means Linvatec Corporation, a Florida corporation, which
became a wholly-owned subsidiary of CONMED on December 31, 1997, together with
its wholly-owned subsidiary Envision Medical Corporation, a California
corporation; and the "Company," unless the context otherwise requires, means
CONMED and Linvatec together. Unless otherwise indicated, pro forma results of
operations data presented herein gives pro forma effect to the Linvatec
Acquisition as if it had occurred on January 1, 1997. An investment in the Notes
involves significant risks. See "Risk Factors." See also "Private Securities
Litigation Reform Act Safe Harbor Statement" relating to certain forward-looking
statements in this Prospectus.
THE COMPANY
The Company is a leading developer, manufacturer and supplier of a
broad range of medical instruments and systems used in surgical and other
medical procedures. The Company's product offerings include electrosurgical
systems, electrocardiogram ("ECG") electrodes and accessories, surgical suction
instruments, intravenous ("IV") therapy accessories and wound care products. In
addition, through its recent acquisition of Linvatec, the Company has broadened
its product offerings to include arthroscopic surgery devices and products,
powered surgical instruments and imaging products for minimally-invasive
surgery. The Company's products are used in a variety of clinical settings, such
as operating rooms, surgery centers, physicians' offices and critical care areas
of hospitals. On a pro forma basis, approximately 75% of the Company's revenues
in 1997 were derived from the sale of single-use, disposable products. In
addition, on a pro forma basis, approximately 22% of the Company's revenues in
1997 were derived from sales outside of the United States.
The Company has used strategic business acquisitions to broaden its
product offerings, increase its market share in certain product lines and
realize economies of scale. During the last five years, the Company has
completed seven business acquisitions, including the recent acquisition of
Linvatec. The completed acquisitions, together with internal growth, have
resulted in a compound annual growth rate in net sales and EBITDA (as defined
below) of 27% and 47%, respectively, between 1993 and 1997 (57% and 81%,
respectively, on a pro forma basis).
On December 31, 1997, the Company acquired Linvatec and certain related
assets from Bristol-Myers Squibb Company ("BMS"). The Company expects the
Linvatec Acquisition (as defined below) to provide significant strategic
benefits, including providing the Company with expanded product lines, enhanced
technological capabilities and increased access to international markets. In
addition, the Company has identified opportunities to generate efficiencies in
manufacturing and overhead functions resulting from the Linvatec Acquisition,
which it believes could generate annual cost savings beyond those reflected in
the Company's pro forma financial statements. See "Selected Financial Data and
Summary Unaudited Pro Forma Adjusted Consolidated Financial Information" herein
and "Unaudited Pro Forma Consolidated Financial Information" in the Company's
Form 8-K filed February 17, 1998. On a pro forma basis, the Company's net sales
and EBITDA for 1997 were $327.4 million and $75.8 million, respectively.
See "Business--Industry," "Business--Competitive Strengths" and
"Business--Business Strategy" in the Company's Form 10-K for a description of
the industry in which the Company operates and the Company's competitive
strengths and business strategies.
THE LINVATEC ACQUISITION
On December 31, 1997, the Company acquired Linvatec and certain assets
related to Linvatec's business and the Hall Surgical business from BMS for
approximately $370 million in cash (subject to certain adjustments) and a
ten-year warrant (the "BMS Warrant") to purchase 1.0 million shares of the
Company's common stock at a price of $34.23 per share (collectively, with the
financing discussed in the following sentence, the "Linvatec Acquisition"). The
cash purchase price was financed through borrowings under a senior secured
credit facility (the "Credit Facility"). The Company incurred a one-time,
non-cash acquisition charge of $34.0 million at the closing of the Linvatec
Acquisition,
-6-
<PAGE>
which has been accounted for using the purchase method of accounting for the
write-off of in-process research and development costs.
HISTORY
The Company was founded in 1970 by Eugene R. Corasanti, the Company's
Chairman of the Board, Chief Executive Officer and President. In 1987, the
Company completed its initial public offering and in 1991 and 1996 completed
additional common stock offerings. Since 1993, the Company has completed seven
acquisitions. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the Form 10-K. The Company's principal offices are
located at 310 Broad Street, Utica, New York 13501, and the Company's telephone
number is (315) 797-8375.
RISK FACTORS AND FORWARD LOOKING STATEMENTS
See "Risk Factors" beginning on page 15 for a discussion of certain
factors that could hinder or prevent the Company from utilizing its competitive
strengths or carrying out its business strategies. See also "Private Securities
Litigation Reform Act Safe Harbor Statement" relating to forward looking
statements in this Prospectus.
-7-
<PAGE>
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $130,000,000
aggregate principal amount of New Notes for up to an equal aggregate principal
amount of Old Notes. The Old Notes are, and the New Notes will be, obligations
of the Company entitled to the benefits of the Indenture. The form and terms of
the New Notes are the same in all material respects as the form and terms of the
Old Notes, except that the New Notes have been registered under the Securities
Act and will not contain terms restricting the transfer thereof (and hence,
except as set forth herein, are not entitled to the benefits of the Registration
Rights Agreement relating to the payment of Liquidated Damages). The Old Notes
and the New Notes are herein collectively referred to as the "Notes." See
"Description of New Notes."
THE EXCHANGE OFFER............... $1,000 principal amount of New Notes will be
issued in exchange for each $1,000 principal
amount of Old Notes validly tendered and
accepted pursuant to the Exchange Offer. As
of the date hereof, $130,000,000 in
aggregate principal amount of Old Notes were
outstanding. The Company will issue the New
Notes to tendering holders of Old Notes
promptly after the Expiration Date.
RESALE........................... The Company believes that the New Notes
issued pursuant to the Exchange Offer
generally will be freely transferable by the
holders thereof without registration or any
prospectus delivery requirement under the
Securities Act, except that a "dealer" or
any "affiliate" of the Company, as such
terms are defined under the Securities Act,
that exchanges Old Notes held for its own
account (a "Restricted Holder") may be
required to deliver copies of this
Prospectus or an amended and supplemented
prospectus in connection with any resale of
the New Notes issued in exchange for such
Old Notes. See "The Exchange Offer--General"
and "Plan of Distribution."
Any holder who tenders in the Exchange Offer
with the intention to participate, or for
the purpose of participating, in a
distribution of the New Notes cannot rely on
the position of the staff of the Commission
set forth in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan
Stanley & Co. Incorporated (available June
5, 1991) or similar no-action letters and,
in the absence of an exemption therefrom,
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with the resale
transaction. Failure to comply with such
requirements in such instance may result in
such holder incurring liability under the
Securities Act for which the holder is not
indemnified by the Company.
EXPIRATION DATE.................. 5:00 p.m., New York City time, on
____________, 1998, unless the Exchange
Offer is extended, in which case the term
"Expiration Date" means the latest date and
time to which the Exchange Offer is
extended. See "The Exchange
Offer--Expiration Date; Extensions;
Amendments."
ACCRUED INTEREST ON THE
NEW NOTES AND THE
OLD NOTES...................... The New Notes will bear interest from March
5, 1998. Holders of Old Notes whose Old
Notes are accepted for exchange will be
deemed to have waived the right to receive
any payment in respect of interest on such
Old Notes accrued from March 5, 1998 to the
date of the issuance of the New Notes.
Consequently, holders who exchange their Old
Notes for New Notes will receive the same
interest payment on September 15, 1998 (the
first interest payment date with respect to
the Old Notes and the New Notes) that they
would have received had they not accepted
the Exchange Offer. See "The Exchange
Offer--Interest on the New Notes."
-8-
<PAGE>
TERMINATION OF THE EXCHANGE
OFFER.......................... The Company may terminate the Exchange Offer
if it determines that its ability to proceed
with the Exchange Offer could be materially
impaired due to any legal or governmental
action, any new law, statute, rule or
regulation or any interpretation of the
staff of the Commission of any existing law,
statute, rule or regulation, if the
consummation of the Exchange Offer would
violate the Indenture or the Credit
Agreement or if the Company deems it
advisable to terminate the Exchange Offer.
Holders of Old Notes will have certain
rights against the Company under the
Registration Rights Agreement should the
Company fail to consummate the Exchange
Offer. See "The Exchange
Offer--Termination." The Exchange Offer is
not conditioned upon any minimum principal
amount of Old Notes being tendered.
No federal or state regulatory requirements
must be complied with or approvals obtained
in connection with the Exchange Offer, other
than applicable requirements under federal
and state securities laws.
PROCEDURES FOR TENDERING
OLD NOTES...................... Each holder of Old Notes wishing to accept
the Exchange Offer must complete, sign and
date the accompanying Letter of Transmittal,
or a facsimile thereof, in accordance with
the instructions contained herein and
therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile,
together with the Old Notes to be exchanged
and any other required documentation to
First Union National Bank, as Exchange
Agent, at the address set forth herein and
therein, or effect a tender of Old Notes
pursuant to the procedures for book-entry
transfer as provided for herein. See "The
Exchange Offer--Procedures for Tendering."
By executing the Letter of Transmittal, each
holder will represent to the Company that,
among other things, the holder or the person
receiving such New Notes, whether or not
such person is the holder, is acquiring the
New Notes in the ordinary course of business
and that neither the holder nor any such
other person has any arrangement or
understanding with any person to participate
in the distribution of such New Notes and
that neither the holder nor any such other
person is an "affiliate" of the Company
within the meaning of Rule 405 under the
Securities Act.
SPECIAL PROCEDURES FOR
BENEFICIAL HOLDERS............. Any beneficial holder whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other
nominee and who wishes to tender in the
Exchange Offer should contact such
registered holder promptly and instruct such
registered holder to tender on his behalf.
If such beneficial holder wishes to tender
on his own behalf, such beneficial holder
must, prior to completing and executing the
Letter of Transmittal and delivering his Old
Notes, either make appropriate arrangements
to register ownership of the Old Notes in
such holder's name or obtain a properly
completed bond power from the registered
holder. The transfer of record ownership may
take considerable time. See "The Exchange
Offer--Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES..................... Holders of Old Notes who wish to tender
their Old Notes and whose Old Notes are not
immediately available or who cannot deliver
their Old Notes (or who cannot complete the
procedure for book-entry transfer on a
timely basis) and a properly completed
Letter of Transmittal or any other documents
required by the Letter of
-9-
<PAGE>
Transmittal to the Exchange Agent prior to
the Expiration Date may tender their Old
Notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS................ Tenders of Old Notes may be withdrawn at any
time prior to 5:00 p.m., New York City time,
on the business day prior to the Expiration
Date, unless previously accepted for
exchange. See "The Exchange Offer--
Withdrawal of Tenders."
ACCEPTANCE OF OLD NOTES
AND DELIVERY OF NEW
NOTES.......................... Subject to certain conditions (as summarized
above in "Termination of the Exchange Offer"
and described more fully in "The Exchange
Offer-- Termination"), the Company will
accept for exchange any and all Old Notes
which are properly tendered in the Exchange
Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer will
be delivered promptly following the
Expiration Date. See "The Exchange
Offer--General."
EFFECT ON HOLDERS OF OLD
NOTES.......................... As a result of the making of this Exchange
Offer, the Company will have fulfilled one
of its obligations under the Registration
Rights Agreement and, except as otherwise
provided herein, holders of Old Notes who do
not tender their Old Notes will not have any
further registration rights under the
Registration Rights Agreement or otherwise.
Such holders will continue to hold the
untendered Old Notes and will be entitled to
all the rights and subject to all the
limitations applicable thereto under the
Indenture, except to the extent such rights
or limitations, by their terms, terminate or
cease to have further effectiveness as a
result of the Exchange Offer. All untendered
Old Notes will continue to be subject to
certain restrictions on transfer.
Accordingly, if any Old Notes are tendered
and accepted in the Exchange Offer, the
trading market for the untendered Old Notes
could be adversely affected. See "Risk
Factors-- Consequences of the Exchange Offer
on Non-Tendering Holders of the Old Notes."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES................... The exchange pursuant to the Exchange Offer
will generally not be a taxable event for
federal income tax purposes. See "Certain
Federal Income Tax Consequences."
EXCHANGE AGENT................... The First Union National Bank, the Trustee
under the Indenture, is serving as exchange
agent (the "Exchange Agent") in connection
with the Exchange Offer. See "The Exchange
Offer -- Exchange Agent."
The Company has not retained any
dealer-manager in connection with the
Exchange Offer and will not make any
payments to brokers or others soliciting
acceptances of the Exchange Offer. Holders
of Old Notes who tender in the Exchange
Offer will not be required to pay brokerage
commissions or fees or, subject to the
instructions in the Letter of Transmittal,
transfer taxes with respect to the exchange
of Old Notes pursuant to the Exchange Offer.
The Company will pay all charges and
expenses, other than certain applicable
taxes, in connection with the Exchange
Offer. See "Fees and Expenses."
USE OF PROCEEDS.................. There will be no cash proceeds payable to
the Company from the issuance of the New
Notes pursuant to the Exchange Offer. Net
proceeds received by the
-10-
<PAGE>
Company from the sale of the Old Notes were
used to reduce outstanding term loans under
the Credit Facility.
SUMMARY DESCRIPTION OF NEW NOTES
SECURITIES OFFERED............... $130,000,000 PRINCIPAL AMOUNT OF 9% SENIOR
SUBORDINATED NOTES DUE 2008 (THE "NEW
NOTES").
MATURITY DATE.................... MARCH 15, 2008.
INTEREST PAYMENT DATES........... MARCH 15 AND SEPTEMBER 15 OF EACH YEAR,
COMMENCING SEPTEMBER 15, 1998.
SUBORDINATION; SUBSIDIARY
GUARANTEES..................... THE OLD NOTES ARE, AND THE NEW NOTES WILL BE,
GENERAL UNSECURED OBLIGATIONS OF THE COMPANY,
SUBORDINATED IN RIGHT OF PAYMENT TO THE PRIOR
PAYMENT IN FULL OF ALL EXISTING AND FUTURE
SENIOR DEBT OF THE COMPANY, INCLUDING THE
SECURED OBLIGATIONS OF THE COMPANY AND ITS
SUBSIDIARIES UNDER THE CREDIT FACILITY. THE
OLD NOTES ARE, AND THE NEW NOTES WILL BE,
GUARANTEED, JOINTLY AND SEVERALLY, ON AN
UNSECURED SENIOR SUBORDINATED BASIS BY THE
GUARANTORS. THE GUARANTEES ARE SUBORDINATED
IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL EXISTING AND FUTURE SENIOR DEBT
OF THE GUARANTORS INCLUDING THE SECURED
OBLIGATIONS OF THE GUARANTORS UNDER THE
CREDIT FACILITY. AS OF DECEMBER 31, 1997, ON
A PRO FORMA BASIS AFTER GIVING EFFECT TO THE
ISSUANCE OF THE OLD NOTES IN THE OFFERING AND
THE APPLICATION OF THE ESTIMATED NET PROCEEDS
THEREFROM, THE COMPANY WOULD HAVE HAD $239.5
MILLION OF SENIOR DEBT OUTSTANDING AND THE
GUARANTORS WOULD HAVE HAD NO SENIOR DEBT
OUTSTANDING OTHER THAN GUARANTEES BY THE
GUARANTORS OF THE COMPANY'S OBLIGATIONS UNDER
THE CREDIT FACILITY. SEE "DESCRIPTION OF THE
CREDIT FACILITY."
OPTIONAL REDEMPTION.............. EXCEPT AS PROVIDED BELOW, THE OLD NOTES ARE
NOT, AND THE NEW NOTES WILL NOT BE,
REDEEMABLE AT THE COMPANY'S OPTION PRIOR TO
MARCH 15, 2003. THEREAFTER, THE OLD NOTES
ARE, AND THE NEW NOTES WILL BE, REDEEMABLE,
IN WHOLE OR IN PART, AT THE OPTION OF THE
COMPANY, AT THE REDEMPTION PRICES SET FORTH
HEREIN, PLUS ACCRUED AND UNPAID INTEREST TO
THE DATE OF REDEMPTION. IN ADDITION, ON OR
BEFORE MARCH 15, 2001, THE COMPANY MAY, AT
ITS OPTION, REDEEM UP TO 35% OF THE AGGREGATE
PRINCIPAL AMOUNT OF THE NOTES ORIGINALLY
ISSUED WITH THE NET PROCEEDS OF ONE OR MORE
OFFERINGS OF COMMON STOCK OF THE COMPANY FOR
CASH AT A REDEMPTION PRICE OF 109% OF THE
PRINCIPAL AMOUNT THEREOF PLUS ACCRUED AND
UNPAID INTEREST TO THE DATE OF REDEMPTION;
PROVIDED THAT AT LEAST 65% OF THE AGGREGATE
PRINCIPAL AMOUNT OF THE NOTES REMAIN
OUTSTANDING AFTER GIVING EFFECT TO ANY SUCH
REDEMPTION. SEE "DESCRIPTION OF NEW
NOTES--OPTIONAL REDEMPTION."
CHANGE OF CONTROL................ UPON A CHANGE OF CONTROL (AS DEFINED), THE
HOLDERS OF THE NOTES HAVE THE RIGHT TO
REQUIRE THE COMPANY TO REPURCHASE THEIR
NOTES, IN WHOLE OR IN PART, AT A PURCHASE
PRICE OF 101% OF THE PRINCIPAL AMOUNT
THEREOF, PLUS ACCRUED AND UNPAID INTEREST TO
THE REPURCHASE DATE. IN THE EVENT A CHANGE OF
CONTROL WERE TO OCCUR, THERE CAN BE NO
ASSURANCE THAT THE COMPANY WILL HAVE
AVAILABLE FUNDS SUFFICIENT TO REPURCHASE ALL
OF THE NOTES THAT HOLDERS ELECT TO TENDER.
-11-
<PAGE>
IN ADDITION, THE CREDIT FACILITY PROHIBITS
THE COMPANY FROM REPURCHASING THE NOTES
WITHOUT THE CONSENT OF THE LENDERS, AND A
CHANGE OF CONTROL AS DEFINED IN THE CREDIT
FACILITY (WHICH DEFINITION INCLUDES A CHANGE
OF CONTROL UNDER THE INDENTURE) CONSTITUTES
AN EVENT OF DEFAULT UNDER THE CREDIT
FACILITY. SEE "DESCRIPTION OF NOTES--
REPURCHASE AT THE OPTION OF HOLDERS--CHANGE
OF CONTROL."
OFFER TO PURCHASE................ THE COMPANY IS REQUIRED IN CERTAIN
CIRCUMSTANCES TO MAKE AN OFFER TO PURCHASE
NOTES AND CERTAIN OTHER INDEBTEDNESS, AT A
PURCHASE PRICE EQUAL TO 100% OF THE PRINCIPAL
AMOUNT THEREOF, PLUS ACCRUED AND UNPAID
INTEREST TO THE DATE OF PURCHASE, WITH THE
NET CASH PROCEEDS OF CERTAIN ASSET SALES. THE
CREDIT FACILITY, HOWEVER, PROHIBITS THE
COMPANY FROM REPURCHASING THE NOTES UNDER
SUCH CIRCUMSTANCES WITHOUT THE CONSENT OF THE
LENDERS. SEE "DESCRIPTION OF NEW NOTES--
REPURCHASE AT THE OPTION OF HOLDERS--ASSET
SALES."
RESTRICTIVE COVENANTS............ THE INDENTURE GOVERNING THE OLD NOTES AND THE
NEW NOTES (THE "INDENTURE") CONTAINS
COVENANTS INCLUDING, BUT NOT LIMITED TO,
COVENANTS WITH RESPECT TO LIMITATIONS ON THE
FOLLOWING MATTERS: (I) THE INCURRENCE OF
ADDITIONAL INDEBTEDNESS, (II) RESTRICTED
PAYMENTS, (III) SALES OF ASSETS, (IV) MERGERS
AND CONSOLIDATIONS, (V) PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES, (VI) THE CREATION OF
LIENS AND (VII) TRANSACTIONS WITH AFFILIATES.
HOWEVER, THESE COVENANTS ARE SUBJECT TO
CERTAIN IMPORTANT QUALIFICATIONS AND
EXCEPTIONS. SEE "DESCRIPTION OF NEW NOTES--
CERTAIN COVENANTS."
EXCHANGE OFFER;
REGISTRATION RIGHTS............ UNDER THE REGISTRATION RIGHTS AGREEMENT (THE
"REGISTRATION RIGHTS AGREEMENT"), WITH THE
INITIAL PURCHASERS OF THE OLD NOTES, THE
COMPANY IS OBLIGATED TO FILE WITH THE
COMMISSION THIS REGISTRATION STATEMENT (THE
"EXCHANGE OFFER REGISTRATION STATEMENT") AND
TO OFFER TO THE HOLDERS OF THE OLD NOTES THE
OPPORTUNITY TO EXCHANGE THEIR OLD NOTES FOR
NEW NOTES (THE "EXCHANGE OFFER"). IF CERTAIN
HOLDERS OF THE OLD NOTES ARE NOT PERMITTED TO
PARTICIPATE IN, OR WOULD NOT RECEIVE FREELY
TRADEABLE NEW NOTES PURSUANT TO, THE EXCHANGE
OFFER, THE COMPANY HAS AGREED TO FILE A SHELF
REGISTRATION STATEMENT (THE "SHELF
REGISTRATION STATEMENT") WITH RESPECT TO
RESALES OF THE OLD NOTES. THE NEW NOTES
REGISTERED PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT GENERALLY WILL BE
FREELY TRADEABLE (OTHER THAN BY ANY HOLDER
WHO IS AN "AFFILIATE" OF THE COMPANY WITHIN
THE MEANING OF SECTION 405 UNDER THE
SECURITIES ACT), PROVIDED THAT ANY SUCH NEW
NOTES ACQUIRED BY A BROKER-DEALER FOR ITS OWN
ACCOUNT CANNOT BE SOLD OR TRANSFERRED WITHOUT
THE DELIVERY OF A PROSPECTUS. SEE "THE
EXCHANGE OFFER--GENERAL." HOLDERS WHO DO NOT
PARTICIPATE IN THE EXCHANGE OFFER MAY
THEREAFTER HOLD A LESS LIQUID SECURITY. THE
OLD NOTES ARE SUBJECT TO THE PAYMENT OF
LIQUIDATED DAMAGES (AS DEFINED HEREIN) UNDER
CERTAIN CIRCUMSTANCES IF THE COMPANY IS NOT
IN COMPLIANCE WITH ITS OBLIGATIONS UNDER THE
REGISTRATION RIGHTS AGREEMENT. SEE
"DESCRIPTION OF NEW NOTES--REGISTRATION
RIGHTS; LIQUIDATED DAMAGES."
RISK FACTORS
INVESTORS SHOULD CONSIDER CAREFULLY CERTAIN MATTERS RELATING TO AN
INVESTMENT IN THE NOTES. SEE "RISK FACTORS."
-12-
<PAGE>
SELECTED FINANCIAL DATA
The information below sets forth selected historical financial
information for the Company for each of the five years in the period ended
December 31, 1997. Such information for the years ended December 29, 1995,
December 31, 1996 and December 31, 1997 and as of December 31, 1996 and December
31, 1997 have been derived from and should be read in conjunction with the
consolidated financial statements of the Company, including the notes thereto,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," incorporated by reference in this Prospectus from the Company's
Form 10-K. Such information for the years ended December 31, 1993 and December
30, 1994 and as of December 31, 1993, December 30, 1994 and December 29, 1995
have been derived from the audited financial statements not incorporated by
reference or included herein. The Balance Sheet Data for 1997 set forth below
includes the effects of the Linvatec Acquisition. The Company has not declared
any cash dividends in the past five years. The unaudited pro forma adjusted
consolidated financial information for the year ended December 31, 1997 has been
prepared to reflect adjustments to the Company's historical results of
operations to give pro forma effect to (i) the Linvatec Acquisition and (ii) the
Offering and the application of the net proceeds therefrom, as if each had
occurred as of January 1, 1997. See "Unaudited Pro Forma Consolidated Financial
Information" in the Company's Form 8-K filed on February 17, 1998.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
-----------------------------------------------------------------------
1997
-------------------------
PRO FORMA AS
1993 1994 1995 1996 ACTUAL ADJUSTED (2)
---- ---- ---- ---- ------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA(1):
Net sales............................... $53,641 $71,064 $99,558 $125,630 $138,270 $ 327,434
Cost of sales........................... 30,218 38,799 52,402 63,393 74,220 164,272
Selling and administrative expenses..... 17,402 20,797 25,570 31,620 35,299 100,781
Research and development expense........ 2,222 2,352 2,832 2,953 2,037 11,298
Unusual items(3)........................ 5,700 -- -- -- 37,242 37,242
------- ------- ------- -------- -------- --------
Income (loss) from operations........... (1,901) 8,934 18,754 25,664 (11,528) 13,841
Interest income (expense), net.......... (214) (628) (1,991) (217) 823 30,266
------- ------- ------- -------- -------- --------
Income (loss) before income taxes....... (2,115) 8,306 16,763 25,447 (10,705) (16,425)
Provision (benefit) for income taxes.... (719) 2,890 5,900 9,161 (3,640) (5,699)
------- ------- ------- -------- -------- --------
Net income (loss)....................... $(1,396) $ 5,416 $10,863 $ 16,286 $(7,065) $(10,726)
======= ======= ======= ======== ======== ========
EARNINGS (LOSS) PER SHARE (4):
Basic................................... $ (0.16) $ 0.60 $1.03 $ 1.16 $(0.47) $(0.73)
======= ======= ======= ======== ======== ========
Diluted................................. $ (0.16) $ 0.56 $0.94 $ 1.12 $(0.47) $(0.73)
======= ======= ======= ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED
IN CALCULATING(4):
Basic earnings (loss) per share......... 8,987 9,032 10,517 14,045 14,997 14,997
Diluted earnings (loss) per share....... 8,987 9,624 11,613 14,496 14,997 14,997
OTHER FINANCIAL DATA:
Depreciation and amortization........... $3,262 $3,878 $5,015 $6,410 $6,954 $21,285
EBITDA(5)............................... 7,061 12,812 23,769 32,074 32,668 75,768
Capital expenditures.................... 1,506 2,190 5,195 4,946 8,178 10,510
Ratio of earnings to fixed charges(6)... --(6) 11.73x 8.84x 79.41x --(6) --(6)
DECEMBER
-----------------------------------------------------------------------
1997
---------------------------
PRO FORMA AS
1993 1994 1995 1996 ACTUAL ADJUSTED (2)
---- ---- ---- ---- ------ ------------
(IN THOUSANDS)
BALANCE SHEET DATA(7):
Cash and cash equivalents............... $ 1,978 $ 3,615 $ 1,539 $ 20,173 $ 13,452 $13,452
Total assets............................ 57,338 62,104 119,403 170,083 561,637 566,137
Long-term debt (including
current portion)...................... 11,905 9,375 32,340 -- 365,000 369,500
Total shareholders' equity.............. 37,490 43,061 75,002 158,635 162,736 162,736
(footnotes on following page)
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<PAGE>
<FN>
(1) Includes, based on the purchase method of accounting, the results of (i)
CONMED Andover Medical, Inc. ("CONMED Andover Medical"), the subsidiary
formed as a result of the acquisition of the business and certain assets of
Medtronic Andover Medical, Inc., from July 1993; (ii) an ECG product line
from Becton Dickinson Vascular Access, Inc. from November 1994; (iii)
Birtcher Medical Systems, Inc. ("Birtcher") from March 1995; (iv) the IV
controller product line acquired from The Master Medical Corporation
("Master Medical") from May 1995; (v) NDM, Inc. ("NDM"), the subsidiary
formed as a result of the product lines acquired from New Dimensions in
Medicine, Inc., from February 1996; and (vi) the surgical suction product
line acquired from the Davol subsidiary ("Davol") of C.R. Bard, Inc. from
July 1997, in each such case from the date of acquisition.
