As filed with the Securities and Exchange Commission on July 18, 2003
Registration No. 333-103959
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NDCHEALTH CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 7389 | 58-0977458 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
SUBSIDIARY GUARANTORS LISTED ON SCHEDULE A HERETO
(Exact Name of Registrants as Specified In Their Charters)
NDC Plaza
Atlanta, GA 30329-2010
(404) 728-2000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrants’ Principal Executive Offices)
Randolph L.M. Hutto
Chief Financial Officer and Executive Vice President
NDCHealth Corporation
NDC Plaza
Atlanta, Georgia 30329-2010
(404) 728-2000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, Of Agent For Service)
With a copy to:
Mary A. Bernard
King & Spalding LLP
1185 Avenue of the Americas
New York, New York 10036-4003
(212) 556-2100
Schedule A
Subsidiary Guarantors | State or Other Jurisdiction of Incorporation or Organization | I.R.S. Employer Identification No. | |||||
NDC Health Information Services (Arizona) Inc. | Delaware | 94-3018063 | |||||
NDC of Canada, Inc. | Delaware | 01-0721703 |
NDCHEALTH CORPORATION
Offer to Exchange
10½% Senior Subordinated Notes Due 2012
that have been registered under the Securities Act of 1933
for
all outstanding unregistered
10½% Senior Subordinated Notes Due 2012
The Registered Notes | ||
• | The terms of the new notes are substantially identical to the old notes, except that the new notes will be freely tradable. | |
• | We will pay interest on the new notes at an annual rate of 10 1/2%. Interest on the new notes is payable on June 1 and December 1 of each year. | |
• | The new notes will be unsecured senior subordinated obligations and will rank junior to our senior indebtedness. | |
• | The new notes will mature on December 1, 2012. | |
• | The new notes will be fully and unconditionally guaranteed on a senior subordinated basis by our subsidiaries that guarantee our obligations under our credit facility. | |
• | We may redeem some or all of the new notes at any time prior to December 1, 2007 at a make-whole redemption price. On or after December 1, 2007, we may, at our option, redeem some or all of the new notes at the redemption prices described in this prospectus. Prior to December 1, 2005, we may redeem up to 35% of the notes originally issued with the net proceeds of specified equity offerings. | |
The Exchange Offer | ||
• | The exchange offer will expire at 5:00 p.m. New York City time, on , 2003, unless extended. We do not currently intend to extend the exchange offer. However, if we do extend the exchange offer, we will not extend it for more than an aggregate of 30 days. | |
• | The exchange offer is not subject to any conditions other than that the exchange offer not violate applicable law or any applicable interpretation of the staff of the SEC. | |
• | All old notes that are validly tendered and not validly withdrawn on or prior to the expiration date will be exchanged. | |
• | Tenders of old notes may be withdrawn at any time before the expiration of the exchange offer. |
The date of this prospectus is , 2003.
TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION
• | Our Annual Report on Form 10-K for the year ended May 30, 2003 filed on July __, 2003 (File No. 001-12392); and |
• | Our Current Report on Form 8-K filed on July , 2003 (File No. 001-12392). |
NDC Plaza
Atlanta, Georgia 30329-2010
(404) 728-2000
Attention: Chief Financial Officer
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SUMMARY
The Company
Overview
Network Services and Systems Solutions |
Intelligent Network |
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Information Management Solutions |
Recent Acquisitions |
Our Strategies |
• | We intend to capitalize on opportunities in the expanding healthcare market as providers and payers continue to transition to electronic claims processing. |
• | We intend to build on our product portfolio of both transaction processing services and pharmaceutical market research. |
• | We intend to continue to strengthen our sales and marketing programs. |
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The Exchange Offer
Securities Offered | $200,000,000 aggregate principal amount of our 10½% senior subordinated notes due 2012, which have been registered under the Securities Act. The terms of the new