(2) Pro Forma, As Adjusted reflects the adjustments to the Company's historical
results of operations to give effect to (i) the Linvatec Acquisition and
(ii) the Offering and the application of the net proceeds therefrom, as if
each had occurred as of January 1, 1997, as described in the Notes to the
Company's Unaudited Pro Forma Consolidated Statement of Income in the
Company's Form 8-K filed on February 17, 1998.
(3) Includes for 1993 a litigation charge of $5.0 million relating to a patent
infringement case involving the Company's line of coated electrosurgical
accessory blades and a product restructure charge of $0.7 million for the
write-off of obsolete inventory. Includes for 1997 a $34.0 million
one-time, non-cash acquisition charge for the writedown of all of the
in-process research and development products (comprised of products in the
development stage) acquired in the Linvatec Acquisition, $0.9 million of
deferred financing fees resulting from refinancing the Company's loan
agreements in connection with the Linvatec Acquisition, and $2.3 million
for the closing of the Company's Dayton, Ohio manufacturing facility.
(4) All share and per share amounts have been adjusted to give effect to the
Company's three-for-two stock splits in the form of stock dividends paid on
December 27, 1994 and November 30, 1995.
(5) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization, unusual items and inventory adjustments
pursuant to purchase accounting, as provided in the Indenture. EBITDA is
included herein because certain investors consider it to be a useful
measure of a company's ability to service its debt; however, EBITDA does
not represent cash flow from operations, as defined in generally accepted
accounting principles, and should not be considered in isolation or as a
substitute for net income or cash flow from operations or as a measure of
profitability or liquidity.
(6) The ratio of earnings to fixed charges is calculated by dividing fixed
charges into income from operations before income taxes and extraordinary
items plus fixed charges. Fixed charges include interest expense,
amortization of debt issuance cost and the estimated interest component of
rent expense. In 1993 and 1997, the Company had a deficiency of earnings to
cover fixed charges of $1,755,000 and $11,381,000, respectively. For 1997,
on a pro forma, as adjusted basis, the Company had a deficiency of earnings
to cover fixed charges of $17,248,000.
(7) Linvatec is included in the Historical Balance Sheet Data as of December
31, 1997, its date of acquisition, after a one-time, non-cash acquisition
charge for the write-off of in-process research and development costs of
$34.0 million. As required by purchase accounting in connection with the
Linvatec Acquisition, the Company increased inventory by approximately $3
million over the cost to produce to value such inventory at its fair value
at the acquisition date. As a result, subsequent to the Linvatec
Acquisition and as such inventory is sold, cost of sales will be increased
by an aggregate of approximately $3 million. As Adjusted reflects the
adjustments to the Balance Sheet Data to give effect to the Offering and
the application of the net proceeds therefrom. As Adjusted does not give
effect to an extraordinary charge of $1.6 million for the write-off of
certain debt financing costs, which the Company incurred in the first
quarter of 1998 in connection with the prepayment of certain debt under the
Credit Facility with the net proceeds of the Offering.
</FN>
</TABLE>
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<PAGE>
RISK FACTORS
Investment in the Notes involves various risks, including the following
principal factors, which, together with the other matters set forth herein or
incorporated by reference herein, should be carefully considered by prospective
investors. See "Private Securities Litigation Reform Act Safe Harbor Statement"
relating to certain forward-looking statements in this Prospectus.
SIGNIFICANT LEVERAGE AND DEBT SERVICE
After consummation of this Exchange Offer, the Company will continue to
have indebtedness which is substantial in relation to its shareholders' equity,
as well as interest and debt service requirements that are significant compared
to its cash flow from operations. As of December 31, 1997, on a pro forma basis
after giving effect to the Offering and the application of the net proceeds
therefrom, the Company would have had approximately $369.5 million of debt
outstanding, which represented 69.4% of total pro forma capitalization. In
addition, on December 31, 1997, on a pro forma basis after giving effect to the
Offering and the application of the net proceeds therefrom, the Company would
have had approximately $85.0 million available for borrowing under the revolving
portion of the Credit Facility. See "Capitalization."
The degree to which the Company is leveraged could have important
consequences to holders of the Notes, including but not limited to the
following: (i) a substantial portion of the Company's cash flow from operations
must be dedicated to debt service and will not be available for operations,
capital expenditures, acquisitions and other purposes; (ii) the Company's
ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or general corporate purposes may be
impaired; and (iii) certain of the Company's borrowings, including its
borrowings under the Credit Facility, are and will continue to be at variable
rates of interest, which exposes the Company to the risk of increased interest
rates.
The Company's ability to pay principal and interest on the Notes and to
satisfy its other obligations will depend upon the Company's future operating
performance, which will be affected by the Company's ability to effectively
integrate acquired businesses, including Linvatec, with the Company's operations
and by prevailing economic conditions and financial, business and other factors,
many of which are beyond the Company's control. See "-- Ability to Integrate
Linvatec" below. There can be no assurance that the Company's operating results
will be sufficient for the Company to meet its obligations. If the Company is
unable to service its indebtedness, it will be forced to adopt an alternative
strategy that may include actions such as forgoing acquisitions, reducing or
delaying capital expenditures, selling assets, restructuring or refinancing its
indebtedness or seeking additional equity capital. There can be no assurance
that any of these strategies could be implemented on terms acceptable to the
Company, if at all. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" in the
Company's Form 10-K.
ABILITY TO INTEGRATE LINVATEC
The Company's success is dependent in part upon its ability to
effectively integrate Linvatec with the Company's operations. In the Linvatec
Acquisition, which represents the Company's largest acquisition to date, the
Company acquired products not previously manufactured or sold by the Company and
substantially increased its international presence. The Company has entered into
arrangements with Zimmer, Inc. ("Zimmer"), a subsidiary of BMS, for distribution
of the Company's small bone, large bone and specialty powered instruments in the
United States. The integration and consolidation of the Linvatec Acquisition
will require substantial management time and other resources and may pose risks
with respect to production, sales, customer service and market share. While the
Company believes that it has sufficient management and other resources to
accomplish the integration of the Linvatec Acquisition, there can be no
assurance in this regard or that the Company will not experience difficulties
with customers, suppliers, personnel or others. In addition, there can be no
assurance that the Company will be able to achieve any cost savings from the
Linvatec Acquisition. Although the Company believes that the Linvatec
Acquisition will enhance the competitive position and business prospects of the
Company, there can be no assurance that such benefits will be
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realized, that the distribution arrangements with Zimmer will be sufficient and
not be terminated or that the combination of CONMED and Linvatec will be more
successful than both such companies would have been if they had remained
independent. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--General" and "Business--Strategy" in the Company's
Form 10-K.
As a result of the Linvatec Acquisition, the Company's international
sales increased from 14% of total 1997 sales to 22% of total 1997 sales on a pro
forma basis. The Company has entered into distribution and transitional
agreements with respect to Linvatec's international business with affiliates of
BMS, the former parent of Linvatec. See "Business--Marketing" in the Company's
Form 10-K. The Company intends to replace such transitional services with its
own operations and other distribution arrangements and in some cases has already
begun to do so. There can be no assurance that the transitional services will be
sufficient to maintain the Company's international business acquired in the
Linvatec Acquisition, that the Company will be able to successfully replace the
transitional services and distribution arrangements provided by BMS affiliates
with its own services and arrangements or that the Company will be able to
expand its international business during or following the transition.
EFFECTS OF ACQUISITIONS GENERALLY
An important element of the Company's business strategy has been to
expand through acquisitions and the Company may seek to pursue acquisitions in
the future. Most recently, in July 1997, the Company acquired a surgical suction
instrument and tubing product line from Davol (the "Davol Acquisition") and, in
December 1997, acquired Linvatec. The success of the Company is dependent in
part upon its ability to effectively integrate acquired operations with the
Company's operations. While the Company believes that it has sufficient
management and other resources to accomplish the integration of its past and
future acquisitions, there can be no assurance in this regard or that the
Company will not experience difficulties with customers, suppliers, personnel or
others. In addition, there can be no assurance that the Company will be able to
identify and make acquisitions on acceptable terms or that the Company will be
able to obtain financing for such acquisitions on acceptable terms. In addition,
the financial performance of the Company is now and will continue to be subject
to various risks associated with the acquisition of businesses, including the
financial effects associated with the integration of such businesses.
The Indenture and the Credit Facility contain certain restrictive
covenants which will affect, and in many respects significantly limit or
prohibit, among other things, the ability of the Company to engage in mergers
and acquisitions. These covenants may prevent the Company from pursuing
acquisitions, which would result in lower levels of growth for the Company in
the future. See "Description of the Credit Facility" and "Description of New
Notes."
LIMITATIONS IMPOSED BY CERTAIN INDEBTEDNESS
The Indenture contains certain restrictive covenants which will affect,
and in many respects significantly limit or prohibit, among other things, the
ability of CONMED and its Restricted Subsidiaries (as defined) to incur
indebtedness, make prepayments of certain indebtedness, make investments, engage
in transactions with affiliates, sell assets, engage in mergers and acquisitions
and realize important elements of its business strategy. The Credit Facility
contains similar and more restrictive covenants, including a restriction on the
repayment and prepayment of principal on the Notes, and, like the Indenture,
requires the Company to meet certain financial ratios and tests. These covenants
may prevent the Company from integrating its acquired businesses, pursuing
acquisitions, significantly limit the operating and financial flexibility of the
Company and limit its ability to respond to changes in its business or
competitive activities. The ability of the Company to comply with such
provisions may be affected by events beyond its control. In the event of any
default under the Credit Facility or the Indenture, the Credit Facility lenders
could elect to declare all amounts borrowed under the Credit Facility, together
with accrued interest, to be due and payable. If the Company were unable to
repay such borrowings, the lenders thereunder could proceed against the
collateral securing the Credit Facility, which consists of substantially all of
the property and assets of CONMED and its subsidiaries. If the indebtedness
under the Credit Facility were to be accelerated, there can be no assurance that
the assets of CONMED and its subsidiaries would be sufficient to repay such
indebtedness and the Notes (which are subordinated in right of payment to such
indebtedness) in full. See "Description of the Credit Facility" and "Description
of New Notes."
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SIGNIFICANT COMPETITION AND OTHER MARKET CONSIDERATIONS
The market for the Company's products is highly competitive. Many of
these competitors offer a range of products in areas other than those in which
the Company competes, which may make such competitors more attractive to GPOs,
hospitals and others. In addition, many of the Company's competitors are larger
and have greater financial resources than the Company and offer a range of
products broader than the Company's. Competitive pricing pressures or the
introduction of new products by the Company's competitors could have an adverse
effect on the Company's revenues and profitability. Some of the companies with
which the Company now competes or may compete in the future have or may have
more extensive research, marketing and manufacturing capabilities and
significantly greater technical and personnel resources than the Company, and
may be better positioned to continue to improve their technology in order to
compete in an evolving industry. See "Business--Competition" in the Company's
Form 10-K.
Demand for and use of the Company's products may fluctuate as a result
of changes in surgeon preferences, the introduction of new products or new
features to existing products, the introduction of alternative surgical
technology and advances in surgical procedures and discoveries or developments
in the health care industry. In recent years, the health care industry has
undergone significant change driven by various efforts to reduce costs,
including efforts at national health care reform, trends toward managed care,
cuts in Medicare, consolidation of health care distribution companies and
collective purchasing arrangements by office-based health care practitioners.
There can be no assurance that demand for the Company's products will not be
adversely affected by such fluctuations and trends.
PATENTS AND PROPRIETARY TECHNOLOGY
Much of the technology used in the markets in which the Company
competes is covered by patents. The Company has numerous U.S. patents and
corresponding foreign patents on products expiring at various dates from 1998
through 2015 and has additional patent applications pending. See
"Business--Research and Development Activities" in the Company's Form 10-K.
Although the Company does not rely solely on its patents to maintain its
competitive position, the loss of the Company's patents could reduce the value
of the related products and any related competitive advantage. Competitors may
also be able to design around the Company's patents and effectively compete with
the Company's products. In addition, the cost to prosecute infringements of the
Company's patents or the cost to defend the Company against patent infringement
actions by others could be substantial. There can be no assurance that pending
patent applications will result in issued patents, that patents issued to or
licensed by the Company will not be challenged by competitors or that such
patents will be found to be valid or sufficiently broad to protect the Company's
technology or provide the Company with a competitive advantage.
GOVERNMENT REGULATION OF PRODUCTS
All of the Company's products are classified as medical devices subject
to regulation by the Food and Drug Administration (the "FDA"). As a manufacturer
of medical devices, the Company's manufacturing processes and facilities are
subject to on-site inspection and continuing review by the FDA to insure
compliance with "Good Manufacturing Practices," as defined by the FDA. Failure
to comply with applicable requirements can result in fines, recall or seizure of
products, total or partial suspension of production, withdrawal of existing
product approvals or clearances, refusal to approve or clear new applications or
notices and criminal prosecution. Many of the Company's products are also
subject to industry-set standards.
Foreign sales are also subject to substantial government regulation.
For example, the Company's European Community sales are subject to government
regulations known as the "CE" mark certification. Although a majority of the
Company's products have received "CE" mark certification and the Company
believes its products meet all applicable requirements for "CE" mark
certification, there can be no assurance that all of the Company's products will
receive a "CE" mark certification prior to the date that such certification is
required to continue to market such products.
The Company is subject to product recall. The Company's product lines
have experienced a number of product recalls. The Company has completed actions
to close all these recalls except one which the Company is currently
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addressing. See "Business--Government Regulation" in the Company's Form 10-K.
Although no recall or production matter has had a material adverse effect on the
Company's financial condition, there can be no assurance to this effect in the
future.
RISKS RELATING TO INTERNATIONAL OPERATIONS
A portion of the Company's operations are conducted outside the United
States, with 22% of the Company's pro forma 1997 net sales constituting foreign
sales. As a result of its international operations, the Company is subject to
risks associated with operating in foreign countries, including devaluations and
fluctuations in currency exchange rates, imposition of limitations on
conversions of foreign currencies into dollars or remittance of dividends and
other payments by foreign subsidiaries, imposition or increase of withholding
and other taxes on remittances and other payments by foreign subsidiaries, trade
barriers, political risks, including political instability, hyperinflation in
certain foreign countries and imposition or increase of investment and other
restrictions by foreign governments. There can be no assurance that such risks
will not have a material adverse effect on the Company's business and results of
operations.
RISK OF PRODUCT LIABILITY ACTIONS
The nature of the Company's products as medical devices and today's
litigious environment in the United States should be regarded as potential risks
that could significantly and adversely affect the Company's financial condition
and results of operations. The Company maintains insurance to protect against
claims associated with the use of its products, but there can be no assurance
that its insurance coverage would adequately cover the amount or nature of any
claim asserted against the Company. See "Business--Legal Proceedings" in the
Company's Form 10-K.
ENVIRONMENTAL MATTERS
The Company's operations are subject to a number of environmental laws
and regulations governing, among other things, air emissions, wastewater
discharges, hazardous substances and waste disposal. Certain environmental laws
can impose liability for the entire cost of environmental remediation upon
current or former property owners and operators without regard to fault. While
the Company does not believe that the present costs of environmental compliance
and remediation are material, there can be no assurance that future compliance
or remedial obligations could not have a material adverse effect on the
Company's financial condition or results of operations. See
"Business--Environmental Matters" in the Company's Form 10-K.
SUBORDINATION
The payment of principal, premium, if any, and interest and Liquidated
Damages, if any, on the Notes will be subordinated to the prior payment in full
of all existing and future Senior Debt of the Company, including secured
indebtedness under the Credit Facility, and, therefore, in the event of the
bankruptcy, liquidation or reorganization of the Company, the assets of the
Company will not be available to pay obligations under the Notes until all such
Senior Debt has been paid in full. Furthermore, any payment with respect to a
Guarantee also is subordinated to the payment of Senior Debt of that Guarantor,
including the Guarantor's guarantee of the Company's obligations under the
Credit Facility. As a result, there may not be sufficient assets remaining after
such bankruptcy, liquidation or reorganization to pay amounts due on the Notes.
As of December 31, 1997, on a pro forma basis after giving effect to the
Offering and the application of the estimated net proceeds therefrom, the
Company would have had $239.5 million of Senior Debt outstanding and the
Guarantors would have had no Senior Debt outstanding other than guarantees by
the Guarantors of the Company's obligations under the Credit Facility. In
addition, as of December 31, 1997, on a pro forma basis after giving effect to
the Offering and the application of the estimated net proceeds therefrom, the
Company would have had approximately $85.0 million available for borrowings
under the Credit Facility. The Indenture permits the Company to incur additional
Indebtedness, including Senior Debt, from time to time, subject to certain
limitations.
The subordination provisions of the Indenture provide that no payment
may be made by the Company with respect to the Notes or by any Guarantor with
respect to its Guarantee upon the occurrence of a default in the payment
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of principal, premium, if any, or interest on certain Designated Senior Debt (as
defined herein) or a default of any other type if as a result thereof such
Designated Senior Debt is accelerated in accordance with its terms. In addition,
upon the occurrence of any other event entitling the holders of such Designated
Senior Debt to accelerate the maturity thereof and receipt by the Trustee (as
defined herein) of written notice of such occurrence, the holders of such
Designated Senior Debt will be able to block payment on the Notes for specified
periods of time. All indebtedness outstanding under the Credit Facility
constitutes Designated Senior Debt. If the Company fails to make any payment on
the Notes when due or within any applicable grace period, whether or not on
account of the payment blockage provisions referred to above, such failure would
nonetheless constitute an event of default under the Indenture and would entitle
the holders of the Notes to accelerate the maturity thereof. See "Description of
New Notes--Subordination."
POTENTIAL INABILITY TO EFFECT A CHANGE OF CONTROL OFFER OR AN ASSET SALE OFFER
Upon a Change of Control (as defined), the holders of the Notes will be
entitled to require the Company to repurchase their Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, to the repurchase date. In addition, certain
asset sales by the Company may require the Company to make an offer to
repurchase Notes with the proceeds of such asset sales at a purchase price equal
to 100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, to the repurchase date. However, the Credit Facility
prohibits the purchase of the Notes by the Company unless and until the
indebtedness under the Credit Facility is repaid in full and the Credit Facility
has been terminated. Furthermore, a Change of Control would also constitute a
change of control as defined in the Credit Facility and would constitute an
event of default under the Credit Facility. The Company's failure to purchase
the Notes would result in a default under the Indenture. The inability to repay
the indebtedness under the Credit Facility, if accelerated, would also
constitute an event of default under the Indenture, which could have adverse
consequences to the Company and the holders of the Notes. In such event, there
can be no assurance that the Company would have sufficient assets to satisfy all
of its obligations under the Credit Facility and the Notes. See "Description of
New Notes--Repurchase at the Option of Holders."
FRAUDULENT CONVEYANCE; PREFERENTIAL TRANSFER
Various fraudulent conveyance laws have been enacted for the protection
of creditors and may be utilized by a court to subordinate or avoid the Notes or
any Guarantee in favor of other existing or future creditors of the Company or
of a Guarantor.
If the court in a lawsuit brought by an unpaid creditor or
representative of creditors, such as a trustee in bankruptcy of the Company or
of a Guarantor, as the case may be, as a debtor-in-possession, were to find
under relevant federal or state fraudulent conveyance statutes that the Company
or such Guarantor, as the case may be, (x) intended to hinder, delay or defraud
any existing or future creditor or contemplated insolvency with a design to
prefer one or more creditors to the exclusion in whole or in part of others or
(y) did not receive fair consideration or reasonably equivalent value for
incurring the indebtedness represented by the Old Notes or the Guarantees and
that, at the time of such incurrence, the Company or such Guarantor (i) was
insolvent, (ii) was rendered insolvent by reason of such incurrence, (iii) was
engaged or was about to engage in a business or transaction for which the assets
remaining with the Company or such Guarantor constituted unreasonably small
capital to carry on its business or (iv) intended to incur, or believed that it
would incur, debts beyond its ability to pay such debts as they matured, such
court, subject to applicable statutes of limitation, could avoid the Company's
obligations under the Notes or such Guarantor's obligations under its Guarantee,
subordinate the Notes or such Guarantee to other indebtedness of the Company or
such Guarantor or take other action detrimental to the holders of the Notes.
The majority of the Company's operations are conducted through
subsidiaries, and the Company therefore relies on distributions from its
subsidiaries for the funds to service its indebtedness, including payment of
principal of and interest on the Notes. To the extent that any Guarantees were
voided as a fraudulent conveyance or held unenforceable for any other reason,
Holders of the Notes would cease to have any claim in respect of such Guarantor
and would be creditors solely of the Company and any Guarantor whose Guarantee
was not voided or held
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unenforceable. In such event, the claims of the Holders of the Notes against the
issuer of an invalid Guarantee would be subject to the prior payment of all
liabilities and preferred equity interests, if any, of such Guarantor. There can
be no assurance that, after providing for all prior claims and preferred equity
interests, if any, there would be sufficient assets to satisfy the claims of the
Holders of the Notes relating to any voided portions of any of the Guarantees.
The measure of insolvency for these purposes will vary depending upon
the law of the jurisdiction being applied. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than all that company's property at a fair valuation, or if the present
fair salable value of that company's assets is less than the amount that would
be required to pay its probable liability on its existing debts as they become
absolute and matured. Moreover, regardless of solvency, a court could avoid an
incurrence of indebtedness, including the Notes or a Guarantee, if it determined
that such transaction was made with intent to hinder, delay or defraud
creditors, or a court could subordinate the indebtedness, including the Notes or
a Guarantee, to the claims of all existing and future creditors on similar
grounds. Based upon financial and other information currently available to it,
management of the Company believes the Company and each Guarantor is solvent.
However, there can be no assurance as to what standard a court would apply in
order to determine whether the Company or a Guarantor was "insolvent" upon
consummation of the sale of the Old Notes and the granting of the Guarantees.
Additionally, under federal bankruptcy or applicable state insolvency
law, if certain bankruptcy or insolvency proceedings were initiated by or
against the Company or a Guarantor within 90 days after any payment by the
Company with respect to the Notes or any payment by a Guarantor with respect to
its Guarantee or if the Company or a Guarantor anticipated becoming insolvent at
the time of such payment, all or a portion of such payment could be avoided as a
preferential transfer and the recipient of such payment could be required to
return such payment.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The New Notes are new securities for which there is currently no
market. Although the Initial Purchasers have informed the Company that they
currently intend to make a market in the New Notes and the Old Notes, they are
not obligated to do so and any such market making may be discontinued at any
time without notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the Notes, the ability of holders to
sell the Notes or the price at which holders would be able to sell the Notes.
Future trading prices of the Notes will depend on many factors, including, among
other things, prevailing interest rates, the Company's operating results, the
market for similar securities and, in the case of the Old Notes, the
restrictions on transfer with respect thereto. Historically, the market for
securities similar to the New Notes, including non-investment grade debt, has
been subject to disruptions that have caused substantial volatility in the
prices of such securities. There can be no assurance that any market for the New
Notes, if such market develops, will not be subject to similar disruptions. In
connection with the issuance of the Old Notes, the Company arranged for the Old
Notes to be designated for trading in the Nasdaq Stock Market's Portal
Market(sm). The Company does not intend to apply for listing of either the Old
Notes or the New Notes on any securities exchange or for quotation through the
National Association of Securities Dealers, Inc.'s Automated Quotation System.
Notwithstanding the registration of the New Notes in the Exchange
Offer, each holder that may be deemed an "affiliate" (as defined under Rule 405
under the Securities Act) of the Company will represent to the Company that such
holder understands and acknowledges that the New Notes may not be offered for
resale, resold or otherwise transferred by that holder without registration
under the Securities Act or exemption therefrom.
Each broker-dealer or other dealer that receives New Notes for its own
account in exchange for Old Notes, where such Old Notes were acquired by such
broker-dealer or other dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution."
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EXCHANGE OFFER PROCEDURES
Issuance of the New Notes in exchange for Old Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Company of such
Old Notes, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, holders of the Old Notes desiring to tender
such Old Notes in exchange for New Notes should allow sufficient time to ensure
timely delivery. The Company is under no duty to give notification of defects or
irregularities with respect to the tenders of Old Notes for exchange. Old Notes
that are not tendered or are tendered but not accepted will, following the
consummation of the Exchange Offer, continue to be subject to the existing
restrictions upon transfer thereof and, upon consummation of the Exchange Offer,
the registration rights under the Registration Rights Agreement will terminate.
In addition, any holder of Old Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the New Notes may be deemed to
have received restricted securities and, if so, will be required to comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives New
Notes for its own account in exchange for Old Notes, where such Old Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution." To the
extent that Old Notes are tendered and accepted in the Exchange Offer, the
trading market for untendered and tendered but unaccepted Old Notes could be
adversely affected. See "The Exchange Offer."
CONSEQUENCES OF THE EXCHANGE OFFER ON NON-TENDERING HOLDERS OF THE OLD NOTES
AND BROKER-DEALERS RECEIVING NEW NOTES
The Company intends for the Exchange Offer to satisfy its registration
obligations under the Registration Rights Agreement. If the Exchange Offer is
consummated, the Company does not intend to file further registration statements
for the sale or other disposition of Old Notes. Consequently, following
completion of the Exchange Offer, holders of Old Notes seeking liquidity in
their investment would have to rely on an exemption to the registration
requirements under applicable securities laws, including the Securities Act,
with respect to any sale or other disposition of the Old Notes. In addition,
broker-dealers that receive New Notes in exchange for Old Notes acquired in
market-making activities or other trading activities must deliver a prospectus
in connection with any resale of such New Notes. The Company has agreed to use
its best efforts to maintain this registration statement effective for 90 days
from the consummation of the Exchange Offer and amend or supplement this
Prospectus for such purpose. Thereafter, the Company has no obligation to
furnish broker-dealers holding New Notes with a prospectus to deliver in
connection with any such resale. See "The Exchange Offer" and "Plan of
Distribution."
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
New Notes offered hereby. In consideration for issuing the New Notes as
contemplated in this Prospectus, the Company will receive in exchange Old Notes
in like principal amount, the terms of which are the same in all material
respects as the form and terms of to the New Notes, except that the New Notes
have been registered under the Securities Act and will not contain terms
restricting the transfer thereof. The Old Notes surrendered in exchange for the
New Notes will be retired and canceled and cannot be reissued. Accordingly,
issuance of the New Notes will not result in any increase in the indebtedness of
the Company.
The net proceeds received by the Company from the offering of the Old
Notes were approximately $125.5 million. The Company used the net proceeds from
the Offering to reduce outstanding term loans under the Credit Facility. The
term loans are repayable in quarterly installments over a five- or seven-year
period commencing March 31, 1998. At December 31, 1997, the amount outstanding
under the Credit Facility was $365 million and the blended interest rate for the
Credit Facility was 8.06%. The applicable margin for all variable rate
borrowings under the Credit Facility declined by 0.25% by reason of consummation
of the Offering and the application of the net proceeds therefrom
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to repay term loans under the Credit Facility. The indebtedness repaid under the
Credit Facility was incurred in the financing of the Linvatec Acquisition.
THE EXCHANGE OFFER
GENERAL
In connection with the sale of the Old Notes, the purchasers thereof
became entitled to the benefits of certain registration rights (the
"Registration Rights"). Pursuant to the Registration Rights Agreement, the
Company agreed to use its reasonable best efforts, at its cost, to file and
cause to become effective the Exchange Offer Registration Statement with respect
to the Exchange Offer to exchange the New Notes for the Old Notes. Upon such
registration statement being declared effective, the Company has agreed to offer
the New Notes in return for surrender of the Old Notes. For each Old Note
surrendered to the Company under the Exchange Offer, the Holder will receive a
New Note of equal principal amount. The Indenture provides that the New Notes
and the Old Notes will constitute one class of securities for all purposes, will
vote and consent together on all matters as one class and will not have the
right to vote or consent as a separate class on any matter.
If (i) the Company is not permitted to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy or (ii) any Holder of Transfer Restricted Securities holding more than
$5.0 million in aggregate principal amount of Transfer Restricted Securities
notifies the Company (A) that it is prohibited by law or Commission policy from
participating in the Exchange Offer, (B) that it may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus (as amended or supplemented) contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales or (C) that it is a broker-dealer and owns Old Notes acquired directly
from the Company or an affiliate of the Company, the Company will file with the
Commission the Shelf Registration Statement to cover resales of the Old Notes by
the Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. For purposes of
the foregoing, "Transfer Restricted Securities" means each Old Note until the
earlier of (i) the date on which such Old Note has been exchanged by a person
other than a broker-dealer for a New Note in the Exchange Offer, (ii) following
the exchange by a broker-dealer in the Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Old Note has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement, (iv) the date
on which such Old Note is available for distribution to the public pursuant to
Rule 144(k) under the Securities Act (or any successor provision), or (v) the
date on which such Note is no longer outstanding.
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the New
Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be
offered for sale, resold or otherwise transferred by any Holder without
compliance with the registration and prospectus delivery provisions of the
Securities Act. Based on no-action letters issued by the staff of the Commission
to third parties, the Company believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by holders thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
requirements of the Securities Act provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders have no
arrangement with any person to participate in the distribution (within the
meaning of the Securities Act) of such New Notes. Since the Commission has not
considered the Exchange Offer in the context of a no-action letter, there can be
no assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer. Any holder of Old Notes who tenders in the
Exchange Offer for the purpose of participating in a distribution of the New
Notes will not be permitted to rely on such interpretation by the staff of the
Commission and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
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Each broker-dealer that receives New Notes for its own account in the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Notes received in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Company
has agreed that, for a period of 90 days after the Expiration Date, with certain
exceptions, it will make this Prospectus and any amendment or supplement to this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
Following the consummation of the Exchange Offer, Holders of the Old
Notes who did not tender their Old Notes will not have any further registration
rights under the Registration Rights Agreement, and such Old Notes will continue
to be subject to certain restrictions on transfer. Accordingly, the liquidity of
the market for such Old Notes could be adversely affected. See "Risk Factors --
Exchange Offer Procedures" and "-- Consequences of the Exchange Offer on
Non-Tendering Holders of the Old Notes."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will accept any and all
Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount of
New Notes in exchange for $1,000 principal amount of outstanding Old Notes
accepted in the Exchange Offer. Holders may tender some or all of their Old
Notes pursuant to the Exchange Offer. Holders of Old Notes are not required to
tender their Old Notes in the Exchange Offer. However, Old Notes may be tendered
only in integral multiples of $1,000.
The form and terms of the New Notes will be the same as the form and
terms of the Old Notes except that (i) the New Notes bear a different CUSIP
number from the Old Notes, (ii) the New Notes have been registered under the
Securities Act and therefore will not bear legends restricting the transfer
thereof and (iii) the holders of the New Notes will not be entitled to certain
rights under the Registration Rights Agreement, including the provisions
providing for Liquidated Damages in certain circumstances relating to the timing
of the Exchange Offer, all of which rights will terminate upon consummation of
the Exchange Offer. The New Notes will evidence the same debt as the Old Notes
and will be entitled to the benefits of the Indenture.
As of the date of this Prospectus, $130,000,000 aggregate principal
amount of the Old Notes was outstanding.
The Company intends to conduct the Exchange Offer in accordance with
the applicable requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, including Rule 14e-1 thereunder.
This Prospectus, together with the accompanying letter of transmittal
(the "Letter of Transmittal"), is being sent to all registered holders as of
_____ __, 1998 (the "Record Date").
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if it has given oral or written notice thereof to First Union
National Bank (the "Exchange Agent"). See "Exchange Agent." The Exchange Agent
will act as agent for the tendering holders of Old Notes for the purpose of
receiving New Notes from the Company and delivering New Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted Old Notes will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers or others soliciting
acceptances of the Exchange Offer. Holders of Old Notes who tender in
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the Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Notes pursuant to the Exchange Offer. The Company
will pay all charges and expenses, other than certain applicable taxes, in
connection with the Exchange Offer. See "Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean ________ __, 1998, unless the
Company, in its sole discretion, extends the Exchange Offer, in which case the
term "Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
record holders of Old Notes an announcement thereof, prior to 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is extending the
Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Old
Notes, to extend the Exchange Offer or to terminate the Exchange Offer and to
refuse to accept Old Notes not previously accepted, if any of the conditions set
forth herein under "Termination" shall have occurred and shall not have been
waived by the Company (if permitted to be waived by the Company), by giving oral
or written notice of such delay, extension or termination to the Exchange Agent,
and (ii) to amend the terms of the Exchange Offer in any manner deemed by it to
be advantageous to the holders of the Old Notes. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by oral or written notice thereof. If the Exchange Offer is amended in a manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment in a manner reasonably calculated to inform the
holders of the Old Notes of such amendment.
Without limiting the manner in which the Company may choose to make
public announcements of any delay in acceptance, extension, termination or
amendment of the Exchange Offer, the Company shall have no obligation to
publish, advertise, or otherwise communicate any such public announcement, other
than by making a timely release to the Dow Jones News Service.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from March 5, 1998, payable
semiannually on March 15 and September 15 of each year, commencing on September
15, 1998, at the rate of 9% per annum. Holders of Old Notes whose Old Notes are
accepted for exchange will be deemed to have waived the right to receive any
payment in respect of interest on the Old Notes accrued from March 5, 1998 until
the date of the issuance of the New Notes. Consequently, holders who exchange
their Old Notes for New Notes will receive the same interest payment on
September 15, 1998 (the first interest payment date with respect to the Old
Notes and the New Notes) that they would have received had they not accepted the
Exchange Offer.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date
the Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Notes (unless such tender is being effected pursuant to the procedure for
book-entry transfer described below) and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Any financial institution that is a participant in the Book-Entry
Transfer Facility system of the Depository Trust Company ("DTC") may make
book-entry delivery of the Old Notes by causing DTC to transfer such Old Notes
into the Exchange Agent's account in accordance with DTC's procedure for such
transfer. Although delivery of Old Notes
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may be effected through book-entry transfer into the Exchange Agent's account at
DTC, the Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth herein under "Exchange Agent" prior to 5:00 p.m., New York City time,
on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The tender by a holder of Old Notes will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its
address set forth herein. Holders may also request that their respective
brokers, dealers, commercial banks, trust companies or nominees effect such
tender for such holders.
The method of delivery of Old Notes and the Letter of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the holders. Instead of delivery by mail, it is recommended that holders use
an overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Notes should
be sent to the Company.
Only a holder of Old Notes may tender such Old Notes in the Exchange
Offer. The term "holder" with respect to the Exchange Offer means any person in
whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder, or any person whose Old Notes are held of record by DTC who desires to
deliver such Old Notes by book-entry transfer at DTC.
Any beneficial holder whose Old Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such holder's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (an "Eligible Institution") unless the Old Notes
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by appropriate bond powers which authorize such person
to tender the Old Notes on behalf of the registered holder, in either case
signed as the name of the registered holder or holders appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
By tendering in the Exchange Offer, each holder will represent to the
Company that, among other things, (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Notes, whether or not such person is a holder, (ii)
neither the holder nor any such other person has
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an arrangement or understanding with any person to participate in the
distribution of such New Notes and (iii) the holder and such other person
acknowledge that if they participate in the Exchange Offer for the purpose of
distributing the New Notes (a) they must, in the absence of an exemption
therefrom, comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale of the New Notes and cannot
rely on the no-action letters referenced above and (b) failure to comply with
such requirements in such instance could result in such holder incurring
liability under the Securities Act for which such holder is not indemnified by
the Company. Further, by tendering in the Exchange Offer, each holder that may
be deemed an "affiliate" (as defined under Rule 405 under the Securities Act) of
the Company will represent to the Company that such holder understands and
acknowledges that the New Notes may not be offered for resale, resold or
otherwise transferred by that holder without registration under the Securities
Act or exemption therefrom.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Old Notes will be determined
by the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes the Company's acceptance of which would,
in the opinion of counsel for the Company, be unlawful. The Company also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular Old Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Old Notes nor shall any
of them incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such irregularities have
been cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost by the Exchange Agent to the
tendering holder of such Old Notes unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
(a) purchase or make offers for any Old Notes that remain outstanding subsequent
to the Expiration Date, or, as set forth under "Termination," to terminate the
Exchange Offer and (b) to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers may differ from the terms of the Exchange
Offer.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, or (ii) who cannot deliver their Old Notes, the
Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date, or if such Holder cannot complete the procedure
for book-entry transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) setting forth the
name and address of the holder of the Old Notes, the certificate number or
numbers of such Old Notes and the principal amount of Old Notes tendered,
stating that the tender is being made thereby, and guaranteeing that, within
five business days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing the Old Notes
to be tendered in prior form for transfer and any other documents required by
the Letter of Transmittal, will be deposited by the Eligible Institution with
the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all tendered
Old Notes in proper form for transfer (or confirmation of a book-entry transfer
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into the Exchange Agent's account at DTC of Old Notes delivered electronically)
and all other documents required by the Letter of Transmittal are received by
the Exchange Agent within five business days after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date, unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the business day prior to the Expiration Date and prior to acceptance for
exchange thereof by the Company. Any such notice of withdrawal must (i) specify
the name of the person having deposited the Old Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes), (iii) be
signed by the Depositor in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to permit the Trustee with respect to the Old Notes to register the
transfer of such Old Notes into the name of the Depositor withdrawing the tender
and (iv) specify the name in which any such Old Notes are to be registered, if
different from that of the Depositor. All questions as to the validity, form and
eligibility (including time of receipt) of such withdrawal notices will be
determined by the Company, whose determination will be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Notes will be issued with
respect thereto unless the Old Notes so withdrawn are validly re-tendered. Any
Old Notes which have been tendered but which are not accepted for exchange will
be returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "Procedures for Tendering" at any time prior to
the Expiration Date.
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement and,
except as set forth herein, holders of Old Notes who do not tender their Old
Notes will not have any further registration rights under the Registration
Rights Agreement or otherwise. Accordingly, any holder of Old Notes that does
not exchange that holder's Old Notes for New Notes will continue to hold the
untendered Old Notes and will be entitled to all the rights and limitations
applicable thereto under the Indenture, except to the extent such rights or
limitations, by their terms, terminate or cease to have further effectiveness as
a result of the Exchange Offer.
The Old Notes that are not exchanged for New Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, without
registration under the Securities Act, such Old Notes may be resold only (i) to
the Company (upon redemption thereof or otherwise), (ii) pursuant to an
effective registration statement under the Securities Act, (iii) so long as the
Old Notes are eligible for resale pursuant to Rule 144A, to a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act in
a transaction meeting the requirements of Rule 144A, (iv) outside the United
States to a foreign person pursuant to the exemption from the registration
requirements of the Securities Act provided by Regulation S thereunder, or (v)
pursuant to another available exemption from the registration requirements of
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
Accordingly, if any Old Notes are tendered and accepted in the Exchange
Offer, the trading market for the untendered Old Notes could be adversely
affected. See "Risk Factors -- Consequences of the Exchange Offer on
Non-Tendering Holders of the Old Notes" and "-- Termination of Certain Rights."
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decision on what
action to take.
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TERMINATION
Notwithstanding any other term of the Exchange Offer, the Company will
not be required to accept for exchange, or exchange New Notes for, any Old Notes
not theretofore accepted for exchange, and may terminate or amend the Exchange
Offer as provided herein before the acceptance of such Old Notes if: (i) any
action or proceeding is instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer, which, in the
Company's judgment, might materially impair the Company's ability to proceed
with the Exchange Offer, (ii) any law, statute, rule or regulation is proposed,
adopted or enacted, or any existing law, statute rule or regulation is
interpreted by the staff of the Commission in a manner, which, in the Company's
judgment, might materially impair the Company's ability to proceed with the
Exchange Offer, (iii) the consummation of the Exchange Offer would constitute an
event of default or otherwise violate the Indenture or the Credit Agreement, or
(iv) the Company reasonably deems it advisable to terminate the Exchange Offer.
If the Company determines that it may terminate the Exchange Offer, as
set forth above, the Company may (i) refuse to accept any Old Notes and return
any Old Notes that have been tendered to the holders thereof, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the Expiration of the
Exchange Offer, subject to the rights of such holders of tendered Old Notes to
withdraw their tendered Old Notes, or (iii) waive such termination event with
respect to the Exchange Offer and accept all properly tendered Old Notes that
have not been withdrawn. If such waiver constitutes a material change in the
Exchange Offer, the Company will disclose such change by means of a supplement
to this Prospectus that will be distributed to each registered holder of Old
Notes, and the Company will extend the Exchange Offer for a period of five to
ten business days, depending upon the significance of the waiver and the manner
of disclosure to the registered holders of the Old Notes, if the Exchange Offer
would otherwise expire during such period. See "Description of New
Notes--Registration Rights; Liquidated Damages."
EXCHANGE AGENT
First Union National Bank, the Trustee under the Indenture, has been
appointed as Exchange Agent for the Exchange Offer. Questions and requests for
assistance and requests for additional copies of this Prospectus or of the
Letter of Transmittal should be directed to the Exchange Agent addressed as
follows:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard
Charlotte, NC 28288-1153
Attention: W. Jeffrey Kramer
Facsimile Transmission: (704) 247-1356
Confirm by by Telephone: (704) 590-7408
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will
be borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and employees of the Company and its affiliates in person, by telegraph
or telephone.
The Company will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. The Company, however, will
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus, Letters of Transmittal
and related documents to the beneficial owners of the Old Notes and in handling
or forwarding tenders for exchange.
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The expenses to be incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by the
Company upon the consummation of the Exchange Offer. The expenses of the
Exchange Offer and the expenses related to the issuance of the Old Notes will be
amortized by the Company over the term of the New Notes in accordance with
generally accepted accounting principles.
DESCRIPTION OF THE CREDIT FACILITY
In connection with the Linvatec Acquisition, the Company entered into a
credit agreement dated December 29, 1997 with Chase Securities Inc., as arranger
and as syndication agent, Salomon Brothers Holding Company, Inc, as
documentation agent, and The Chase Manhattan Bank, as administrative agent, for
a senior secured credit facility (the "Credit Facility") on the terms and
subject to the conditions set forth below.
The Credit Facility consists of term loans in an aggregate principal
amount of $350 million (the "Term Loans"), letters of credit in a principal
amount of $10 million (the "Letters of Credit") and a revolving credit facility
(the "Revolving Credit Loans") in a principal amount of $100 million. As of
March 31, 1998, Tranche A Term Loans in the aggregate amount of $___ million and
Tranche B Term Loans in the amount of $___ million constituted the Term Loans.
Borrowings under the Credit Facility bear interest at variable rates. Pursuant
to the guarantee and collateral agreement dated December 31, 1997 (the
"Guarantee and Collateral Agreement") made by the Company and its subsidiaries
in favor of The Chase Manhattan Bank, as administrative agent, the subsidiaries
of the Company have guaranteed the obligations of the Company under the Credit
Facility and have granted to The Chase Manhattan Bank, in its capacity as
administrative agent, a security interest in certain defined collateral owned or
thereafter acquired by the Company and its subsidiaries. The collateral consists
of substantially all of the personal property and assets of the Company and its
subsidiaries.
The Tranche A Term Loans are repayable over a five-year period in
quarterly installments. The Tranche B Term Loans are repayable over a seven-year
period in quarterly installments. The Letters of Credit expire no later than the
earlier of (i) the first anniversary of its date of issuance and (ii) the date
which is five business days prior to the scheduled revolving credit termination
date of December 30, 2002, provided that any Letter of Credit with a one-year
term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in (ii) above). The
Revolving Credit Loans are scheduled to terminate and are repayable in full on
December 30, 2002. The Company is generally required to make mandatory
prepayments from net cash proceeds from any issue of equity and asset sales and
also from any excess cash flow of the Company. The net proceeds from the sale of
the Old Notes were used to prepay Term Loans. Mandatory prepayments shall be
applied first to prepayment of the Term Loans and second to reduce permanently
the Revolving Credit Loans.
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The Credit Facility contains customary representations and warranties,
covenants and conditions to borrowing. In addition, the availability of funds
under the Credit Facility is subject to significant conditions, including,
without limitation, the accuracy of all representations and warranties contained
in the Credit Facility and the absence of any default under the Credit Facility.
The Credit Facility contains customary affirmative covenants including,
without limitation, those that require the Company to furnish certified
financial statements and other information to the administrative agent and each
lender, to satisfy its material obligations, and to give the administrative
agent and each lender notice of any default of any of the Company's obligations
or any litigation affecting the Company involving more than $1,000,000.
The Credit Facility contains customary negative covenants including,
without limitation, those that require the Company to maintain certain quarterly
financial and operating ratios and which restrict the Company and its
subsidiaries from, among other things, incurring other indebtedness, entering
into merger, consolidation or acquisition transactions, disposing of assets,
making investments, loans or advances, making certain capital expenditure
payments, creating any liens on the Company's assets, creating guarantee
obligations and material lease obligations and entering into sale and leaseback
transactions and transactions with affiliates. The Credit Facility also limits
the Company's ability to pay dividends and make distributions on its common
stock.
The Credit Facility contains customary events of defaults, including,
without limitation, the nonpayment of principal, interest, fees or other amounts
of any of the Company's obligations, any representation or warranty given by the
Company shall prove to be inaccurate, the commencement of any liquidation or
similar proceeding involving the Company, the guarantee obligations under the
Guarantee and Collateral Agreement ceasing to be in effect, the senior
subordinated notes ceasing to be validly subordinated to the obligations of the
guarantors under the Guarantee and Collateral Agreement, the occurrence of a
change of control and any default with respect to other obligations of the
Company and its subsidiaries.
DESCRIPTION OF NEW NOTES
The Old Notes were, and the New Notes will be, issued pursuant to the
Indenture (the "Indenture") among the Company, the Guarantors and First Union
National Bank, as trustee (the "Trustee"), a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
terms of the New Notes and the Old Notes will be substantially identical to each
other, except for transferability. Under the terms of the Indenture, the
covenants and events of default will apply equally to the New Notes and the Old
Notes and the New Notes and the Old Notes will be treated as one class for all
actions to be taken by the holders thereof and for determining their respective
rights under the Indenture. The terms of the New Notes include those set forth
in the Indenture and those made a part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended and as in effect on the date of the
Indenture (the "Trust Indenture Act"). The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and the Trust Indenture Act
for a statement thereof. A copy of the Indenture has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The Old Notes and
the New Notes are referred to herein, collectively, as the "Notes."
The following summary of certain provisions of the Indenture and the
Notes does not purport to be complete and is qualified in its entirety by
reference to the Indenture and the Notes, including the definitions therein of
certain terms used below and those terms made a part thereof by the Trust
Indenture Act. Capitalized terms that are used but not otherwise defined below
under the caption "Certain Definitions" have the meaning assigned to them in the
Indenture and such definitions are incorporated herein by reference. The
definitions of certain terms used in the following summary are set forth below
under "Certain Definitions."
The Indenture authorizes a maximum principal amount of $130,000,000 of
Notes at any one time outstanding. The New Notes will be issued solely in
exchange for an equal principal amount of Old Notes pursuant to the Exchange
Offer. See "--Registration Rights Agreement." The terms of the New Notes will be
the same in all material respects
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as the form and terms of the Old Notes except that (i) interest thereon will
accrue from the last date on which interest was paid on the Old Notes, or if no
such interest has been paid, from March 6, 1998, (ii) the New Notes will not
contain restrictions on transfer and (iii) except as provided herein, the New
Notes will not be eligible for Liquidated Damages.
GENERAL
The Old Notes are, and the New Notes will be, general unsecured
obligations of the Company, subordinated in right of payment to the prior
payment in full of all existing and future Senior Debt of the Company, including
the obligations of the Company under the Credit Facility. See "Subordination."
The New Notes will be guaranteed, jointly and severally, on an unsecured senior
subordinated basis by the Guarantors. The Guarantees will be subordinated in
right of payment to the prior payment in full of all existing and future Senior
Debt of the Guarantors, including the obligations of the Guarantors under the
Credit Facility. See "Subsidiary Guarantees." At December 31, 1997, on a pro
forma basis after giving effect to the issuance of the Old Notes and the
application of the net proceeds therefrom to repay amounts outstanding under the
Credit Facility, the Company would have had approximately $239.5 million of
Senior Debt outstanding and the Guarantors would have had no Senior Debt
outstanding other than $239.5 million of guarantees by the Guarantors of the
Company's obligations under the Credit Facility.
The Indenture provides that the Old Notes and the New Notes will
constitute one class of securities for all purposes, will vote and consent
together on all matters as one class and will not have the right to vote or
consent as a separate class on any matter.
Restrictions in the Indenture on the ability of the Company and its
Restricted Subsidiaries to incur additional Indebtedness, to consummate Asset
Sales, to enter into transactions with Affiliates and to enter into mergers,
consolidations or sales of all or substantially all of their respective assets
may make more difficult or discourage a takeover of the Company, whether favored
or opposed by the management of the Company. Although such restrictions cover a
wide variety of arrangements which traditionally have been used to effect highly
leveraged transactions, the Indenture may not afford holders of Notes protection
in all circumstances from the adverse aspects of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction.
As of the date of the Indenture, all of the Company's Subsidiaries were
Guarantors and Restricted Subsidiaries. However, under certain circumstances,
the Company will be able to designate current or future Subsidiaries as
Unrestricted Subsidiaries. Unless otherwise indicated, Unrestricted Subsidiaries
will not be subject to any of the restrictive covenants set forth in the
Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount to $130 million and
will mature on March 15, 2008. Interest on the New Notes will accrue at the rate
of 9% per annum and will be payable semiannually in arrears on March 15 and
September 15, commencing on September 15, 1998, to Holders of record on the
immediately preceding March 1 and September 1. Interest on the New Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Principal, premium, if any, and interest and Liquidated Damages (as defined
under the caption "Registration Rights; Liquidated Damages"), if any, on the
Notes will be payable at the office or agency of the Company maintained for such
purpose or, at the option of the Company, payment of interest may be made by
check mailed to the Holders of the Notes at their respective addresses set forth
in the register of Holders of Notes; provided that all payments of principal,
premium, if any, and interest and Liquidated Damages, if any, with respect to
Notes held by Holders holding in excess of $1.0 million in aggregate principal
amount of Notes that have given wire transfer instructions to the Company will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency will be the office of the Trustee
maintained for such purpose. The New Notes will be issued in denominations of
$1,000 and integral multiples thereof.
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SUBSIDIARY GUARANTEES
The Company's payment obligations under the Old Notes is, and under the
New Notes will be, jointly and severally guaranteed on an unsecured senior
subordinated basis by the Guarantors (the "Guarantees"). (Section 11.01) The
Guarantee of each Guarantor is subordinated in right of payment to the prior
payment in full of all existing and future Senior Debt of such Guarantor on
substantially the same terms as the Notes are subordinated to the Senior Debt of
the Company. (Article 12) The obligations of each Guarantor under its Guarantee
provides that they will be limited so as not to constitute a fraudulent
conveyance under applicable law. (Section 11.06) See "Risk Factors--Fraudulent
Conveyance; Preferential Transfer."
The Indenture provides that no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
Person, whether or not affiliated with such Guarantor, unless: (i) the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor under the Notes and the
Indenture pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee (provided, that this clause (i) shall not apply to
any merger or consolidation contemplated by clause (a) of the next succeeding
paragraph); (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iii) the Company would be permitted,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio set forth in
the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock." (Section 11.03) The foregoing will not prohibit a
merger between a Guarantor and another Guarantor or a merger between a Guarantor
and the Company or a Holding Company Restructuring.
The Indenture provides that in the event of (a) a sale or other
disposition of all or substantially all of the assets of any Guarantor, by way
of merger, consolidation or otherwise (provided that in the case of a merger or
consolidation, the provisions of clauses (ii) and (iii) of the preceding
paragraph are complied with), (b) a sale or other disposition of all of the
Capital Stock of any Guarantor or (c) a Guarantor being designated by the
Company as an Immaterial Subsidiary, then such Guarantor will automatically and
unconditionally be released, discharged and relieved of its Guarantee and any
obligations thereunder; provided that, in the case of any such transaction which
constitutes an Asset Sale, the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of the Indenture. See
"Repurchase at the Option of Holders--Asset Sales." (Section 11.04)
SUBORDINATION
The payment of all Obligations on the Old Notes is, and under the New
Notes will be, subordinated in right of payment, as set forth in the Indenture,
to the prior payment in full of all existing and future Senior Debt, whether
outstanding on the date of the Indenture or thereafter incurred. (Section 10.01)
Upon any payment or distribution to creditors of the Company in a
liquidation or dissolution of the Company, or in a bankruptcy, reorganization,
insolvency, receivership or any such proceeding relating to the Company or its
property, an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities, the holders of Senior Debt will be entitled to
receive payment in full in cash or Cash Equivalents of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt, whether or
not allowed or allowable in such proceeding) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes, and until all
Obligations with respect to Senior Debt are paid in full in cash or Cash
Equivalents, any payment or distribution to which the Holders of Notes would be
entitled shall be made to the holders of Senior Debt (except that Holders of
Notes may receive and retain (i) Permitted Junior Securities and (ii) payments
made from the trust described under "Legal Defeasance and Covenant Defeasance").
The term "payment" means, with respect to the Notes, any payment, whether in
cash or other assets or property, of interest, principal (including redemption
price and purchase price), premium, Liquidated Damages, if any, or any other
amount on, of or in respect of the Notes, any other acquisition of Notes and any
deposit into the trust described under "Legal Defeasance and Covenant
Defeasance," below. The verb "pay" has a correlative meaning. (Section 10.02)
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The Company also may not make any payment or distribution upon or in
respect of the Notes (except in Permitted Junior Securities or from the trust
described under "Legal Defeasance and Covenant Defeasance") if (i) a default in
the payment of any Obligations with respect to Designated Senior Debt occurs and
is continuing (a "payment default") or any other default on Designated Senior
Debt occurs and the maturity of such Designated Senior Debt is accelerated in
accordance with its terms or (ii) a default, other than a payment default,
occurs and is continuing with respect to Designated Senior Debt that permits
holders of Designated Senior Debt as to which such default relates to accelerate
its maturity (a "non-payment default") and, in the case of this clause (ii)
only, the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Company or the holders of any Designated Senior Debt. Payments
on the Notes may and shall be resumed (a) in the case of a payment default, upon
the date on which such default is cured or waived and, in the case of Designated
Senior Debt that has been accelerated, such acceleration has been rescinded, and
(b) in case of a non-payment default, the earlier of the date on which such
non-payment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received unless the maturity of any
Designated Senior Debt has been accelerated. No new period of payment blockage
may be commenced on account of any non-payment default unless and until 360 days
have elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No non-payment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days. (Section
10.03)
The Indenture further requires that the Company promptly notify holders
of Senior Debt if payment of the Notes is accelerated because of an Event of
Default. The Company may not pay any such accelerated Notes until five Business
Days after such holders receive notice of such acceleration and, thereafter, may
make such payment only if otherwise permissible under the subordination
provisions of the Indenture. (Section 10.06)
As a result of the subordination provisions described above, in the
event of a liquidation or insolvency, Holders of the Notes may recover less
ratably than creditors of the Company who are holders of Senior Debt. See "Risk
Factors -- Subordination."
OPTIONAL REDEMPTION
Except as provided in the next paragraph, the Notes are not redeemable
at the Company's option prior to March 15, 2003. Thereafter, the Notes are
subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, together with
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve month period beginning
on March 15 of the years indicated below (Section 3.07):
YEAR PERCENTAGE
---- ----------
2003........................................ 104.500%
2004........................................ 103.000
2005........................................ 101.500
2006 and thereafter......................... 100.000
Notwithstanding the foregoing, at any time prior to March 15, 2001, the
Company on one or more occasions may redeem up to 35% of the aggregate principal
amount of Notes originally issued with the net proceeds of one or more offerings
of common stock of the Company for cash at a redemption price of 109.000% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable date of redemption; provided that at
least 65% of the aggregate principal amount of the Notes remains outstanding
immediately after the occurrence of each such redemption. (Section 3.07)
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If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or by such other method as the Trustee deems fair and appropriate and without
regard as to whether the Notes to be redeemed are Old Notes or New Notes;
provided that no Notes with a principal amount of $1,000 or less shall be
redeemed in part. (Section 3.02) Notice of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Notes to be redeemed at its registered address. (Section 3.03) If
any Note is to be redeemed in part only, the notice of redemption that relates
to such Note shall state the portion of the principal amount thereof to be
redeemed. (Section 3.03) A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. (Section 3.06) On and after the redemption
date, interest will cease to accrue on Notes or portions thereof called for
redemption. (Section 3.05)
MANDATORY REDEMPTION
Except as set forth below under "Repurchase at the Option of Holders,"
the Company is not required to make any mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
Upon the occurrence of a Change of Control, each Holder of Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes pursuant to the procedures required by the Indenture and described in such
notice. The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. (Section 4.14)
On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes or portions thereof so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Indenture will provide that, prior to being required to comply with
the provisions of this covenant, but in any event within 90 days following a
Change of Control, the Company will either repay all outstanding Senior Debt or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by this
covenant. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. (Section 4.14)
The Change of Control provisions described above will be applicable
whether or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar restructuring.
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The Credit Facility prohibits the Company from purchasing any Notes
upon a Change of Control, and also provides that certain change of control
events (including a Change of Control under the Indenture) with respect to the
Company constitute a default thereunder. Any future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may
contain similar restrictions and provisions. In the event a Change of Control
occurs at a time when the Company is prohibited from purchasing Notes, the
Company could seek the consent of its lenders to the purchase of Notes or could
attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing Notes. In such case, the Company's
failure to purchase tendered Notes would constitute an Event of Default under
the Indenture which would, in turn, constitute a default under the Credit
Facility. In such circumstances, the subordination provisions in the Indenture
would likely restrict payments to the Holders of Notes. See "Risk
Factors--Potential Inability to Effect a Change of Control Offer or an Asset
Sale Offer" and "--Subordination."
The Company will not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer. (Section 4.14)
The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of "all or substantially
all" of the assets of the Company and its Subsidiaries taken as whole. (Section
1.01) There is no precisely established definition of the phrase "substantially
all" under applicable law. Accordingly, it may not be clear when an event occurs
giving rise to the ability of a Holder of Notes to require the Company to
repurchase such Notes as a result of a sale, lease, transfer, conveyance or
other disposition of less than all of the assets of the Company and its
Subsidiaries.
Asset Sales
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company or the Restricted Subsidiary, as the case may be, receives consideration
at least equal to the fair market value (as determined in good faith by the
Board of Directors of the Company) of the assets or Equity Interests issued or
sold or otherwise disposed of and (ii) at least 75% of the consideration
therefor is received by the Company or such Restricted Subsidiary at or prior to
consummation of the Asset Sale and is in the form of cash or Cash Equivalents;
provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes or, in the case of liabilities of a Restricted
Subsidiary, the Guarantee of such Subsidiary) that are assumed by the transferee
of any such assets, and (y) any securities, notes, promises to pay or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted Subsidiary into
cash (to the extent of the cash received) within 180 days after receipt, shall
be deemed to be consideration received (for purposes of clause (i) above) and
cash received at or prior to the consummation of the Asset Sale (for purposes of
clause (ii) above). (Section 4.10)
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to repay
Senior Debt or Pari Passu Indebtedness (provided that if the Company shall so
reduce in excess of $15.0 million of Pari Passu Indebtedness, it will equally
and ratably make an Asset Sale Offer (in accordance with the procedures set
forth below for an Asset Sale Offer) to all Holders) and/or (b) to an investment
in a Related Business (or enter into a definitive agreement committing to so
invest, provided that the transactions contemplated by any such agreement are
later consummated), or to the making of a capital expenditure or the acquisition
of other tangible assets, product distribution rights or intellectual property
or rights thereto, in each case, in a Related Business (as determined in good
faith by the Board of Directors of the Company). Pending the final application
of any such Net Proceeds, the Company may temporarily reduce borrowings under
the Credit Facility or otherwise invest such Net Proceeds in any manner that is
not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph will be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $15.0 million, the Indenture provides that the Company will
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(i) make an offer to all Holders of Notes and (ii) prepay, purchase or redeem
(or make an offer to do so) any other Pari Passu Indebtedness of the Company in
accordance with provisions requiring the Company to prepay, purchase or redeem
such Indebtedness with the proceeds from any asset sales (or offer to do so),
pro rata in proportion to the respective principal amounts (or accreted value,
as applicable) of the Notes and such other Indebtedness required to be prepaid,
purchased or redeemed or tendered for pursuant to such offer (an "Asset Sale
Offer"), to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
principal amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for any
general corporate purpose not in contravention of the other covenants provided
for in the Indenture. Upon completion of an Asset Sale Offer, the amount of
Excess Proceeds shall be reset to zero. (Sections 4.10 and 3.09)
The Credit Facility prohibits the Company from purchasing any Notes in
connection with an Asset Sale Offer and also provides that certain asset sales
will constitute a default thereunder. Any future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may
contain similar restrictions and provisions. In the event the Company is
required to make an Asset Sale Offer at a time when the Company is prohibited
from purchasing Notes, the Company could seek the consent of its lenders to the
purchase of Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company will remain prohibited from purchasing Notes. In such
case, the Company's failure to consummate an Asset Sale Offer would constitute
an Event of Default under the Indenture which would, in turn, constitute a
default under the Credit Facility. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of the
Notes. See "Risk Factors--Potential Inability to Effect a Change of Control
Offer or an Asset Sale Offer" and "--Subordination."
CERTAIN COVENANTS
Restricted Payments
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or
pay any dividend or make any distribution (including in connection with any
merger or consolidation) on account of any Equity Interests of the Company or
any of its Restricted Subsidiaries (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Wholly Owned Restricted
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company, any of its Restricted
Subsidiaries or any other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Restricted Subsidiary of the
Company); (iii) make any principal or, with respect to Disqualified Stock,
similar payment on, or purchase, redeem, defeasance or otherwise acquire or
retire for value (x) any Indebtedness that is subordinated in right of payment
to the Notes or a Guarantee or (y) any Disqualified Stock, except at the
original final maturity thereof or in accordance with the scheduled mandatory
redemption or repayment provisions set forth in the original documentation
governing such Indebtedness or Disqualified Stock (but not pursuant to any
mandatory offer to repurchase upon the occurrence of any event); or (iv) make
any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would be permitted, immediately after giving
effect to such Restricted Payment, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio set
forth in the covenant entitled "Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock"; and
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(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (the amount so expended,
if other than in cash, to be determined in good faith by the Board of
Directors of the Company and excluding Restricted Payments permitted by
clauses (ii), (iii), (iv), (vi), (vii), (x) and (xiii) of the next
succeeding paragraph), is less than the sum of (1) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from January 1, 1998 to the end of the Company's
most recently ended fiscal quarter for which financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, minus 100% of
such deficit), plus (2) 100% of the aggregate net proceeds (including
the fair market value of non-cash proceeds as determined in good faith
by the Board of Directors of the Company) received by the Company from
contributions of capital or the issue or sale since the date of the
Indenture of Equity Interests of the Company or of debt securities of
the Company that have been converted into such Equity Interests (other
than Equity Interests (or convertible debt securities) sold to a
Restricted Subsidiary of the Company and other than Disqualified Stock
or debt securities that have been converted into Disqualified Stock),
provided that no proceeds received by the Company from the issue or
sale of any Equity Interests issued by the Company will be counted in
determining the amount available for Restricted Payments under this
clause (c) to the extent such proceeds were used to redeem, repurchase,
retire or acquire any Equity Interests of the Company pursuant to
clause (ii) of the next succeeding paragraph, to defeasance, redeem or
repurchase any subordinated Indebtedness pursuant to clause (iii) of
the next succeeding paragraph or to redeem, repurchase, retire or
acquire any Equity Interests of the Company pursuant to clause (iv) of
the next succeeding paragraph, plus (3) to the extent that any
Restricted Investment that was made after the date of the Indenture is
sold for cash or otherwise liquidated or repaid for cash, the cash
return of capital with respect to such Restricted Investment (less the
cost of disposition, if any).
The foregoing provisions will not prohibit any or all of the following
Restricted Payments (each and all of which: (1) constitutes an independent
exception to the foregoing provisions and (2) may occur in addition to any
action permitted to occur under any other exception): (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at such date
of declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the net proceeds
of, the substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of other Equity Interests of the Company (other than Disqualified
Stock); (iii) the defeasance, redemption or repurchase of subordinated
Indebtedness with the net proceeds from an incurrence of Permitted Refinancing
Indebtedness or the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); (iv) the redemption, repurchase, retirement or other
acquisition of any Disqualified Stock in exchange for, or out of the net
proceeds of, the substantially concurrent sale (other than to a Restricted
Subsidiary) of Disqualified Stock; provided that any Disqualified Stock so
issued has a stated, liquidation, redemption or similar value no greater than
the Disqualified Stock being redeemed, repurchased, retired or otherwise
acquired and matures, is mandatorily redeemable and/or is redeemable at the sole
option of the holder thereof on a date later than the date of the Disqualified
Stock being redeemed, repurchased, retired or otherwise acquired; (v) the
funding of loans (but not including the forgiveness of any such loan) to, and
payment of directors' and officers' insurance premiums for the benefit of,
executive officers, directors, employees or shareholders for relocation loans,
bonus advances and other purposes consistent with past practices or the
purchase, redemption or other acquisition for value of shares of Capital Stock
of the Company (other than Disqualified Stock) or options on such shares held by
the Company's or the Restricted Subsidiaries' directors, officers or employees
or former directors, officers or employees (or their estates or trusts or
beneficiaries under their estates or trusts for the benefit of such
beneficiaries) upon the death, disability, retirement or termination of
employment of such current or former directors, officers or employees pursuant
to the terms of an employee benefit plan or any other agreement pursuant to
which such shares of Capital Stock or options were issued or pursuant to a
severance, buy-sell or right of first refusal agreement with such current or
former directors, officers or employees, provided that the aggregate amount of
any such loans funded and cash consideration paid, or distributions made,
pursuant to this clause (v) does not in any one fiscal year exceed $5.0 million;
(vi) the payment of dividends by a Restricted Subsidiary on any class of common
stock of such Restricted Subsidiary if such dividend is paid pro rata to all
holders of such class of common stock; (vii) the repurchase of any class of
common stock of a Restricted Subsidiary if such repurchase is made pro rata with
respect to such class of common stock;
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(viii) payments of cash, not to exceed $5.0 million in the aggregate, (A) in
lieu of the issuance of fractional shares in connection with stock dividends and
other distributions on account of, and otherwise payable in, Equity Interests
and (B) to redeem Equity Interests in connection with a rights plan adopted by
the Board of Directors of the Company; (ix) payments in respect of the warrant
originally issued to Bristol-Myers Squibb Company in connection with the
Linvatec Acquisition to acquire 1,000,000 shares (subject to adjustment) of the
Company's common stock; (x) any other Restricted Payment if the amounts thereof,
together with all other Restricted Payments made pursuant to this clause (x)
since the date of the Indenture, shall not exceed $10.0 million; (xi) the
payment of dividends by a Foreign Subsidiary to a foreign national on any class
of common stock of such Foreign Subsidiary that, pursuant to requirements of
local law in a jurisdiction outside the United States, is held by such foreign
national; (xii) payments pursuant to or in connection with consolidations,
mergers or transfers of assets that comply with the provisions of the Indenture
applicable to mergers, consolidations or sales of assets (including share
exchanges pursuant to state law), not to exceed $15.0 million in the aggregate;
and (xiii) the redemption, repurchase or other acquisition of Notes. In the
event that a Restricted Payment meets the criteria of more than one of the types
of Restricted Payments described in clauses (i) through (xiii) of this
paragraph, the Company, in its sole discretion, shall classify such Restricted
Payment and only be required to include the amount and type of such Restricted
Payment in one of such clauses. (Section 4.07)
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary; provided, however, that (i) no Default or Event of
Default shall have occurred and be continuing or would arise therefrom, (ii)
such designation, when considered as an Investment as described in the next
sentence, is at that time permitted under the "Restricted Payments" covenant and
(iii) immediately after giving effect to such designation, the Company would be
able to incur at least $1.00 of additional Indebtedness under the Fixed Charge
Coverage Ratio set forth in the covenant entitled "Incurrence of Indebtedness
and Issuance of Disqualified Stock and Preferred Stock." All such outstanding
Investments will be deemed to constitute Restricted Investments in an amount
equal to the fair market value (as determined by the Board of Directors of the
Company in good faith) of such Investments at the time of such designation. Such
designation will only be permitted if under the terms of the Indenture such
Restricted Investment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Not later than the date of making any Restricted Payment (excluding
Restricted Payments permitted by (ii), (iii), (iv), (vi), (vii), (x) and (xiii)
of the second preceding paragraph), the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by the "Restricted
Payments" covenant were computed, which calculations shall be based upon the
Company's latest available financial statements.
Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock
The Indenture provides that (i) the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, incur,
contingently or otherwise, any Indebtedness (including Acquired Debt and
Disqualified Stock), and (ii) the Company will not permit any of its Restricted
Subsidiaries that is not a Guarantor to issue any shares of preferred stock;
provided, however, that the Company and the Guarantors may incur Indebtedness
(including Acquired Debt and Disqualified Stock) if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least 2.00 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at the
beginning of such four-quarter period. (Section 4.09)
The foregoing provisions will not apply to any of the following (each
and all of which: (1) may be issued or incurred, (2) constitutes an independent
exception to the foregoing provisions and (3) may be incurred in addition to any
other Indebtedness permitted to be incurred under the foregoing paragraph or any
other exception): (i) the incurrence by the Company or any Guarantor of
Indebtedness constituting term loans pursuant to one or more Credit Agreements
in an aggregate principal amount outstanding at any one time not to exceed
$250.0 million (A) less the aggregate amount of all mandatory repayments (a
"Mandatory Repayment") of the principal of any term Indebtedness under such
Credit
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Agreements that have been made since the date of the Indenture (or which would
otherwise have been required to have been made but for the fact that a prior
optional repayment has been made of the principal of any term Indebtedness under
such Credit Agreements) pursuant to the amortization schedule of any Credit
Agreement (other than any Mandatory Repayment made concurrently with any
refinancing or refunding of such Credit Agreements or required to be made with
the net proceeds from the offering of the Notes being made hereby) and (B) less
the aggregate amount of all Net Proceeds of Asset Sales applied pursuant to the
first sentence of the second paragraph under the covenant entitled "Asset Sales"
to permanently reduce term Indebtedness under such Credit Agreements; (ii) the
incurrence by the Company or any Guarantor pursuant to one or more Credit
Agreements of Indebtedness incurred under revolving credit arrangements and
letters of credit in an aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount equal to the maximum
potential liability of the Company or the relevant Guarantor thereunder) not to
exceed the greater of (A) $100.0 million in the aggregate or (B) the sum of (x)
85% of the Company's accounts receivable and (y) 50% of the Company's inventory;
(iii) the incurrence by the Company and any Guarantor of Indebtedness
represented by the Notes and any Guarantee thereof; (iv) the incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness represented by (X)
Capital Lease Obligations, mortgage financings, purchase money obligations or
sale and leaseback transactions, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property used in the business of the Company or such Restricted
Subsidiary and (Y) industrial revenue bonds, pollution control bonds or other
tax exempt financing, provided the aggregate principal amount of Indebtedness
incurred pursuant to this clause (iv) shall not exceed $12.5 million at any time
outstanding; (v) Existing Indebtedness; (vi) the incurrence by the Company or
any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defeasance or refund, Indebtedness (or any successive refinancing
thereof) that was permitted by the Indenture; (vii) the incurrence by the
Company or any of its Restricted Subsidiaries of intercompany Indebtedness
between or among the Company and any of its Restricted Subsidiaries, provided,
however, that (a) any subsequent issuance or transfer (other than for security
purposes) of Equity Interests and (b) any subsequent sale or other transfer
(including for security purposes other than to secure Indebtedness permitted to
be incurred pursuant to clause (i) or (ii) of this paragraph) of such
Indebtedness, in each case, that results in any such Indebtedness being held by
a Person other than the Company or any of its Restricted Subsidiaries shall be
deemed to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be; (viii) the incurrence by the Company
or any of its Restricted Subsidiaries of Hedging Obligations that are incurred
for the purpose of fixing or hedging (a) interest rate risk with respect to any
floating rate Indebtedness of such Person so long as such floating rate
Indebtedness is permitted by the terms of the Indenture to be outstanding or (b)
exchange rate risk with respect to agreements or Indebtedness of such Person
payable or denominated in a currency other than U.S. dollars; (ix) the
incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt;
provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt
of an Unrestricted Subsidiary, such event shall be deemed to constitute an
incurrence of Indebtedness by a Restricted Subsidiary of the Company; (x) the
incurrence by any Foreign Subsidiary of Indebtedness and letters of credit (with
letters of credit being deemed to have a principal amount equal to maximum
potential liability of such Foreign Subsidiary thereunder) in an aggregate
maximum principal amount outstanding at any one time not to exceed $10.0
million; (xi) Obligations in respect of performance and surety bonds provided by
the Company or any Guarantor in the ordinary course of business; (xii) letters
of credit and bankers' acceptances in an aggregate face amount at any time
outstanding not to exceed $5.0 million; (xiii) Indebtedness of a Securitization
Subsidiary incurred in connection with a Permitted Receivables Financing,
provided that after giving effect to the incurrence thereof, the Company would
be able to incur at least $1.00 of Indebtedness under the first paragraph or
clause (i) or (ii) of this second paragraph of this "Incurrence of Indebtedness
and Issuance of Disqualified Stock and Preferred Stock" covenant; (xiv) Acquired
Debt not to exceed $25.0 million at any time outstanding; (xv) Indebtedness in
an aggregate amount not to exceed $1.0 million owed to the Empire State
Development Corporation; (xvi) guarantees made in the ordinary course of
business by the Company and any of its Restricted Subsidiaries of lease
obligations of their customers in respect of equipment sold by the Company or
any of its Restricted Subsidiaries to a third party and then leased to such
customer in an aggregate amount outstanding at any time not to exceed $10.0
million; (xvii) the incurrence by the Company and any Guarantor of Indebtedness
in an aggregate principal amount at any time outstanding not to exceed $25.0
million; and (xviii) guarantees by any Restricted Subsidiary of Indebtedness
incurred by the Company or any other Restricted Subsidiary in compliance with
the provisions set forth under the first paragraph or this paragraph of this
"Incurrence
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of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" covenant
may be guaranteed pursuant to this clause (xviii). (Section 4.09)
For purposes of determining compliance with the "Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock" covenant
described in the two preceding paragraphs, (i) in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the clauses of the preceding paragraph or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Company, in its
sole discretion, shall classify such item of Indebtedness in any manner that
complies with this covenant, provided that an item of Indebtedness satisfying
the criteria of the first paragraph or more than one of the clauses described in
the preceding paragraph may be divided and classified in more than one of the
types of Indebtedness described above and (ii) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in conformity with GAAP.
For the avoidance of doubt and as an example of the application of the foregoing
provisions, the Company or any Guarantor shall be permitted to incur
Indebtedness constituting term loans pursuant to one or more Credit Agreements
in an aggregate principal amount outstanding not to exceed the sum of (a) the
amount permitted by clause (i) of the foregoing paragraph and (b) the amount
that the Company and its Restricted Subsidiaries are then entitled to incur
pursuant to the first paragraph of this Section, and the Guarantors shall be
permitted to guarantee the Obligations of the Company under such Credit
Agreements. (Section 4.09)
Sale and Leaseback Transactions
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company and any Restricted Subsidiary may enter
into a sale and leaseback transaction if (i) the Company or such Restricted
Subsidiary could have incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
(a) the first paragraph of the covenant "Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock" and/or (b) clause (iv) of the second
paragraph of the covenant "Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock" (as limited by the proviso to such
clause), (ii) the Lien to secure such Indebtedness does not extend to or cover
any assets of the Company or such Restricted Subsidiary other than the assets
which are the subject of the sale leaseback transaction, (iii) the gross cash
proceeds of such sale and leaseback transaction are at least equal to the fair
market value (as determined in good faith by the Board of Directors of the
Company and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and (iv)
the transfer of assets in such sale and leaseback transaction is permitted by,
and the proceeds of such transaction are applied in compliance with, the "Asset
Sales" covenant. Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may enter into sale and leaseback transactions resulting in
Attributable Debt at any time outstanding relating to such transactions not in
excess of $10.0 million in the aggregate without complying with clause (iii) of
the preceding sentence. (Section 4.13)
Liens
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien (other than Permitted Liens) securing any
Obligations on any property or asset now owned or hereafter acquired, or on any
income or profits therefrom or assign or convey any right to receive income
therefrom, unless the Notes, and the Guarantees, as applicable, are either (i)
secured by a Lien on such property, assets, income or profits that is senior in
priority to the Lien securing such other Obligations, if such other Obligations
are subordinated in right of payment to the Notes and/or the Guarantees or (ii)
equally and ratably secured by a Lien on such property, assets, income or
profits with the Lien securing such other Obligations, if such other Obligations
are pari passu in right of payment to the Notes and/or the Guarantees. (Section
4.12)
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Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
consensual restriction on the ability of any Restricted Subsidiary to: (i)(a)
pay dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries on its Capital Stock or (b) pay any Indebtedness owed to
the Company or any of its Restricted Subsidiaries; (ii) make loans or advances
to the Company or any of its Restricted Subsidiaries; or (iii) transfer any of
its properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness, as in effect on the date of the Indenture, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof permitted under the Indenture;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive in
the aggregate than those contained in the Existing Indebtedness, as in effect on
the date of the Indenture; (b) the Credit Facility and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof permitted under the Indenture; provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive in
the aggregate than those contained in the Credit Facility, as in effect on the
date of the Indenture; (c) the Indenture, the Notes and the Guarantees; (d)
applicable law; (e) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries, as in
effect at the time of acquisition (except to the extent such Indebtedness was
incurred in connection with, or in contemplation of, such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired (provided that in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred), and
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof permitted under the Indenture;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive in
the aggregate than those relating to such Indebtedness or Capital Stock in
effect at the time of the acquisition; (f) customary non-assignment provisions
in leases, licenses, contracts and other agreements entered into in the ordinary
course of business and consistent with past practices; (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired; (h) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive in the aggregate than those contained in the agreements
governing the Indebtedness being refinanced; (i) an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Equity Interests or property or assets of a Restricted Subsidiary; provided that
such restrictions are limited to the Restricted Subsidiary that is the subject
of such agreement; (j) restrictions created in connection with any Permitted
Receivables Financing; or (k) restrictions applicable to any Foreign Subsidiary
pursuant to Indebtedness permitted to be incurred pursuant to clause (x) of the
second paragraph of the covenant entitled "Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock;" provided that such
restrictions shall be limited to customary net worth, leverage, cash flow and
other financial ratios applicable to such Foreign Subsidiary, customary
restrictions on mergers and consolidations involving such Foreign Subsidiary,
customary restrictions on transactions with affiliates of such Foreign
Subsidiary and customary provisions subordinating the payment of intercompany
Indebtedness owed by such Foreign Subsidiary to the Company or any of its
Restricted Subsidiaries upon the occurrence of a default in respect of
Indebtedness of such Foreign Subsidiary or its Subsidiaries and/or events of
insolvency with respect to such Foreign Subsidiary or its Subsidiaries; and
provided, further, that in no event shall any Indebtedness (other than a Credit
Agreement) incurred by a Foreign Subsidiary prohibit such Foreign Subsidiary
from making any dividend or other distribution to the Company or its Restricted
Subsidiaries or from otherwise making any loan to the Company or its Restricted
Subsidiaries in the absence of a breach by such Foreign Subsidiary of the
covenants contained in such Indebtedness unless to do so would violate
applicable law. (Section 4.08)
Nothing contained in the preceding paragraph shall prevent the Company
or any Restricted Subsidiary from restricting the sale or other disposition of
property or assets of the Company or any of its Restricted Subsidiaries that
secure Indebtedness of the Company or any of its Restricted Subsidiaries.
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Merger, Consolidation or Sale of Assets
The Indenture provides that the Company may not consolidate or merge
with or into (whether or not the Company is the surviving entity), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions to, another
Person unless (i) the Company is the surviving corporation or the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made assumes all the obligations
of the Company under the Notes and the Indenture pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction, no Default or Event of Default exists; and (iv) the
Company or the Person formed by or surviving any such consolidation or merger,
or to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made will, at the time of such transaction after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the first paragraph of the covenant
entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock." The foregoing will not prohibit a consolidation or merger
between the Company and a Guarantor, the transfer of all or substantially all of
the properties or assets of the Company to a Guarantor or a Holding Company
Restructuring; provided that if the Company is not the surviving entity of such
transaction or the Person to which such transfer is made, the surviving entity
or the Person to which such transfer is made shall comply with clause (ii) of
this paragraph. (Section 5.01)
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan, advance
or guarantee with, or for the benefit of, any Person known by the Company to be
an Affiliate or which the Company should have known is an Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are no less favorable to the Company or such Restricted Subsidiary
than those that could have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person, (ii) if such
Affiliate Transaction involves aggregate consideration in excess of $2.0
million, the Company delivers to the Trustee a resolution of the Board of
Directors of the Company set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (i) above and such Affiliate
Transaction is approved by a majority of the disinterested members of the Board
of Directors of the Company and (iii) if such Affiliate Transaction involves
aggregate consideration in excess of $10.0 million, the Company delivers to the
Trustee an opinion as to the fairness of such Affiliate Transaction from a
financial point of view issued by an investment bank or accounting firm of
national standing, provided, however, that (a) any employment, consulting or
similar agreement (including any loan, but not any forgiveness thereof) entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business of the Company or such Restricted Subsidiary or any payment of
directors' and officers' insurance premiums, (b) transactions between or among
the Company and/or its Restricted Subsidiaries, (c) a Holding Company
Restructuring, (d) payment of employee benefits, including wages, salary,
bonuses, retirement plans and stock options, and director fees in the ordinary
course of business, (e) transactions in connection with a Permitted Receivables
Financing or an industrial revenue bond financing and (f) transactions that
constitute Restricted Payments permitted by the provisions of the Indenture
described above under the covenant entitled "Restricted Payments," in each case,
shall not be deemed Affiliate Transactions. (Section 4.11)
Anti-Layering
The Indenture provides that (i) the Company will not incur, create,
issue, assume, guarantee, or otherwise become liable for any Indebtedness that
is both (a) subordinate or junior in right of payment to any Senior Debt and (b)
senior in any respect in right of payment to the Notes and (ii) no Guarantor
will incur, create, issue, assume,
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guarantee or otherwise become liable for any Indebtedness that is both (a)
subordinate or junior in right of payment to its Senior Debt and (b) senior in
any respect in right of payment to its Guarantee. (Section 4.16)
Reports
The Indenture provides that, whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "Commission"), so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of the Company and its
consolidated subsidiaries and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, for so long
as any Notes constitute "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, the Company will furnish to Holders and to
securities analysts and prospective investors, upon their request, such other
information as may be required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act. (Section 4.03)
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event
of Default:
(i) default for 30 consecutive days in the payment when due of
interest or Liquidated Damages, if any, with respect to the Notes
(whether or not prohibited by the subordination provisions of the
Indenture);
(ii) default in payment when due of principal or premium, if any,
on the Notes at maturity, upon redemption or otherwise (whether or not
prohibited by the subordination provisions of the Indenture);
(iii) failure by the Company or any Guarantor for 30 consecutive
days after receipt of notice from the Trustee or Holders of at least
25% in principal amount of the Notes then outstanding to comply with
the provisions described under the covenants entitled "Change of
Control," "Asset Sales," "Restricted Payments," "Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock" or
"Merger, Consolidation or Sale of Assets";
(iv) failure by the Company or any Guarantor for 60 consecutive
days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with its other
agreements in the Indenture or the Notes;
(v) default 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 of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists, or is created after the date of
the Indenture, which default (A)(i) is caused by a failure to pay when
due at final stated maturity (giving effect to any grace period related
thereto) principal of such Indebtedness (a "Payment Default") or (ii)
results in the acceleration of such Indebtedness prior to its final
stated maturity and (B) in each case, the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been accelerated as a result of any matter
contemplated in clause (v)(A)(i) or (v)(A)(ii), aggregates $10.0
million or more;
(vi) failure by the Company or any of its Restricted Subsidiaries
to pay final non-appealable judgments (to the extent not covered by
insurance or as to which the insurer has not acknowledged coverage in
writing) aggregating in excess of $10.0 million, which judgments are
not paid, fully bonded, discharged or stayed within 60 days after their
entry;
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(vii) certain events of bankruptcy or insolvency with respect to
the Company or any Restricted Subsidiary of the Company that is a
Significant Subsidiary or group of Restricted Subsidiaries of the
Company that, together, would constitute a Significant Subsidiary; and
(viii) the termination of the Guarantee(s) of either a Guarantor
that is a Significant Subsidiary or group of Guarantors that together
constitute a Significant Subsidiary for any reason not permitted by the
Indenture, or the disaffirmance in writing of any Person acting on
behalf of any such Guarantor or group of Guarantors of its or their
Obligations under any such Guarantee(s). (Section 6.01)
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable by notice in writing to the Company
and the Trustee specifying the respective Event of Default and that it is a
"notice of acceleration" (the "Acceleration Notice"), and the same (i) shall
become immediately due and payable or (ii) if there are any amounts outstanding
under the Credit Facility, shall become immediately due and payable upon the
first to occur of an acceleration under the Credit Facility or five Business
Days after receipt by the Company and the Representative under the Credit
Facility of such Acceleration Notice, but only if such Event of Default is then
continuing. (Section 6.02) Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency with
respect to the Company, all outstanding Notes will become due and payable
without further action or notice. (Section 6.02) Holders of the Notes may not
enforce the Indenture or the Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
(Section 6.05)
The Holders of a majority in aggregate principal amount of the Notes
then outstanding, by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of interest or premium on, or principal of, the Notes. (Section 6.04)
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in such Holders' interest. (Section 7.05)
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default to deliver to the Trustee a
statement specifying such Default or Event of Default. (Section 4.04)
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company under the Notes, any Guarantee or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes
and the Guarantees. Such waiver may not be effective to waive liabilities under
the federal securities laws and it is the view of the Commission that such a
waiver is against public policy. (Section 14.07)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all
obligations of the Company and the Guarantors discharged with respect to the
outstanding Notes and the Guarantees ("legal defeasance"). Such legal defeasance
means that the Company will be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Notes, except for (a) the rights of
Holders of outstanding Notes to receive payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Notes when
such payments are due, or on the redemption date, as the case may be, (b) the
Company's obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security payments
held in trust, (c) the rights, powers, trust, duties and
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immunities of the Trustee, and the Company's obligations in connection therewith
and (d) the legal defeasance provisions of the Indenture. In addition, the
Company may, at its option and at any time, elect to have the obligations of the
Company and the Guarantors released with respect to certain covenants that are
described in the Indenture ("covenant defeasance") and thereafter any omission
to comply with such obligations shall not constitute a Default or Event of
Default with respect to the Notes. In the event covenant defeasance occurs,
certain events (not including nonpayment, bankruptcy, receivership,
rehabilitation and insolvency events) described under "Events of Default and
Remedies" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either legal defeasance or covenant defeasance,
(i) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date, (ii) in the case of legal defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such legal defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such legal defeasance had not occurred, (iii) in the case of covenant
defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred, (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Events of Defaults from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit, (v) such
legal defeasance or covenant defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound, including, without limitation, the Credit
Agreement, (vi) the Company must have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company, as applicable,
with the intent of preferring the Holders of Notes over the other creditors of
the Company, with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others, and (viii) the Company must deliver to the
Trustee an Officers' Certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to the legal defeasance or the
covenant defeasance have been complied with. (Article 8)
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Note selected for redemption. Also, the Company is not required to transfer
or exchange any Note for a period of 15 days before a selection of Notes to be
redeemed. (Section 2.05)
The registered Holder of a Note will be treated as the owner of it for
all purposes.
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AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the
Indenture, the Notes or the Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including consents obtained in connection with a tender offer
or exchange offer for Notes), and any existing default or compliance with any
provision of the Indenture, the Notes or the Guarantees may be waived with the
consent of the Holders of a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for Notes).
Without the consent of each Holder affected, however, an amendment or
waiver may not (with respect to any Note held by a nonconsenting Holder): (i)
reduce the principal amount of Notes; (ii) reduce the principal of or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes or any Change of Control Offer; (iii) reduce the rate of
or change the time for payment of interest or Liquidated Damages on any Notes;
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration); (v) make any Note payable in money other
than that stated in the Notes; (vi) waive a redemption or repurchase payment
with respect to any Note; or (vii) make any change in the foregoing amendment
and waiver provisions. Without the consent of the lenders named in the Credit
Facility, the Company may not amend or supplement the subordination provisions
with respect to the Notes.
Notwithstanding the foregoing, without the consent of any Holder of
Notes, the Company, the Guarantors and the Trustee may amend or supplement the
Indenture, the Guarantees or the Notes to cure any ambiguity, defect or
inconsistency or to correct or supplement any provision herein that may be
inconsistent with any other provision herein, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the Notes
in the case of a merger or consolidation, to make any change or any provision
(i) that would provide any additional rights or benefits to the Holders of the
Notes, that is required to make a Guarantee a binding obligation under state law
or (ii) that does not adversely affect the legal rights under the Indenture of
any such Holder, to comply with requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act or to allow any Guarantor to guarantee the Notes. (Article 9)
GOVERNING LAW
The Indenture and the Old Notes are, and the New Notes will be,
governed by, and construed in accordance with, the laws of the State of New
York.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the
Trustee, should the Trustee become a creditor of the Company, to obtain payment
of claims in certain cases, or to realize on certain property received in
respect of any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions with the Company; however, if the
Trustee acquires any conflicting interest, it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign. (Section 7.03)
The Holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. (Section 6.05) The Indenture provides that in case an Event
of Default shall occur (which shall not be cured), the Trustee will be required,
in the exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. (Section 7.01) Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any Holder of Notes, unless such Holder
shall have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense. (Section 7.01)
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BOOK-ENTRY DELIVERY AND FORM
The Old Notes were represented by a single global Note (the "Global Old
Note") in definitive fully registered form without coupons, registered in the
name of a nominee of DTC, as depositary. The Global Old Note, to the extent
directed by the holders thereof in their Letters of Transmittal, will be
exchanged through book-entry electronic transfer for a new single global New
Note in definitive fully registered form without coupons, registered in the name
of a nominee of DTC, as depositary (the "Global New Note" and collectively with
the Global Old Note, the "Global Notes" and each a "Global Note"). The Global
New Note will, upon request, be exchangeable for other New Notes in definitive
fully registered form without coupons, in denominations of $1,000 and integral
multiples thereof, but only upon ten days' prior written notice to the Trustee
given in accordance with DTC's customary procedures. The Global New Note will
also be exchangeable in certain other limited circumstances discussed below. The
Company, the Trustee and any agent thereof will be entitled to treat DTC's
nominee as the sole owner and holder of the unexchanged portion of the Global
Notes for all purposes.
In connection with the issuance of the Global New Note, DTC will credit
on its book-entry registration and transfer system the principal amount of the
Global New Note represented by New Notes deposited with it to the accounts of
institutions that have accounts with DTC or its nominee ("participants").
Ownership of beneficial interests in the Global New Note will be limited to
participants or persons that may hold beneficial interests through participants.
Ownership of beneficial interests in the Global New Note will be shown on, and
the transfer of those ownership interests will be effected only through, records
maintained by DTC (with respect to participants' interests) or such participants
(with respect to the owners of beneficial interests in the Global New Note).
So long as DTC or its nominee is the registered holder and owner of a
New Note representing the Global New Note, DTC or such nominee, as the case may
be, will be considered the sole owner and holder of the Global New Note for all
purposes of such New Notes and for all purposes under the Indenture. Unless DTC
notifies the Company that it is unwilling or unable to continue as depositary
for such Global New Note, DTC ceases to be a clearing agency registered under
the Exchange Act, the Company delivers to the Trustee a written notice that the
Global New Note shall be exchangeable or an Event of Default (as deemed in the
Indenture) or event that after notice or lapse of time, or both, would become an
Event of Default, has occurred and is continuing with respect to the New Notes,
owners of beneficial interests in the Global New Note will not be entitled to
have the New Notes represented by the Global New Note registered in their names,
will not receive or be entitled to receive physical delivery of certificated New
Notes in definitive form and will not be considered to be the owners or holders
of any New Notes under the Indenture or such Global New Note, except as
otherwise described herein.
Payments of the principal of, premium, if any, and interest (including
Liquidated Damages) on the Global Note will be made to DTC or its nominee, as
the case may be, as the registered owner thereof. All payments of principal of
(and premium, if any) and interest on the Global New Note held by DTC will be
made by the Company to DTC in immediately available funds, and in turn by DTC to
participants in clearing-house or next day funds. None of the Company, the
Trustee or 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 Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any
payment of principal of, premium, if any, and interest (including Liquidated
Damages) on the Global Note, will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Global Note as shown on the records of DTC or its nominee. The
Company also expects that payments by participants to owners of beneficial
interests in the Global Note held through such participants will be governed by
standing instructions and customary practice, as is now the case with securities
held for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
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Transfers between participants in DTC will be effected in the ordinary
way through DTC's settlement system in accordance with DTC rules and will be
settled in same day funds. If a holder requires physical delivery of a
Certificated Security for any reason, including to sell New Notes to persons in
states which require physical delivery of the Notes, or to pledge such
securities, such holder must transfer its interest in the Global Note, in
accordance with the normal procedures of DTC and with the procedures set forth
in the Indenture.
DTC has advised the Company that it will take any action permitted to
be taken by a holder of New Notes (including the presentation of New Notes for
exchange as described below) only at the direction of one or more participants
to whose account the DTC interests in the Global Note are credited and only in
respect of such portion of the aggregate principal amount of Notes as to which
such participant or participants has or have given such direction. However, if
there is an Event of Default under the Indenture, DTC will exchange the Global
Note for Certificated Securities, which it will distribute to its participants
and which will be legended as set forth under the heading "Notice to Investors."
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and certain other organizations. Indirect
access to the DTC system is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among participants of DTC,
it is under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Company nor the Trustee 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.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Company is party to the Registration Rights Agreement with Salomon
Brothers Inc and Chase Securities Inc., as the initial purchasers of the Old
Notes, pursuant to which the Company has agreed, for the benefit of the holders
of the Old Notes, to use its reasonable best efforts, at its cost, to file and
cause to become effective this Exchange Offer Registration Statement. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company will
offer to the Holders of Transfer Restricted Securities (as defined below) who
are able to make certain representations the opportunity to exchange their
Transfer Restricted Securities for New Notes in the Exchange Offer. If (i) the
Company is not permitted to consummate the Exchange Offer because the Exchange
Offer is not permitted by applicable law or Commission policy or (ii) any Holder
of Transfer Restricted Securities holding more than $5.0 million in aggregate
principal amount of Transfer Restricted Securities notifies the Company within
the specified time period (A) that it is prohibited by law or Commission policy
from participating in the Exchange Offer, (B) that it may not resell the New
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus (as amended or supplemented) contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales or (C) that it is a broker-dealer and owns Old Notes acquired directly
from the Company or an affiliate of the Company, the Company will file with the
Commission the Shelf Registration Statement to cover resales of the Old Notes by
the Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company
will use its reasonable best efforts to cause the applicable registration
statement to be declared effective as promptly as practicable by the Commission.
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The Indenture provides that the New Notes and the Old Notes will
constitute one class of securities for all purposes, will vote and consent
together on all matters as one class and will not have the right to vote or
consent as a separate class on any matter.
The Registration Rights Agreement provides that (i) the Company will
use its reasonable best efforts to file an Exchange Offer Registration Statement
with the Commission on or prior to May 4, 1998, (ii) Company will use its
reasonable best efforts to have the Exchange Offer Registration Statement
declared effective by the Commission on or prior to September 1, 1998, (iii)
unless the Exchange Offer would not be permitted by applicable law or Commission
policy, the Company will commence the Exchange Offer and use its reasonable best
efforts to issue on or prior to 30 business days after the date on which the
Exchange Offer Registration Statement was declared effective by the Commission,
New Notes in exchange for all Notes tendered prior thereto in the Exchange
Offer, (iv) if obligated to file the Shelf Registration Statement, the Company
will use its reasonable best efforts to file the Shelf Registration Statement
with the Commission on or prior to 60 days after such filing obligation arises
and use its reasonable best efforts to cause the Shelf Registration to be
declared effective by the Commission on or prior to 180 days after such
obligation arises and (v) (A) in certain circumstances and with certain
exceptions, cause the Exchange Offer Registration Statement to remain effective
and usable for a period of 90 days following the consummation of the Exchange
Offer and (B) with certain exceptions, cause the Shelf Registration Statement to
remain effective and usable for a period of two years following the initial
effectiveness thereof or such shorter period ending when all the Notes available
for sale thereunder have been sold or are eligible for sale pursuant to Rule
144(k) under the Securities Act (or any successor provision). If (a) the Company
fails to file any of the Registration Statements required by the Registration
Rights Agreement on or before the date specified for such filing, (b) any of
such Registration Statements is not declared effective by the Commission on or
prior to the date specified for such effectiveness, (c) the Company fails to
consummate the Exchange Offer within 30 business days after the date on which
the Exchange Offer Registration Statement is declared effective, or (d) the
Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable in connection
with resales of Transfer Restricted Securities during the periods specified in
the Registration Rights Agreement (each such event referred to in clauses (a)
through (d) above as a "Registration Default"), then the Company will pay to
each Holder of Notes affected thereby, with respect to the first 90-day period
immediately following the occurrence of such Registration Default in an amount
equal to $.05 per week per $1,000 principal amount of Notes held by such Holder
("Liquidated Damages"). The amount of the Liquidated Damages will increase by an
additional $.05 per week per $1,000 principal amount of Notes affected thereby
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $.20 per week
per $1,000 principal amount of Notes affected thereby. All accrued Liquidated
Damages will be paid by the Company on each Damages Payment Date, in the same
manner that payments of interest on the Notes are made. Following the cure of
all Registration Defaults, the accrual of Liquidated Damages will cease.
See "The Exchange Offer."
The summary herein 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, all the provisions of the Registration Rights
Agreement filed as an exhibit hereto.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided. For purposes of making any determination of any amount under any
single definition set forth below, such determination shall be made without
double counting of any item; provided that, with respect to the definition of
"Fixed Charge Coverage Ratio" it shall not be deemed to be double counting if an
item is included in the calculation of each of "Consolidated EBITDA" and "Fixed
Charges."
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"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merges
with or into or becomes a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
by the Company or any of its Restricted Subsidiaries of any assets (including,
without limitation, by way of a sale and leaseback) other than in the ordinary
course of business (provided, that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provision of
the Indenture described above under the caption "Certain Covenants--Merger,
Consolidation or Sale of Assets" and not by the provisions of the "Asset Sales"
covenant), and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries
(other than directors' qualifying shares), in the case of clauses (i) and (ii),
whether in a single transaction or a series of related transactions, (a) that
have a fair market value in excess of $5.0 million or (b) for Net Proceeds in
excess of $5.0 million. Notwithstanding the foregoing: (i) a transfer of assets
by the Company to a Restricted Subsidiary, by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary or a Holding Company Restructuring;
(ii) an issuance of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary; (iii) a Restricted Payment that is
permitted by the covenant described above under the covenant entitled
"Restricted Payments"; (iv) the sale and leaseback of any assets within 90 days
of the acquisition of such assets; (v) a sale of Receivables and Related Assets
to or by a Securitization Subsidiary in connection with a Permitted Receivables
Financing; (vi) any disposition of property in the ordinary course of business
by the Company or any of its Restricted Subsidiaries that, in the good faith
judgment of management of the Company, has become obsolete or worn out; (vii)
any disposition of inventory in the ordinary course of business; (viii) any
exchange by the Company or any Restricted Subsidiary of assets for assets of
another Person (provided, that (A) all or substantially all of the property
received by the Company or any Restricted Subsidiary in such exchange is of a
type used in a Related Business (or constitutes Capital Stock of a Person
engaged in a Related Business or cash), (B) no Default or Event of Default shall
have occurred and be continuing as a result of such exchange, (C) a majority of
the Board of Directors of the Company shall have determined in their good faith
judgment that such exchange is fair to the Company or the applicable Restricted
Subsidiary, as the case may be, (D) in the event the Company or a Restricted
Subsidiary, as the case may be, receives any Capital Stock of a Person pursuant
to such exchange, if such Person does not become a Restricted Subsidiary of the
Company by virtue of such exchange, then such exchange shall be deemed to be a
Restricted Payment by the Company reducing the Restricted Payments basket under
clause (c) of the first paragraph under the "Restricted Payments" covenant
above, and (E) in the event the Company or a Restricted Subsidiary, as the case
may be, receives cash pursuant to such exchange, such cash received shall be
applied in the manner applicable to Net Proceeds from Asset Sales pursuant to
the "Asset Sales" covenant); and (ix) any loans or other transfers of equipment
to customers of the Company for use with the Company's disposable medical
products, provided, that the fair market value of any such equipment loaned or
otherwise transferred to any one customer in any one year shall not exceed $5.0
million in the aggregate; and (xii) the sale or issuance of a minimal number of
any Foreign Subsidiary's Equity Interests to a foreign national to the extent
required by local law or in a jurisdiction outside of the United States, will
not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and
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leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means, (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any similar participation in
profits and losses or equity of a Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any commercial bank or trust company
having capital and surplus in excess of $300 million, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. ("S&P"), and in each case maturing
within one year after the date of acquisition, (vi) investment funds investing
95% of their assets in securities of the types described in clauses (i) through
(v) above, (vii) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision thereof having one of
the two highest rating categories obtainable from either Moody's or S&P and
(vii) Indebtedness with a rating of "A" or higher from S&P or "A2" or higher
from Moody's.
"Change of Control" means the occurrence of any of the following: (i)
any sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation) in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as defined in Section 13(d) of the Exchange Act) or
"group" (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act); (ii)
the adoption of a plan for the liquidation or dissolution of the Company; (iii)
the Company consolidates with, or merges with or into, another "person" (as
defined above) or "group" (as defined above), in a transaction or series of
related transactions in which the Voting Stock of the Company is converted into
or exchanged for cash, securities or other property, other than a Holding
Company Restructuring or any transaction where (A) the outstanding Voting Stock
of the Company is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation and (B) either
(1) the "beneficial owners" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of the outstanding Voting Stock of the Company immediately prior
to such transaction own beneficially, directly or indirectly through one or more
Subsidiaries, not less than a majority of the total outstanding Voting Stock of
the surviving or transferee corporation immediately after such transaction or
(2) if, immediately prior to such transaction the Company is a direct or
indirect Subsidiary of any other Person (each such other Person, the "Holding
Company"), the "beneficial owners" (as defined above) of the outstanding Voting
Stock of such Holding Company immediately prior to such transaction own
beneficially, directly or indirectly through one or more Subsidiaries, not less
than a majority of the outstanding Voting Stock of the surviving or transferee
corporation immediately after such transaction; (iv) the consummation of any
transaction or series of any related transactions (including, without
limitation, by way of merger or consolidation) the result of which is that any
"person" (as defined above) or "group" (as defined above), becomes the
"beneficial owner" (as defined above) of more than 50% of the voting power of
the Voting Stock of the Company; or (v) during any consecutive two-year period,
the first day on which a majority of the members of the Board of Directors of
the Company who were members of the Board of Directors at the beginning of such
period are not Continuing Directors.
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"Consolidated EBITDA" means, with respect to any Person for any period,
the Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, plus, to the extent deducted in computing Consolidated Net Income,
(i) the provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, (ii) Consolidated Interest Expense of
such Person for such period, (iii) depreciation and amortization (including
amortization of goodwill, organization costs, covenants not to compete and other
intangibles) and all other non-cash charges (excluding any such non-cash charge
to the extent that it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period,
and (iv) the effect of any write-up of inventory balances of such Person and its
Restricted Subsidiaries in connection with an acquisition accounted for as a
purchase transaction, in each case, on a consolidated basis determined in
accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
based on the income or profits, the Consolidated Interest Expense and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of a Person shall be added to Consolidated Net Income to compute
Consolidated EBITDA only to the extent (and in the same proportion) that the Net
Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the interest expense of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP
(including amortization of original issue discount, non-cash interest payments,
the interest component of all payments associated with Capital Lease
Obligations, net payments, if any, pursuant to Hedging Obligations and imputed
interest with respect to Attributable Debt and excluding amortization of
deferred financing costs).
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid to the referent Person or a Restricted
Subsidiary thereof in cash, (ii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be included, (iii) the cumulative effect of a change in
accounting principles shall be excluded, (iv) the portion of net income of the
Company and its Consolidated Subsidiaries allocable to investments in
unconsolidated Persons to the extent that cash dividends or distributions have
not actually been received by the Company or one of its Consolidated
Subsidiaries shall be excluded until such cash is received and (v) the Net
Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of Net Income is not, at the date of determination, permitted without
any prior governmental approval (which has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement (other
than any Credit Agreement), instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the relevant Person who (i) was a member of
such Board of Directors on the date of the Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.
"Credit Agreement" means the Credit Facility and one or more borrowing
arrangements to be entered into by and between the Company and/or one or more of
its Subsidiaries and a commercial bank or other institutional lender, including
any related notes, security documentation, guarantees, letters of credit,
collateral documents, instruments and agreements executed in connection
therewith, including any appendices, exhibits or schedules to any of the
foregoing, and in each case as such agreements may be amended, modified,
supplemented or restated from time to time, or refunded, refinanced,
restructured, replaced, renewed, repaid or extended from time to time (whether
with the original agents and lenders or other agents or lenders or otherwise,
and whether provided under the original credit agreement or credit agreements
and whether for the same or a different amount or otherwise) on one or more
occasions.
"Credit Facility" means that certain credit agreement, providing for up
to $450 million aggregate principal amount of borrowings, dated as of December
29, 1997 and as amended through the date of the Indenture, by and among
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the Company, certain Subsidiaries, the several lenders party thereto, Chase
Securities Inc., as arranger and syndication agent, Salomon Brothers Holding
Company, Inc, as documentation agent, and The Chase Manhattan Bank, as
administrative agent, and any related notes, security documentation, guarantees,
letters of credit, collateral documents, instruments and agreements executed in
connection therewith, including any appendices, exhibits or schedules to any of
the foregoing, and in each case as such agreements may be amended, modified,
supplemented or restated from time to time, or refunded, refinanced,
restructured, replaced, renewed, repaid or extended from time to time (whether
with the original agents and lenders or other agents or lenders or otherwise,
and whether provided under the original credit agreement or credit agreements
and whether for the same or different amount or otherwise) on one or more
occasions.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Designated Senior Debt" means (i) so long as any Indebtedness is
outstanding under the Credit Facility, such Indebtedness and (ii) any other
Senior Debt permitted under the Indenture the principal amount of which is $25.0
million or more and that has been designated by the Company as "Designated
Senior Debt."
"Disqualified Stock" means that portion of any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event (other than an
event which would constitute a Change of Control), matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control) on or prior to the final maturity
date of the Notes.
"Equity Interests" means Capital Stock and all warrants, options or
other rights (including rights under a shareholder rights plan) to acquire
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Facility) in
existence on the date of the Indenture until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (i) the Consolidated Interest Expense of such Person for such period and
(ii) any interest expense on Indebtedness of another Person that is (A)
guaranteed by the referent Person or one of its Restricted Subsidiaries (whether
or not such guarantee is called upon) (other than guarantees permitted under
clause (xvi) of the second paragraph under the "Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock" covenant) or (B) secured by
a Lien on assets of such Person or one of its Restricted Subsidiaries (whether
or not such Lien is called upon); provided that with respect to clause (ii)(B),
the amount of Indebtedness (and attributable interest expense) shall be equal to
the lesser of (I) the principal amount of the Indebtedness secured by the assets
of such Person or one of its Restricted Subsidiaries and (II) the fair market
value (as determined by the Board of Directors of such Person and set forth in
an Officer's Certificate delivered to the Trustee) of the assets securing such
Indebtedness and (iii) the product of (a) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Restricted
Subsidiary) on any series of preferred stock of such Person, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated EBITDA of such Person and its Restricted
Subsidiaries for such period to the Fixed Charges of such Person and its
Restricted Subsidiaries for such period. In the event that the Company or any of
its Restricted Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated, but on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to
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such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. For purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and shall give pro forma effect to the
Indebtedness and the Consolidated EBITDA of the Person which is the subject of
any such acquisition, (ii) the Consolidated EBITDA attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, (iii) Consolidated
Interest Expense attributable to interest on any Indebtedness (whether existing
or being incurred) computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period, (iv) pro forma effect shall be given
to Asset Sales and asset acquisitions (including giving pro forma effect to the
application of the proceeds of any Asset Sale) that occur during such period or
thereafter and on or prior to the Calculation Date as if they had occurred and
such proceeds had been applied on the first day of such period, and (v) pro
forma effect shall be given to Asset Sales and asset acquisitions (including
giving pro forma effect to the application of proceeds of any Asset Sale and any
related financing in connection with any asset acquisition) that have been made
by any Person that has become a Restricted Subsidiary or has been merged with or
into the Company or any Restricted Subsidiary during such four-quarter reference
period or subsequent to such period and prior to the Calculation Date and that
would have constituted Asset Sales or acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such Asset Sales or
asset acquisitions were Asset Sales or asset acquisitions that occurred on the
first day of such period as if they had occurred on the first day of such
period.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
organized and existing under the laws of any jurisdiction outside of the United
States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Committee on Auditing Procedures and the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, the Securities and Exchange Commission or in such other
opinions, pronouncements or statements by such other entities, including
practice within the profession, as may be approved or followed by a significant
segment of the accounting profession of the United States, which are in effect
or followed from time to time. All determinations (including all ratios and
computations) based on GAAP contained in the Indenture shall be computed in
conformity with GAAP as in effect on December 31, 1997.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof, but excluding contractual indemnity
obligations, of all or any part of any Indebtedness), in accordance with GAAP.
"Guarantor" means each of (i) the Subsidiaries of the Company (other
than Foreign Subsidiaries, Immaterial Subsidiaries and Securitization
Subsidiaries) in existence on the date of the Indenture and (ii) any future
Restricted Subsidiary (other than Foreign Subsidiaries, Immaterial Subsidiaries
and Securitization Subsidiaries), and their respective successors and assigns.
The Guarantors at the date of this Prospectus are Aspen Laboratories, Inc.,
Consolidated Medical Equipment International, Inc., CONMED Andover Medical Inc.,
Envision Medical Corporation, Linvatec Corporation and NDM, Inc.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) other agreements
or arrangements designed to protect such Person against fluctuations in interest
rates or foreign exchange rates and
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(iii) indemnity agreements and arrangements entered into in connection with the
agreements and arrangements described in clauses (i) and (ii).
"Holding Company Restructuring" means any merger, consolidation or
similar transaction (including a share exchange under state law) or series of
mergers, consolidations or similar transactions (including share exchanges
pursuant to state law) involving the Company, its Restricted Subsidiaries and/or
any other "person" (as defined in Section 13(d) of the Exchange Act) consummated
principally for the purpose of reorganizing the Company's operations under a
holding company structure where (a) the outstanding Voting Stock of the Company
is converted into or exchanged for Voting Stock (other than Disqualified Stock)
of the surviving or transferee corporation (the "New Holding Company");
provided, that the "beneficial owners" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) of the outstanding Voting Stock of the Company
immediately prior to such transaction(s) own beneficially, directly or
indirectly through one or more "persons" (as defined above), all of the total
outstanding Voting Stock of the New Holding Company immediately after such
transaction and (b) the Guarantee of each Subsidiary of the Company that becomes
a Subsidiary of the New Holding Company as a result of such transaction shall
not be terminated in connection with such transaction.
"Immaterial Subsidiary" means any Restricted Subsidiary designated by
the Company as an Immaterial Subsidiary and which would not be a "significant
subsidiary" under Rule 1-02(w) of Regulation S-X, substituting all references in
such Rule to 10% with 5%, provided, that the Company may not designate any
Restricted Subsidiary as an Immaterial Subsidiary if, giving effect to such
designation, the combined total assets (determined in accordance with GAAP) of
the Company and the Guarantors would represent less than 80% of the combined
total assets (determined in accordance with GAAP) of the Company and the
Restricted Subsidiaries (excluding Foreign Subsidiaries). Any Immaterial
Subsidiary which subsequent to its designation as such ceases to meet the
foregoing criteria shall thereupon cease to be an Immaterial Subsidiary and
shall become a Guarantor.
"Incur" or "incur" means, with respect to any Indebtedness (including
Acquired Debt or Disqualified Stock), to create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable for or with respect to, or
become responsible for, the payment of such Indebtedness (including Acquired
Debt or Disqualified Stock); provided that (i) neither the accrual of interest
nor the accretion of original issue discount shall be considered an incurrence
of Indebtedness and (ii) the assumption of Indebtedness by the surviving entity
of a transaction permitted by the last sentence of the second paragraph under
"Subsidiary Guarantees" or the last sentence of the covenant entitled "Merger,
Consolidation or Sale of Assets" in existence at the time of such transaction
shall not be deemed to be an incurrence of Indebtedness. The term "incurrence"
has a corresponding meaning.
"Indebtedness" means, with respect to any Person without duplication,
(a) any indebtedness of such Person, whether or not contingent (but excluding
contractual indemnity obligations), in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing Capital Lease
Obligations or the deferred and unpaid balance of the purchase price of any
property, except Indebtedness shall not include any such balance that
constitutes an accrued expense or trade payable, or representing any Hedging
Obligations if and to the extent any of the foregoing indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, (b) all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and (c) the maximum fixed
repurchase price of Disqualified Stock issued by such Person, in each case if
held by any Person other than the Company or a Restricted Subsidiary of the
Company, and, to the extent not otherwise included, the guarantee by such Person
of any such indebtedness of any other Person.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including Guarantees), advances or capital contributions (excluding loans to
directors, officers or employees (but not any forgiveness thereof) and
commissions, travel and similar advances to directors, officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP; provided that an acquisition of assets, Equity
Interests or other
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securities by the Company for consideration consisting of common equity
securities of the Company shall not be deemed to be an Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company, or any Restricted Subsidiary of the Company issues Equity Interests,
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an investment on the date of any such sale, disposition or issuance
equal to the fair market value of the Equity Interests of such Person held by
the Company or such Restricted Subsidiary immediately following any such sale,
disposition or issuance.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest).
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, (i) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries, and (ii) any extraordinary, unusual or nonrecurring gain, charge,
expense or loss, together with any related provision for taxes on such
extraordinary, unusual or nonrecurring gain, charge, expense or loss.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, amounts required to be applied to the repayment of Indebtedness
(other than long-term Indebtedness of a Restricted Subsidiary of such Person and
Indebtedness under the Credit Facility) secured by a Lien on the asset or assets
that are the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Debt" means Indebtedness (i) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (ii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, guarantees and other liabilities
payable under the documentation governing any Indebtedness, in each case whether
now or hereafter existing, renewed or restructured, whether or not from time to
time decreased or extinguished and later increased, created or incurred, whether
or not arising on or after the commencement of a proceeding under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
"Pari Passu Indebtedness" means Indebtedness of the Company which ranks
pari passu in right of payment with the Notes.
"Permitted Investments" means (i) Investments in the Company or in a
Restricted Subsidiary of the Company (including, without limitation, guarantees
of the Indebtedness and/or other Obligations of the Company and/or any
Restricted Subsidiary of the Company, so long as such Indebtedness and/or other
Obligations are permitted under the Indenture); (ii) Investments in Cash
Equivalents; (iii) Investments by the Company or any Restricted Subsidiary of
the Company in, or the purchase of the securities of, a Person if, as a result
of such Investment, (a) such Person becomes a Restricted Subsidiary of the
Company or (b) such Person is merged, consolidated or amalgamated with or into,
or
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transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company; (iv) Investments in
accounts and notes receivable acquired in the ordinary course of business; (v)
any non-cash consideration received in connection with an Asset Sale that
complies with the covenant entitled "Asset Sales"; (vi) Investments in
connection with Hedging Obligations permitted to be incurred under the covenant
entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock"; (vii) Investments outstanding on the date of the Indenture;
(viii) Investments not to exceed $25.0 million at any one time; (ix) in the
event the Company or any Restricted Subsidiary maintains any unfunded deferred
compensation plan (within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, as amended), to the extent benefits under such plan
are defined by reference to specific investments, whether at the participant's
or the beneficiaries' election or otherwise, any Investment in such a specific
investment; (x) extensions of trade credit in the ordinary course of business;
(xi) investments (including debt obligations and Equity Interests) by the
Company or any Restricted Subsidiary received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business; and (xii) guarantees (other than those referred to
in clause (i) above) permitted to be incurred by the Company or any Restricted
Subsidiary pursuant to the covenant entitled "Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock."
"Permitted Junior Securities" shall mean debt or equity securities of
the Company or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Company that are subordinate to the
payment of all then outstanding Senior Debt at least to the same extent that the
Notes are subordinated to the payment of all Senior Debt on the Closing Date, so
long as (i) the effect of the use of this defined term in the subordination
provisions described under the caption "Subordination" is not to cause the Notes
to be treated as part of (a) the same class of claims as the Senior Debt or (b)
any class of claims pari passu with, or senior to, the Senior Debt for any
payment or distribution in any case or proceeding or similar event relating to
the liquidation, insolvency, bankruptcy, dissolution, winding up or
reorganization of the Company and (ii) to the extent that any Senior Debt
outstanding on the date of consummation of any such plan of reorganization or
readjustment is not paid in full in cash on such date, either (a) the holders of
any such Senior Debt not so paid in full in cash have consented to the terms of
such plan of reorganization or readjustment or (b) such holders receive
securities which constitute Senior Debt and which have been determined by the
relevant court to constitute satisfaction in full in money or money's worth of
any Senior Debt not paid in full in cash.
"Permitted Liens" means (i) Liens on property of the Company and any
Restricted Subsidiary securing (a) Senior Debt and/or (b) Hedging Obligations
permitted to be incurred under the Indenture at the time incurred pursuant to
the covenant described above under the covenant entitled "Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; (ii) Liens
in favor of the Company or any of its Restricted Subsidiaries; (iii) Liens on
property of a Person existing at the time such Person is merged with or into or
consolidated with the Company or any Restricted Subsidiary of the Company;
provided, that such Liens were not incurred in connection with, or in
contemplation of, such merger or consolidation and do not extend to any assets
of the Company or any Restricted Subsidiary of the Company other than the assets
acquired in such merger or consolidation; (iv) Liens on property of a Person
existing at the time such Person becomes a Restricted Subsidiary of the Company;
provided that such Liens were not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and do not extend
to any assets of the Company or any other Restricted Subsidiary of the Company;
(v) Liens on property existing at the time of acquisition thereof by the Company
or any Restricted Subsidiary of the Company; provided that such Liens were not
incurred in connection with, or in contemplation of, such acquisition and do not
extend to any assets of the Company or any of its Restricted Subsidiaries other
than the property so acquired; (vi) Liens imposed by law, including Liens to
secure the performance of statutory obligations, surety or appeal bonds or
performance bonds, or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's, or other like Liens, in any case incurred in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate process of law, if a reserve or
other appropriate provision, if any, as is required by GAAP shall have been made
therefor; (vii) Liens existing on the date of the Indenture; (viii) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure surety or appeal
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bonds to which such Person is a party, or deposits as security for contested
taxes or import duties or for the payment of rent, in each case incurred in the
ordinary course of business; provided that any reserve or other appropriate
provision as required in conformity with GAAP shall have been made therefor;
(ix) Liens for property taxes not yet subject to penalties for non-payment or
which are being contested in good faith and by appropriate proceedings; provided
that any reserve or other appropriate provision as required in conformity with
GAAP shall have been made therefor; (x) Liens in favor of issuers of surety
bonds or commercial letters of credit issued pursuant to the request of and for
the account of such Person in the ordinary course of its business which encumber
documents and other property or assets relating to such letters of credit and
products and proceeds therefor; (xi) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of others for licenses,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real property
or Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not incurred in connection with
Indebtedness and which do not in the aggregate materially impair their use in
the operation of the business of such Person; (xii) Liens securing Indebtedness
incurred to finance the construction, purchase or lease of, or repairs,
improvements or additions to, inventory or other property of such Person;
provided that the Lien may not extend to any other property owned by such Person
or any of its Subsidiaries at the time the Lien is incurred; (xiii) Liens on
Receivables and Related Assets to reflect sales of Receivables and Related
Assets to and by a Securitization Subsidiary pursuant to a Permitted Receivables
Financing or securing Indebtedness permitted by paragraph (xiii) of the covenant
entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock"; (xiv) Liens securing Indebtedness represented by any
industrial revenue bonds, pollution control bonds or other tax exempt financing;
provided, that the aggregate amount of any Indebtedness to which such Liens
relate at any one time outstanding shall not exceed $10.0 million; (xv) Liens to
secure (A) Indebtedness (including Capital Lease Obligations) permitted by
clause (iv) of the second paragraph of the covenant entitled "Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock" covering
only the assets acquired with such Indebtedness or the assets which are the
subject of the sale leaseback transaction, as the case may be, and (B)
Indebtedness of any Restricted Subsidiary (other than a Guarantor) permitted to
be incurred by such Restricted Subsidiary pursuant to the covenant entitled
"Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock"; (xvi) Liens incurred by the Company or any Restricted Subsidiary of the
Company with respect to obligations not constituting Indebtedness for borrowed
money that do not exceed $10.0 million in the aggregate at any one time
outstanding; (xvii) Liens securing Indebtedness incurred to refinance
Indebtedness that has been secured by a Lien permitted under the Indenture;
provided that (a) any such Lien shall not extend to or cover any assets or
property not securing the Indebtedness so refinanced and (b) the refinancing
Indebtedness secured by such Lien shall have been permitted to be incurred under
the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock"; (xviii) Liens in favor of the lessee on instruments
which are the subject of leases entered into in the ordinary course of business;
provided that any such Lien shall not extend to or cover any assets or property
of the Company and its Restricted Subsidiaries that is not the subject of any
such lease; (xix) Liens to secure Attributable Debt and/or that are permitted to
be incurred pursuant to the covenant entitled "Sale and Leaseback Transactions";
provided that any such Lien shall not extend to or cover any assets of the
Company or any Guarantor other than the assets which are the subject of the sale
leaseback transaction in which the Attributable Debt is incurred; and (xx) Liens
to secure other Indebtedness; provided, that the aggregate amount of any
Indebtedness to which such Liens relate at any one time outstanding shall not
exceed $15.0 million.
"Permitted Receivables Financing" means a transaction or series of
transactions (including amendments, supplements, extensions, renewals,
replacements, refinancings or modifications thereof) pursuant to which a
Securitization Subsidiary purchases Receivables and Related Assets from the
Company or any Restricted Subsidiary and finances such Receivables and Related
Assets or a fractional undivided interest in the Receivables and Related Assets;
provided that (i) the Board of Directors shall have determined in good faith
that such Permitted Receivables Financing is economically fair and reasonable to
the Company and the Securitization Subsidiary, (ii) all sales of Receivables and
Related Assets to or by the Securitization Subsidiary are made at fair market
value (as determined in good faith by the Board of Directors), (iii) the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the Board of Directors),
(iv) no portion of the Indebtedness of a Securitization Subsidiary is guaranteed
by or is recourse to the Company or any Restricted Subsidiary (other than
recourse for customary representations, warranties, covenants and indemnities,
none of which shall relate to the
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collectibility of the Receivables and Related Assets) and (v) neither the
Company nor any Subsidiary has any obligation to maintain or preserve the
Securitization Subsidiary's financial condition.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defeasance or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount of such Permitted Refinancing
Indebtedness does not exceed the principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of premiums, accrued interest and reasonable fees and expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes and has a final maturity date that is later than the final
maturity of the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable in the aggregate
to the Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iv) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded ranks pari passu in right of payment with the
Notes and has a final maturity date that is later than the final maturity of the
Notes, such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and ranks pari passu with, or is subordinated
in right of payment to, the Notes on terms at least as favorable in the
aggregate to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (v) if such Indebtedness is incurred by the Company,
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded may not be a Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Receivables and Related Assets" means accounts receivable and
instruments, chattel paper, obligations, general intangibles and other similar
assets, in each case, relating to such receivables, including interests in
merchandise or goods, the sale or lease of which gave rise to such receivables,
related contractual rights, guarantees, insurance proceeds, collections, other
related assets and proceeds of all of the foregoing.
"Related Business" means a business the majority of whose revenues
result from the manufacturing, distribution or sale of medical products and
equipment or any business reasonably related or incident thereto.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means (i) any Subsidiary of the referent Person
that is not an Unrestricted Subsidiary or (ii) any Subsidiary of a New Holding
Company so long as the Holding Company is a Guarantor.
"Securitization Subsidiary" means any Subsidiary created for the
limited purpose of acquiring and financing Receivables and Related Assets and
engaging in activities ancillary thereto, so long as it: (a) has no Indebtedness
other than Non-Recourse Debt and (b) is a Person with respect to which neither
the Company nor any of its other Subsidiaries has any direct obligation to
maintain or preserve such Person's financial condition. If, at any time, such
Securitization Subsidiary would fail to meet the foregoing requirements as a
Securitization Subsidiary, it shall thereafter cease to be a Securitization
Subsidiary for purposes of the Indenture and any Indebtedness of such
Securitization Subsidiary shall be deemed to be incurred by a Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption "--
Certain Covenants--Incurrence of Indebtedness and Issuance of Disqualified Stock
and Preferred Stock," the Company shall be in default of such covenant).
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"Senior Debt" means, (a) with respect to the Company, (i) all
Obligations under or in respect of the Credit Facility permitted to be incurred
under the Indenture at the time incurred pursuant to the covenant described
above under the caption "-- Certain Covenants--Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock" and (ii) any other
Indebtedness permitted to be incurred by the Company under the terms of the
Indenture and any Hedging Obligation permitted to be incurred under the terms of
the Indenture, unless the instrument under which the foregoing is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes, and (b) with respect to any Guarantor, (i) all Obligations
under or in respect of the Credit Facility permitted to be incurred under the
Indenture at the time incurred pursuant to the covenant described above under
the caption "-- Certain Covenants--Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock" and (ii) any other Indebtedness
permitted to be incurred by such Guarantor under the terms of the Indenture and
any Hedging Obligation permitted to be incurred under the terms of the
Indenture, unless the instrument under which the foregoing is incurred expressly
provides that such Indebtedness is on parity with or subordinated in right of
payment to the Guarantee of such Guarantor. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (w) any liability for
federal, state, local or other taxes, (x) any Indebtedness of the Company or any
Guarantor to the Company or any Subsidiary of the Company or any of their
respective Affiliates, (y) any trade payables, or (z) any Indebtedness of the
type described in clauses (a) (ii) and (b) (ii) of the preceding sentence that
is incurred in violation of the Indenture, provided, that this clause (z) shall
not be read to negate the requirement in clauses (a) (i) and (b) (i) of the
preceding sentence that Obligations under or in respect of the Credit Facility
be permitted at the time incurred under the "Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock" covenant.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of the Indenture.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of Voting Stock is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (b) the only general partners of which are such Person or one
or more Subsidiaries of such Person (or any combination thereof).
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to
a Board Resolution, but only to the extent that such Subsidiary: (i) has no
Indebtedness other than Non-Recourse Debt; (ii) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company relating to a transaction or series of related
transactions having a transaction value in excess of $2.0 million, unless the
terms of any such agreement, contract, arrangement or understanding are, in the
good faith judgment of the Board of Directors of the Company, no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company; (iii) is a
Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by the covenant described above under the covenant
entitled "Restricted Payments." If, at any time, any Unrestricted Subsidiary
would fail to meet
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the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of the Indenture and
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under the covenant entitled "Incurrence
of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," the
Company shall be in default of such covenant from the date of such incurrence).
The Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock" and (ii) no Default or Event of Default would be in
existence following such designation.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the total of the
product obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
numbers of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences applicable to the exchange of Old Notes for New Notes pursuant to
the Exchange Offer (the "Exchange") and the ownership and disposition of New
Notes. This summary deals only with New Notes held as capital assets by holders
who purchased Old Notes at 100% of their principal amount, and not with special
classes of holders, such as dealers in securities or currencies, banks,
tax-exempt organizations, life insurance companies, persons that hold New Notes
as a hedge (or hedged against) currency or interest rate risks or that are part
of a straddle or conversion transaction, or persons whose functional currency is
not the U.S. dollar. Investors who purchased the Old Notes at a price other than
100% of their principal amount should consult their tax advisor as to the
possible applicability to them of the amortizable bond premium or market
discount rules. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), its legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, all as currently in effect
and all subject to change at any time, perhaps with retroactive effect.
HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
CONSEQUENCES, IN THEIR PARTICULAR CIRCUMSTANCES, UNDER THE CODE AND THE LAWS OF
ANY OTHER TAXING JURISDICTION, OF THE EXCHANGE AND OWNERSHIP OF NEW NOTES.
For United States federal income tax purposes, the Exchange will be
disregarded and each New Note will be treated as a continuation of the
corresponding Old Note. Accordingly, holders will not recognize gain or loss
upon the Exchange. For purposes of determining gain or loss upon the subsequent
sale or exchange of the New Notes, a holder's basis in the New Notes should be
the same as such holder's basis in the Old Notes exchanged therefor. Holders
should be considered to have held the New Notes from the time of their original
acquisition of the Old Notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale for a period of 90 days from the date of this Prospectus,
or shorter period as will terminate when all Old Notes acquired by
broker-dealers for their own accounts as a result of market-making activities or
other trading activities have been exchanged for New Notes and resold by such
broker-dealers.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days from the date of this Prospectus, or such
shorter period as will terminate when all Old Notes acquired by broker-dealers
for their own accounts as a result of market-making activities or other trading
activities have been exchanged for New Notes and resold by such broker-dealers,
the Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to indemnify
such broker-dealers against certain liabilities, including liabilities under the
Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that receives
New Notes pursuant to the Exchange Offer agrees that, upon receipt of notice
from the Company of the happening of any event which makes any statement in this
Prospectus untrue in any material respect or which requires the making of any
changes in this Prospectus in order to make the statements herein not
misleading, such broker-dealer will suspend use of this Prospectus until the
Company has amended or supplemented this Prospectus to correct such misstatement
or omission and has furnished copies of the amended or supplemented Prospectus
to such broker-dealer.
VALIDITY OF NEW NOTES AND GUARANTEES
The validity of the New Notes offered hereby and the related guarantees
will be passed upon for the Company by Joseph J. Corasanti, General Counsel for
the Company. Sullivan & Cromwell, New York, New York, special counsel to the
Company, is representing the Company in connection with the Exchange Offer.
EXPERTS
The consolidated financial statements of CONMED Corporation as of
December 31, 1997 and December 31, 1996 and for each of the years in the
three-year period ended December 31, 1997, incorporated by reference in this
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Prospectus, have been so included on the reliance on the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in accounting and auditing.
The Statement of Net Assets Acquired and Liabilities Assumed of the
Linvatec Business Unit (a division of Zimmer, Inc., a wholly-owned subsidiary of
Bristol-Myers Squibb Company) as of December 31, 1997 and December 31, 1996 and
the Statement of Net Sales and Direct Operating Expenses of the Linvatec
Business Unit for each of the years in the three-year period ended December 31,
1997, incorporated by reference in this Prospectus, have been so included on the
reliance on the reports of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 722 of the New York Business Corporation Law (the "New York
Law") provides that a corporation may indemnify an officer or director, in the
case of third party actions, against judgments, fines, amounts paid in
settlement and reasonable expenses and, in the case of derivative actions,
against amounts paid in settlement and reasonable expenses, if the director or
officer "acted, in good faith, for a purpose which he reasonably believed to be
in . . . the best interests of the corporation" and, in the case of criminal
actions, "had no reasonable cause to believe that his conduct was unlawful."
Statutory indemnification may not be provided in derivative actions in respect
of a threatened action, or a pending action which is settled or otherwise
disposed of, or any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation, unless and only to the extent
that the court in which the action was brought, or, if no action was brought,
any court of competent jurisdiction, determines upon application that, in view
of all of the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement and expenses as the
court deems proper.
As contemplated by New York Law Section 721, the Company's Bylaws, as
amended on December 26, 1990, provide a broader basis for indemnification in
accordance with and as permitted by New York Law Article 7.
Section 6.6 of the Bylaws of the Company provides as follows:
Section 6.6 Indemnification. The Corporation shall indemnify
each person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such
person or such person's testator or intestate is or was a director or
officer of the Corporation, or serves or served at the request of the
Corporation, any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against
judgments, fines, penalties, amounts paid in settlement and reasonable
expenses, including attorneys' fees, incurred in connection with such
action or proceeding, or any appeal therein, provided that no such
indemnification shall be made if a judgment or other final adjudication
adverse to such person establishes that his or her acts were committed
in bad faith or were the result of active and deliberate dishonesty and
were material to the cause of action so adjudicated, or that he or she
personally gained in fact a financial profit or other advantage to
which he or she was not legally entitled, and provided further that no
such indemnification shall be required with respect to any settlement
or other nonadjudicated disposition of any threatened or pending action
or proceeding unless the Corporation has given its prior consent to
such settlement or other disposition.
The Corporation may advance or promptly reimburse upon request
any person entitled to indemnification hereunder for all expenses,
including attorneys' fees, reasonably incurred in defending any action
or proceeding in advance of the final disposition thereof upon receipt
of an undertaking by or on behalf of such person to repay such amount
if such person is ultimately found not to be entitled to
indemnification or, where indemnification is granted, to the extent the
expenses so advanced or reimbursed exceed the amount to which such
person is entitled, provided, however, that such person shall cooperate
in good faith with any request by the Corporation that common counsel
be utilized by the parties to an action or proceeding who are similarly
situation unless to do so would be inappropriate due to actual or
potential differing interests between or among such parties.
Anything in these bylaws to the contrary notwithstanding, no
elimination of this bylaw, and no amendment of this bylaw adversely
affecting the right of any person to indemnification or advancement of
expenses hereunder shall be effective until the 60th day following
notice to such person of such action, and
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no elimination of or amendment to this bylaw shall deprive any person
of his or her rights hereunder arising out of alleged or actual
occurrences, acts or failures to act prior to such 60th day.
The Corporation shall not, except by elimination or amendment
of this bylaw in a manner consistent with the preceding paragraph, take
any corporate action or enter into any agreement which prohibits, or
otherwise limits the rights of any person to, indemnification in
accordance with the provisions of this bylaw. The indemnification of
any person provided by this bylaw shall continue after such person has
ceased to be a director, officer or employee of the Corporation and
shall inure to the benefit of such person's heirs, executors,
administrators and legal representatives.
The Corporation is authorized to enter into agreements with
any of its directors, officers of employees extending rights to
indemnification and advancement of expenses to such person to the
fullest extent permitted by applicable law as it currently exists, but
the failure to enter into any such agreement shall not affect or limit
the rights of such person pursuant to this bylaw, it being expressly
recognized hereby that all directors, officers and employees of the
Corporation, by serving as such after the adoption hereof, are acting
in reliance hereon and that the Corporation is estoppel to contend
otherwise.
In case any provision in this bylaw shall be determined at any
time to be unenforceable in any respect, the other provisions shall not
in any way be affected or impaired thereby, and the affected provision
shall be given the fullest possible enforcement in the circumstances,
it being the intention of the Corporation to afford indemnification and
advancement of expenses to its directors, officers and employees,
acting in such capacities or in the other capacities mentioned herein,
to the fullest extent permitted by law.
For purposes of this bylaw, the Corporation shall be deemed to
have requested a person to serve an employee benefit plan where the
performance by such person of his or her duties to the Corporation also
imposes duties on, or otherwise involves services by, such person to
the plan or participants or beneficiaries of the plan, and excise taxes
assessed on a person with respect to an employee benefit plan pursuant
to applicable law shall be considered indemnifiable expenses. For
purposes of this bylaw, the term "Corporation" shall include any legal
successor to the Corporation, including any corporation which acquires
all or substantially all of the assets of the Corporation in one or
more transactions.
The Company carries directors' and officers' liability insurance for
the benefit of its directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) LIST OF EXHIBITS.
2.1 Plan and Agreement of Merger dated as of December 5, 1994
among the Company, CONMED Acquisition Corporation and Birtcher
Medical Systems, Inc. (incorporated herein by reference to
Appendix A of the Company's Registration Statement on S-4
(File No. 33-87746)).
2.2 Asset Purchase Agreement by and between New Dimensions In
Medicine, Inc. and CONMED Corporation dated as of the 18th day
of October 1995 (incorporated herein by reference to New
Dimensions In Medicine, Inc's. (Commission File No. 1-09156)
Report on Form 8-K dated October 18, 1995).
2.3 Purchase Agreement, dated as of May 28, 1997, by and between
Davol, Inc. and CONMED Corporation (incorporated by reference
to Exhibit 2 in the Company's Current Report on Form 8-K filed
on July 11, 1997).
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2.4 Stock and Asset Purchase Agreement dated as of November 26,
1997, between Bristol-Myers Squibb Company and CONMED
Corporation, as amended by an amendment dated as of December
31, 1997 (incorporated herein by reference to Exhibit 2.1(a)
in the Company's Current Report on Form 8-K, filed on January
8, 1998).
2.5 Amendment dated as of December 31, 1997, between Bristol-Myers
Squibb Company and CONMED Corporation, to the Stock and Asset
Purchase Agreement, dated as of November 26, 1997 between
Bristol-Myers Squibb Company and CONMED Corporation
(incorporated herein by reference to Exhibit 2.1(b) in the
Company's Current Report on Form 8-K, filed on January 8,
1998).
4.1 Registration Rights Agreement dated March 5, 1998 among the
Company, Salomon Brothers Inc and Chase Securities Inc.
4.2 Indenture dated March 5, 1998 among the Company, the
Subsidiary Guarantors named therein and First Union National
Bank, Trustee (incorporated by reference from Exhibit 4.6 to
the Company's Registration Statement on Form S-8 (File No.
333-48693)) filed on March 26, 1998.
4.3 Form of 9% Senior Subordinated Note Due 2008 (included in
Exhibit 4.2).
4.4 Credit Agreement dated as of December 29, 1997 among the
Company, the lenders party thereto and the Chase Manhattan
Bank as administrative agent for such lenders (incorporated by
reference from Exhibit 10.1 to the Company's Current Report on
Form 8-K filed January 8, 1998).
4.5 Guarantee and Collateral Agreement, dated as of December 31,
1997, made by CONMED Corporation and certain of its
subsidiaries in favor of The Chase Manhattan Bank
(incorporated herein by reference to Exhibit 10.2 in the
Company's Current Report on Form 8-K filed on January 8,
1998).
5 Opinion of Joseph J. Corasanti (to be filed by amendment).
12 Computation of ratio of earnings to fixed charges
(incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997).
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Joseph J. Corasanti (included in Exhibit 5).
24 Powers of Attorney (included on signature pages II-6 to II-16)
25 Statement of Eligibility of First Union National Bank,
Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
(B) FINANCIAL STATEMENT SCHEDULES
None.
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ITEM 22. UNDERTAKINGS.
The Undersigned registrant hereby undertakes to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
The undersigned registration hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to remove from
registration by means of post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that prior to any public
reoffering of the securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
The undersigned registrant hereby undertakes that every prospectus: (i)
that is filed pursuant to paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for 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
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 summarized in Item 20, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding or by insurance) is asserted by any 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 of whether or not such indemnification is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
II-4
<PAGE>
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
CONMED CORPORATION
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
and General Counsel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti President, Chief Executive Officer and Chairman of the Board of Directors
- ----------------------------------- (Principal Executive Officer)
Eugene R. Corasanti
/s/ Robert D. Shallish, Jr. Chief Financial Officer, Vice President - Finance and Assistant Secretary
- ----------------------------------- (Principal Financial Officer)
Robert D. Shallish, Jr.
/s/ Luke A. Pomilio Controller (Principal Accounting Officer)
- -----------------------------------
Luke A. Pomilio
/s/ Joseph J. Corasanti Vice President - Legal Affairs, General Counsel and Director
- -----------------------------------
Joseph J. Corasanti
II-6
<PAGE>
SIGNATURE TITLE
--------- -----
/s/ Robert E. Remmell Director and Assistant Secretary
- -----------------------------------
Robert E. Remmell
/s/ Harry Cone Director
- -----------------------------------
Harry Cone
/s/ Bruce F. Daniels Director
- -----------------------------------
Bruce F. Daniels
/s/ William D. Matthews Director
- -----------------------------------
William D. Matthews
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
ASPEN LABORATORIES, INC.
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti Chief Executive Officer and Director
- ----------------------------------- (Principal Executive Officer)
Eugene R. Corasanti
/s/ Thomas M. Acey Treasurer (Principal Financial and Accounting Officer)
- -----------------------------------
Thomas M. Acey
/s/ Joseph J. Corasanti Vice President - Legal Affairs and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
CONSOLIDATED MEDICAL EQUIPMENT
INTERNATIONAL, INC.
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President, General Counsel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti President, Treasurer and Director (Principal Executive Officer)
- -----------------------------------
Eugene R. Corasanti
/s/ Thomas M. Acey Controller (Principal Financial and Accounting Officer)
- -----------------------------------
Thomas M. Acey
/s/ Joseph J. Corasanti Vice President, General Counsel and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
CONMED ANDOVER MEDICAL, INC.
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti President, Chief Executive Officer and Director (Principal Executive
- ----------------------------------- Officer)
Eugene R. Corasanti
/s/ Robert D. Shallish, Jr. Vice President - Finance (Principal Financial and Accounting Officer)
- -----------------------------------
Robert D. Shallish, Jr.
/s/ Joseph J. Corasanti Vice President - Legal Affairs and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
ENVISION MEDICAL CORPORATION
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Daniel McGuire President (Principal Executive Officer)
- -----------------------------------
Daniel McGuire
/s/ Eugene R. Corasanti Director
- -----------------------------------
Eugene R. Corasanti
/s/ George Kempsell Director
- -----------------------------------
George Kempsell
/s/ Joseph J. Corasanti Vice President - Legal Affairs and Director
- -----------------------------------
Joseph J. Corasanti
/s/ Thomas M. Acey Treasurer and Assistant Secretary (Principal Financial and Accounting
- ----------------------------------- Officer)
Thomas M. Acey
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
LINVATEC CORPORATION
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ George Kempsell President and Director (Principal Executive Officer)
- -----------------------------------
George Kempsell
/s/ Eugene R. Corasanti Director
- -----------------------------------
Eugene R. Corasanti
/s/ Joseph Eaddy Vice President-Finance (Principal Financial and Accounting Officer)
- -----------------------------------
Joseph Eaddy
/s/ Joseph J. Corasanti Vice President - Legal Affairs and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
NDM, INC.
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti President, Chief Executive Officer and Director (Principal Executive
- ----------------------------------- Officer)
Eugene R. Corasanti
/s/ Robert D. Shallish, Jr. Chief Financial Officer and Treasurer (Principal Financial and Accounting
- ----------------------------------- Officer)
Robert D. Shallish, Jr.
/s/ Joseph J. Corasanti Secretary and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Utica and the State of New York, on the 7th day of
April, 1998.
BIRTCHER MEDICAL SYSTEMS, INC.
By: /s/ Joseph J. Corasanti
--------------------------------------
Name: Joseph J. Corasanti
Title: Vice President - Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eugene R. Corasanti and Joseph J.
Corasanti, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on April 7, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Eugene R. Corasanti President, Chief Executive Officer and Director (Principal Executive
- ----------------------------------- Officer)
Eugene R. Corasanti
/s/ Robert D. Shallish, Jr. Vice President and Treasurer (Principal Financial and Accounting Officer)
- -----------------------------------
Robert D. Shallish, Jr.
/s/ Joseph J. Corasanti Vice President - Legal Affairs, Secretary and Director
- -----------------------------------
Joseph J. Corasanti
</TABLE>
II-14
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of CONMED
Corporation (the "Company") of our report dated February 10, 1998 appearing on
page F-1 of the Company's Annual Report on Form 10-K for the year ended December
31, 1997. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
PRICE WATERHOUSE LLP
Syracuse, New York
April 8, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST
INDENTURE
ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
----------------------
FIRST UNION NATIONAL BANK
---------------------------------------------------
(Exact name of trustee as specified in its charter)
UNITED STATES NATIONAL BANK 56-0900030
- ------------------------------ -------------------
(Jurisdiction of incorporation (IRS employer
if not a national bank) identification no.)
FIRST UNION NATIONAL BANK
230 SOUTH TRYON STREET, 9TH FLOOR
CHARLOTTE, NC 28202
(704) 590-7600
ATTN: GENERAL COUNSEL
----------------------------------------
(Address of principal executive offices)
----------------------
SAME AS ABOVE
------------------------------------------------------------
(Name, address and telephone number, including area code, of
trustee's agent for service)
----------------------
<TABLE>
<CAPTION>
IRS EMPLOYER
EXACT NAME OF OBLIGOR AS STATE OR OTHER JURISDICTION OF PRIMARY STANDARD INDUSTRIAL IDENTIFICATION
SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION CLASSIFICATION CODE NUMBER NUMBER
- ------------------------------------- ----------------------------------- ---------------------------------- ------------------
<S> <C> <C> <C>
CONMED Corporation New York 3845 16-0977505
Aspen Laboratories, Inc. Colorado 3845 84-0692164
Consolidate Medical Equipment New York 3845 16-1237634
International, Inc.
CONMED Andover Medical, Inc. New York 3845 04-3195182
Birtcher Medical Systems, Inc. California 3845 95-0552628
Envision Medical Corporation California 3841 77-0273890
Linvatec Corporation Florida 3841 59-1086703
NDM, Inc. New York 3845 16-1495367
</TABLE>
310 BROAD STREET
UTICA, NEW YORK 13501
<PAGE>
(315) 797-8375
(Address, including zip code, and telephone number, including area code, of
Obligor's principal executive offices)
- ----------------------
9% SENIOR SUBORDINATED NOTES DUE 2008 OF CONMED CORPORATION
(Title of the indenture securities)
- ----------------------
1. General Information. Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Federal Reserve Bank of Richmond, VA Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission Division
of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor and underwriters. If the obligor or any
underwriter for the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
(See Note 1 on Page 4.)
<PAGE>
Because the obligor is not in default on any securities issued under indentures
under which the applicant is trustee, Items 3 through 15 are not required
herein.
16. List of Exhibits.
All exhibits identified below are filed as a part of this statement of
eligibility.
1. A copy of the Articles of Association of First Union National Bank as
now in effect, which contain the authority to commence business and a
grant of powers to exercise corporate trust powers, is filed with the
T-1 for Financial Security Assurance Holdings LTD, as filed with the
Securities and Exchange Commission on September 8, 1997 as Registration
No. 333-34181.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the Articles of Association is filed with
the T-1 for Financial Security Assurance Holdings LTD, as filed with
the Securities and Exchange Commission on September 8, 1997 as
Registration No. 333-34181.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents
specified in exhibits (1) or (2) above, is filed with the T-1 for
Financial Security Assurance Holdings LTD, as filed with the Securities
and Exchange Commission on September 8, 1997 as Registration No.
333-34181.
4. A copy of the existing By-laws of the trustee, or instruments
corresponding thereto is filed with the T-1 for Financial Security
Assurance Holdings LTD, as filed the Securities and Exchange Commission
on September 8, 1997 as Registration No. 333-34181.
5. Inapplicable.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939 is included at Page 4 of this Form T-1 Statement.
7. A copy of the latest report of condition of the trustee published
pursuant to law or to the requirements of its supervising or examining
authority is attached hereto.
8. Inapplicable.
9. Inapplicable.
<PAGE>
NOTE
Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsible answer to Item 2, the
answer to said Item is based on incomplete information. Item 2 may, however, be
considered correct unless amended by an amendment to this Form T-1.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, AS
AMENDED, THE TRUSTEE, FIRST UNION NATIONAL BANK, A NATIONAL ASSOCIATION
ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY
CAUSED THIS STATEMENT OF ELIGIBILITY AND QUALIFICATION TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF
HARTFORD, AND STATE OF CONNECTICUT, ON THE 14TH DAY OF APRIL, 1998.
FIRST UNION NATIONAL BANK
(TRUSTEE)
BY: /s/ W. Jeffrey Kramer
--------------------------------
W. Jeffrey Kramer
Vice President
CONSENT OF TRUSTEE
UNDER SECTION 321(B) OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND
IN CONNECTION WITH THE PROPOSED ISSUANCE BY THE OBLIGORS OF THE 9% SENIOR
SUBORDINATED NOTES DUE 2008, FIRST UNION NATIONAL BANK AS THE TRUSTEE HEREIN
NAMED, HEREBY CONSENTS THAT REPORTS OF EXAMINATIONS OF SAID TRUSTEE BY FEDERAL,
STATE, TERRITORIAL OR DISTRICT AUTHORITIES MAY BE FURNISHED BY SUCH AUTHORITIES
TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUESTS THEREFOR.
FIRST UNION NATIONAL BANK
BY: /s/ W. Jeffrey Kramer
--------------------------------
W. Jeffrey Kramer
Vice President
Dated: April 14, 1998
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR
9% SENIOR SUBORDINATED NOTES DUE 2008
OF
CONMED CORPORATION
PURSUANT TO THE
EXCHANGE OFFER
IN RESPECT OF
ALL OF ITS OUTSTANDING 9% SENIOR SUBORDINATED NOTES DUE 2008
FOR
9% SENIOR SUBORDINATED NOTES DUE 2008
---------------
PURSUANT TO THE PROSPECTUS DATED APRIL < >, 1998
------------------------------------------------------------------------------
: THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], :
: 1998 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). :
: TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. :
: ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE. :
------------------------------------------------------------------------------
The Exchange Agent For The Exchange Offer Is:
FIRST UNION NATIONAL BANK
Address: Facsimile Transmissions:
(Eligible Institutions Only)
First Union National Bank (704) 590-7628
Corporate Trust Operations
1525 West W.T. Harris Boulevard
Charlotte, NC 28288-1153 To Confirm by Telephone
Attention: W. Jeffrey Kramer or for Information Call:
(704) 590-7408
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION
VIA TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD
NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW)
THEIR OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the
Prospectus (the "Prospectus"), dated April < >, 1998, of CONMED
Corporation, a New York corporation (the "Company"), which, together with
this Letter of Transmittal and the instructions hereto (the "Letter of
Transmittal"), constitute the Company's offer (the "Exchange Offer") to
exchange $1,000 principal amount of its 9% Senior Subordinated Notes due
2008 (the "New Notes") that have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to a Registration
<PAGE>
Statement of which the Prospectus constitutes a part, for each $1,000 principal
amount of its outstanding 9% Senior Subordinated Notes due 2008 (the "Old
Notes"), upon the terms and subject to the conditions set forth in the
Prospectus.
This Letter of Transmittal is to be used by Holders if: (i)
certificates representing Old Notes are to be physically delivered to the
Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by
book-entry transfer to the Exchange Agent's account at The Depository Trust
Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures
set forth in the Prospectus under "The Exchange Offer--Procedures for Tendering"
by any financial institution that is a participant in DTC and whose name appears
on a security position listing as the owner of Old Notes (such participants,
acting on behalf of Holders, are referred to herein, together with such Holders,
as "Acting Holders"); or (iii) tender of Old Notes is to be made according to
the guaranteed delivery set forth in the Prospectus under "The Exchange
Offer--Procedures for Tendering." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person:
(i) in whose name Old Notes are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered Holder; or (ii) whose Old Notes are held of record by DTC who desires
to deliver such Old Notes by book-entry transfer at DTC.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this letter in its entirety.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
The instructions included with this Letter of Transmittal must be
followed. Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Exchange Agent. See Instruction 6 herein.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD
NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
-2-
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule to
this Letter of Transmittal. Tenders of Old Notes will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES
AGGREGATE
CERTIFICATE PRINCIPAL
NUMBER(S)* AMOUNT
NAME(S) AND ADDRESS(ES) OF HOLDER(S) (ATTACH SIGNED TENDERED (IF LESS
(PLEASE FILL IN, IF BLANK) LIST IF NECESSARY) THAN ALL) **
<S> <C> <C>
TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED
<FN>
* Need not be completed by Holders tendering by book-entry transfer.
** Need not be completed by Holders who wish to tender with respect to all Old Notes listed. See
Instruction 2.
</FN>
</TABLE>
-3-
<PAGE>
|_| CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
---------------------------------------------
DTC Book-Entry Account No.:
------------------------------------------------
Transaction Code No.:
------------------------------------------------------
If Holders desire to tender Old Notes pursuant to the Exchange Offer and (i)
certificates representing such Old Notes are not lost but are not immediately
available, (ii) time will not permit this Letter of Transmittal, certificates
representing such Old Notes or other required documents to reach the Exchange
Agent prior to the Expiration Date or (iii) the procedures for book-entry
transfer cannot be completed prior to the Expiration Date, such Holders may
effect a tender of such Old Notes in accordance with the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering."
|_| CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Holder(s) of Old Notes:
-----------------------------------------
Window Ticket No. (if any):
------------------------------------------------
Date of Execution of
Notice of Guaranteed Delivery:
------------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
---------------------
If Delivered by Book-Entry Transfer:
Name of Tendering Institution:
---------------------------------------------
DTC Book-Entry Account No.:
------------------------------------------------
Transaction Code No.:
------------------------------------------------------
|_| CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT
NUMBER SET FORTH ABOVE.
-4-
<PAGE>
|_| CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
------------------------------------------------------------------
Address:
---------------------------------------------------------------
---------------------------------------------------------------
-5-
<PAGE>
Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company, the above described aggregate
principal amount of the Company's 9% Senior Subordinated Notes due 2008 (the
"Old Notes") in exchange for a like aggregate principal amount of the Company's
9% Senior Subordinated Notes due 2008 (the "New Notes") which have been
registered under the Securities Act upon the terms and subject to the conditions
set forth in the Prospectus dated April < >, 1998 (as the same may be amended or
supplemented from time to time, the "Prospectus"), receipt of which is
acknowledged, and in this Letter of Transmittal (which, together with the
Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of the
principal amount of Old Notes tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Old Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent its agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company and as Trustee under the Indenture
for the Old Notes and the New Notes) with respect to the tendered Old Notes with
full power of substitution to (i) deliver certificates for such Old Notes to the
Company, or transfer ownership of such Old Notes on the account books maintained
by DTC, together in either such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Company and (ii) present
such Old Notes for transfer on the books of the Company and receive all benefits
and otherwise exercise all rights of beneficial ownership of such Old Notes, all
in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, sell, assign and transfer the Old Notes tendered
hereby and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim, when the same are acquired by the Company. The
undersigned also acknowledges that this Exchange Offer is being made in reliance
upon an interpretation by the staff of the Securities and Exchange Commission
that the New Notes issued in exchange for the Old Notes pursuant to the Exchange
Offer may be offered for sale, resold and otherwise transferred by holders
thereof (other than any such holder that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act provided
that such New Notes are acquired in the ordinary course of such holder's
business and such holders have no arrangement with any person to participate in
the distribution of such New Notes. If the undersigned is not a broker-dealer,
the undersigned represents that it is not engaged in, and does not intend to
engage in, a distribution of the New Notes.
The undersigned will upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment and transfer of the Old Notes tendered
hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Old Notes when, and as if the Company has given oral
or written notice thereof to the Exchange Agent. If any tendered Old Notes are
not accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for any such unaccepted Old Notes will be returned (except as noted
below with respect to tenders through DTC), without expense, to the undersigned
at the address shown below or at a different address shown below or at a
different address as may be indicated under "Special Issuance Instructions" as
promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned and every obligation under this Letter of Transmittal shall be
binding upon the undersigned's heirs, personal representatives, successors and
assigns.
-6-
<PAGE>
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the certificates representing the New Notes issued in exchange for
the Old Notes accepted for exchange and return any Old Notes not tendered or not
exchanged, in the name(s) of the undersigned (or in either such event in the
case of Old Notes tendered by DTC, by credit to the account at DTC). Similarly,
unless otherwise indicated under "Special Delivery Instructions," please send
the certificates representing the New Notes issued in exchange for the Old Notes
accepted for exchange and any certificates for Old Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signatures, unless, in either event,
tender is being made through DTC. In the event that both "Special Issuance
Instructions" and "Special Delivery Instructions" are completed, please issue
the certificates representing the New Notes issued in exchange for the Old Notes
accepted for exchange and return any Old Notes not tendered or not exchanged in
the name(s) of, and send said certificates to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Old Notes from the name of the registered holder(s) thereof if the Company
does not accept for exchange any of the Old Notes so tendered.
BY TENDERING OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE COMPANY, (II) ANY NEW NOTES TO BE RECEIVED BY THE UNDERSIGNED
ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED
HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A
DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW NOTES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW NOTES.
BY TENDERING OLD NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER
OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH OLD NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY
AS A NOMINEE, OR (B) SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES
AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO
TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY
RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN EXCHANGE FOR
OLD NOTES, WHERE SUCH OLD NOTES WERE ACQUIRED BY SUCH PARTICIPATING
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE
(SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE
PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW NOTES HAVE BEEN DISPOSED OF BY
SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO
ACQUIRED OLD NOTES FOR ITS
-7-
<PAGE>
OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS
LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF
THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY
STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY
MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE
SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE NEW NOTES MAY
BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE TO SUSPEND THE
SALE OF THE NEW NOTES, IT SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE
DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN
CONNECTION WITH THE RESALE OF NEW NOTES BY THE NUMBER OF DAYS DURING THE PERIOD
FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE
DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE
SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW NOTES
OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY HAS GIVEN NOTICE THAT THE SALE
OF NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD
NOTES AS SET FORTH IN SUCH BOX.
-8-
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF
OLD NOTES REGARDLESS OF WHETHER OLD NOTES ARE BEING PHYSICALLY
DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old Notes
exactly as their name(s) appear(s) on certificate(s) for Old Notes or, if
tendered by a participant in DTC, exactly as such participant's name appears on
a security position listing as the owner of Old Notes, or by person(s)
authorized to become registered Holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person
acting in a fiduciary or representative capacity, such person must set forth his
or her full title below under "Capacity" and submit evidence satisfactory to the
Company of such person's authority to so act. See Instruction 3 herein.
If the signature appearing below is not of the registered Holder(s) of the
Old Notes, then the registered Holder(s) must sign a valid proxy.
X ................................. Date: ...................................
X ................................. Date: ...................................
SIGNATURE(S) OF HOLDER(S) OR
AUTHORIZED SIGNATORY
Name(s): .......................... Address: ................................
.......................... ................................
(PLEASE PRINT) (INCLUDING ZIP CODE)
Capacity:.......................... Area Code and
Social Telephone No.:.........................
Security No.: ...................
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN)
Certain Signatures Must Be Guaranteed by an Eligible Institution
................................................................................
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
................................................................................
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER
(INCLUDING AREA CODE) OF FIRM)
................................................................................
(AUTHORIZED SIGNATURE)
................................................................................
(PRINTED NAME)
................................................................................
(TITLE)
Date: ...........................
-9-
<PAGE>
<TABLE>
<CAPTION>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 4 HEREIN) (SEE INSTRUCTION 4 HEREIN)
<S> <C>
To be completed ONLY if certificates for Old Notes in To be completed ONLY if certificates for Old Notes in
a principal amount not tendered are to be issued in a principal amount not tendered or not accepted for
the name of, or the New Notes issued pursuant to the purchase or the New Notes issued pursuant to the
Exchange Offer are to be issued to the order of, Exchange Offer are to be sent to someone other than
someone other than the person or persons whose the person or persons whose signature(s) appear(s)
signature(s) appear(s) within this Letter of within this Letter of Transmittal or to an address
Transmittal or issued to an address different from different from that shown in the box entitled
that shown in the box entitled "Description of Old "Description of Old Notes" within this Letter of
Notes" within this Letter of Transmittal, or if Old Transmittal.
Notes tendered by book-entry transfer that are not
accepted for purchase are to be credited to an account
maintained at DTC.
Name:................................................. Name:....................................................
(PLEASE PRINT) (PLEASE PRINT)
Address: ............................................. Address: ................................................
(PLEASE PRINT) (PLEASE PRINT)
...................................................... .........................................................
ZIP CODE ZIP CODE
...................................................... .........................................................
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 HEREIN) (SEE SUBSTITUTE FORM W-9 HEREIN)
</TABLE>
-10-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER AND THE SOLICITATION
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The
certificates for the tendered Old Notes (or a confirmation of a book-entry
transfer into the Exchange Agent's account at DTC of all Old Notes delivered
electronically), as well as a properly completed and duly executed copy of this
Letter of Transmittal or facsimile hereof and any other documents required by
this Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein prior to 5:00 P.M., New York City time, on the Expiration Date.
The method of delivery of the tendered Old Notes, this Letter of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the Holder and, except as otherwise provided below, the delivery will be
deemed made only when actually received by the Exchange Agent. Instead of
delivery by mail, it is recommended that the Holder use an overnight or hand
delivery service. In all cases, sufficient time should be allowed to assure
timely delivery. No Letter of Transmittal or Old Notes should be sent to the
Company.
Holders who wish to tender their Old Notes and (i) whose Old Notes
are not immediately available or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal or any other documents required hereby to the Exchange
Agent prior to the Expiration Date must tender their Old Notes and follow the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution;
(ii) prior to the Expiration Date, the Exchange Agent must have received from
the Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the Holder of the Old Notes, the certificate
number or numbers of such Old Notes and the principal amount of Old Notes
tendered, stating that the tender is being made thereby and guaranteeing that,
within five business days after the Expiration Date, this Letter of Transmittal
(or facsimile thereof) together with the certificate(s) representing the Old
Notes (or a confirmation of electronic delivery of book-entry delivery into the
Exchange Agent's account at DTC) and any of the required documents will be
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal (or facsimile hereof), as
well as all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Old Notes in proper form for transfer
(or a confirmation of electronic mail delivery of book-entry delivery into the
Exchange Agent's account at DTC), must be received by the Exchange Agent within
five business days after the Expiration Date, all as provided in the Prospectus
under the caption "Guaranteed Delivery Procedures." Any Holder of Old Notes who
wishes to tender his Old Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery prior to 5:00 P.M., New York City time, on the Expiration
Date.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Old Notes to be properly tendered pursuant to the guaranteed delivery procedure,
the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to
the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS ARE AT THE OPTION AND SOLE RISK OF THE
TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY
-11-
<PAGE>
WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY
SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
All questions as to the validity, form, eligibility (including
time of receipt), acceptance and withdrawal of tendered Old Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Old Notes not properly tendered or any Old Notes the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the right to waive any irregularities or conditions of tender as
to particular Old Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Old Notes, nor shall any
of them incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost by
the Exchange Agent to the tendering Holders of Old Notes, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
2. PARTIAL TENDERS; WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted in all denominations of $1,000 and integral multiples in excess
thereof. If less than the entire principal amount of any Old Notes is tendered,
the tendering Holder should fill in the principal amount tendered in the third
column of the chart entitled "Description of Old Notes." The entire principal
amount of Old Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all Old
Notes is not tendered, Old Notes for the principal amount of Old Notes delivered
to the Exchange Agent will be deemed to have been tendered unless otherwise
indicated. If the entire principal amount of all Old Notes is not tendered, Old
Notes for the principal amount of Old Notes not tendered and a certificate or
certificates representing New Notes issued in exchange of any Old Notes accepted
will be sent to the Holder at his or her registered address, unless a different
address is provided in the appropriate box on this Letter of Transmittal or
unless tender is made through DTC, promptly after the Old Notes are accepted for
exchange.
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Notes to be withdrawn,
the aggregate principal amount of Old Notes to be withdrawn, and (if
Certificates for Old Notes have been tendered) the name of the registered holder
of the Old Notes as set forth on the certificate for the Old Notes, if different
from that of the person who tendered such Old Notes. If certificates for the Old
Notes have been delivered or otherwise identified to the Exchange Agent, then
prior to the physical release of such certificates for the Old Notes, the
tendering holder must submit the serial numbers shown on the particular
certificates for the Old Notes to be withdrawn and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution, except in the case
of Old Notes tendered for the account of an Eligible Institution. If Old Notes
have been tendered pursuant to the procedures for book-entry transfer set forth
in the Prospectus under "The Exchange Offer--Procedures for Tendering," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Notes, in which case a notice of
withdrawal will be effective if delivered to the Exchange Agent by
-12-
<PAGE>
written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of
Old Notes may not be rescinded. Old Notes properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures for
Tendering."
3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or
facsimile hereof) is signed by the registered Holder(s) of the Old Notes
tendered hereby, the signature must correspond with the name(s) as written on
the face of the Old Notes without alternation, enlargement or any change
whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by
the registered Holder(s) of Old Notes tendered and the certificate(s) for New
Notes issued in exchange therefor is to be issued (or any untendered principal
amount of Old Notes is to be reissued) to the registered Holder, such Holder
need not and should not endorse any tendered Old Debenture, nor provide a
separate bond power. In any other case, such holder must either properly endorse
the Old Notes tendered or transmit a properly completed separate bond power with
this Letter of Transmittal, with the signatures on the endorsement or bond power
guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a
person other than the registered Holder(s) of any Old Notes listed, such Old
Notes must be endorsed or accompanied by appropriate bond powers signed as the
name of the registered Holder(s) appears on the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old
Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, or officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and unless waived by the Company, evidence satisfactory to the Company
of their authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by
this Instruction 3 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal (or facsimile hereof)
must be guaranteed by an Eligible Institution unless the Old Notes tendered
pursuant thereto are tendered (i) by a registered Holder (including any
participant in DTC whose name appears on a security position listing as the
owner of Old Notes) who has not completed the box set forth herein entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" or (ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders
should indicate, in the applicable spaces, the name and address to which New
Notes or substitute Old Notes for principal amounts not tendered or not accepted
for exchange are to be issued or sent, if different from the name and address of
the person signing this Letter of Transmittal (or in the case of tender of the
Old Notes through DTC, if different from DTC). In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
5. IRREGULARITIES. The Company will determine, in its sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Notes, which determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any and all tenders determined by
it not to be in proper form or the acceptance of which, or exchange for which,
may, in the view of counsel to the Company, be unlawful. The Company also
reserves the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer--General" or any conditions or irregularity in
-13-
<PAGE>
any tender of Old Notes of any particular holder whether or not similar
conditions or irregularities are waived in the case of other holders. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including this Letter of Transmittal and the instructions hereto) will be final
and binding. No tender of Old Notes will be deemed to have been validly made
until all irregularities with respect to such tender have been cured or waived.
The Company, any affiliates or assigns of the Company, the Exchange Agent, or
any other person shall not be under any duty to give notification of any
irregularities in tenders or incur any liability for failure to give such
notification.
6. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent at
its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
7. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under United States
federal income tax law, a holder whose tendered Old Notes are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Notes
exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g.,
social security number or employer identification number) of the registered
owner of the Old Notes or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Notes. If the Old Notes are registered in
more than one name or are not in the name of the actual owner, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
-14-
<PAGE>
Backup withholding is not an additional United States federal
income tax. Rather, the United States federal income tax liability of a person
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
8. WAIVER OF CONDITIONS. The Company reserves the absolute right to
amend, waive or modify specified conditions in the Exchange Offer in the case of
any Old Notes tendered.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering
Holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instruction.
10. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Notes are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of the Old Notes
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Notes in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
(DO NOT WRITE IN SPACE BELOW)
Certificate Surrendered Old Notes Tendered Old Notes Accepted
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Delivery Prepared by Checked by Date
-15-
<PAGE>
PAYER'S NAME:
-------------------------------
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
|SUBSTITUTE | PART 1--PLEASE PROVIDE YOUR TIN IN THE | ___________________________ |
| | BOX AT RIGHT AND CERTIFY BY SIGNING | Social Security Number |
|FORM W-9 | AND DATING BELOW | |
| | | OR _________________________________|
| | | Employer Identification Number |
| |---------------------------------------------------------------------------------------------------
| | | |
|Department of the Treasury | PART 2--Certification--Under Penalties of Perjury, I certify that: | PART 3-- |
|Internal Revenue Service | | |
| | (1) The number shown on this form is my correct Taxpayer | |
| | Identification Number (or I am waiting for a number | Awaiting TIN [_] |
|Payer's Request for Taxpayer | to be issued to me) and | |
|Identification Number ("TIN") | | |
|and Certification | (2) I am not subject to backup withholding either because I have | |
| | not been notified by the Internal Revenue Service ("IRS") | |
| | that I am subject to backup withholding as a result of failure | |
| | to report all interest or dividends, or the IRS has notified me | |
| | that I am no longer subject to backup withholding. | |
| ----------------------------------------------------------------------------------------------------
| |
| Certificate instructions -- You must cross out item (2) in Part 2 above if you have |
| been notified by the IRS that you are subject to backup withholding because of |
| under-reporting interest or dividends on your tax return. However, if after being |
| notified by the IRS that you were subject to backup withholding you received another |
| notification from the IRS stating that you are no longer subject to backup |
| withholding, do not cross out item (2). |
| |
| |
| SIGNATURE DATE |
| --------------------------------------------------- --------------------|
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF NEW NOTES
PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
| |
| CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER |
| |
| I certify under penalties of perjury that a taxpayer |
| identification number has not been issued to me, and either (a) I have |
| mailed or delivered an application to receive a taxpayer |
| identification number to the appro priate Internal Revenue Service |
| Center or Social Security Administration Office or (b) I intend to |
| mail or deliver an application in the near future. I understand that |
| if I do not provide a taxpayer identification number within 60 days, |
| 20 percent of all reportable payments made to me thereafter will be |
| withheld until I provide a number. |
| |
| |
| ------------------------------------- ----------------------------- |
| Signature Date |
- --------------------------------------------------------------------------------
-16-
<PAGE>
The Exchange Agent for the Exchange Offer is:
FIRST UNION NATIONAL BANK
Address: Facsimile Transmissions:
(Eligible Institutions Only)
First Union National Bank (704) 590-7628
Corporate Trust Operations
1525 West W.T. Harris Boulevard
Charlotte, NC 28288-1153 To Confirm by Telephone
Attention: W. Jeffrey Kramer or for Information Call:
(704) 590-7408
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF ANY AND ALL OUTSTANDING
9% SENIOR SUBORDINATED NOTES DUE 2008
OF
CONMED CORPORATION
As set forth in the Prospectus, dated , April < > 1998 (the
"Prospectus"), of CONMED Corporation (the "Company"), in the accompanying Letter
of Transmittal and instructions thereto (the "Letter of Transmittal"), this form
or one substantially equivalent hereto must be used to accept the Company's
exchange offer (the "Exchange Offer") to purchase all of its outstanding 9%
Senior Subordinated Notes due 2008 (the "Old Notes") if (i) certificates
representing the Old Notes to be tendered for purchase and payment are not lost
but are not immediately available, (ii) time will not permit the Letter of
Transmittal, certificates representing such Old Notes or other required
documents to reach the Exchange Agent prior to the Expiration Date or (iii) the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date. This form may be delivered by an Eligible Institution by mail or hand
delivery or transmitted, via telegram, telex or facsimile, to the Exchange Agent
as set forth below. This Notice of Guaranteed Delivery may be delivered by hand,
overnight courier or mail, or transmitted by facsimile transmission, to the
Exchange Agent. See "The Exchange Offer--Procedures for Tendering" in the
Prospectus. In addition, in order to utilize the guaranteed delivery procedure
to tender Old Notes pursuant to the Exchange Offer, a completed, signed and
dated Letter of Transmittal relating to the Old Notes (or facsimile thereof)
must also be received by the Exchange Agent prior to 5:00 P.M., New York City
time, on the Expiration Date. All capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Prospectus.
-----------------------------------------------------------------------
| THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY |
| TIME, ON < >, 1998 UNLESS THE OFFER IS EXTENDED (THE |
| "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN AT |
| ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY PRIOR TO THE |
| EXPIRATION DATE. |
-----------------------------------------------------------------------
The Exchange Agent:
FIRST UNION NATIONAL BANK
Address: Facsimile Transmissions:
(Eligible Institutions Only)
Address: Facsimile Transmissions:
(Eligible Institutions Only)
First Union National Bank (704) 590-7628
Corporate Trust Operations
1525 West W.T. Harris Boulevard
Charlotte, NC 28288-1153 To Confirm by Telephone
Attention: W. Jeffrey Kramer or for Information Call:
(704) 590-7408
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSIONS OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Exchange Offer and the Letter of Transmittal,
receipt of which is hereby acknowledged, the aggregate principal amount of Old
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus.
<PAGE>
The undersigned understands that tenders of Old Notes will be accepted only
in principal amounts equal to $1,000 or integral multiples thereof. The
undersigned understands that tenders of Old Notes pursuant to the Exchange Offer
may not be withdrawn after 5:00 P.M., New York City time on the Business Day
prior to the Expiration Date. Tenders of Old Notes may also be withdrawn if the
Exchange Offer is terminated without any such Old Notes being purchased
thereunder or as otherwise provided in the Prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
<TABLE>
<CAPTION>
PLEASE SIGN AND COMPLETE
<S> <C>
Signature(s) of Registered Owner(s) or Authorized Signatory: Name(s) of Registered Holder(s):
- --------------------------------------------------------------- ----------------------------------------------------------------
- --------------------------------------------------------------- ----------------------------------------------------------------
Principal Amount of Old Notes Tendered: Address:
------------------------ --------------------------------------------------------
- --------------------------------------------------------------- ----------------------------------------------------------------
Certificate No(s). of Old Notes (if available): Area Code and Telephone No.:
---------------- ------------------------------------
- --------------------------------------------------------------- If Old Notes will be delivered by book-entry transfer at The
Depository Trust Company, insert, Depository Account No.:
- --------------------------------------------------------------- -------
Date:
---------------------------------------------------------- ----------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
| |
| This Notice of Guaranteed Delivery must be signed by the registered |
| holder(s) of Old Notes exactly as its (their) name(s) appear on |
| certificates for Old Notes or on a security position listing as the owner |
| of Old Notes, or by person(s) authorized to become registered Holder(s) |
| by endorsements and documents transmitted with this Notice of Guaranteed |
| Delivery. If signature is by a trustee, executor, administrator, |
| guardian, attorney-in-fact, officer or other person acting in a fiduciary |
| or representative capacity, such person must provide the following |
| information. |
| |
| Please print name(s) and address(es) |
| |
| Name(s): |
| ---------------------------------------------------------------- |
| |
| ---------------------------------------------------------------- |
| Capacity: |
| ---------------------------------------------------------------- |
| Address(es): |
| ---------------------------------------------------------------- |
| |
| ---------------------------------------------------------------- |
| |
| ---------------------------------------------------------------- |
| |
| DO NOT SEND OLD NOTES WITH THIS FORM. NOTES SHOULD BE SENT TO THE |
| EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED |
| LETTER OF TRANSMITTAL. |
- --------------------------------------------------------------------------------
-2-
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Notes
tendered hereby in proper form for transfer, or confirmation of the book-entry
transfer of such Old Notes to the Exchange Agent's account at The Depository
Trust Company, pursuant to the procedures for book-entry transfer set forth in
the Prospectus, in either case together with one or more properly completed and
duly executed Letter(s) of Transmittal (or facsimile thereof) and any other
required documents within five business days after the date of execution of this
Notice of Guaranteed Delivery.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND OLD NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD SET
FORTH ABOVE AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE
UNDERSIGNED.
<TABLE>
<S> <C>
Name of Firm:
-------------------------------------------- -------------------------------------------------------
Authorized Signature
Address: Name:
------------------------------------------------- --------------------------------------------------
Title:
- --------------------------------------------------------- -------------------------------------------------
Area Code and Telephone No.: Date:
----------------------------- --------------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
-3-
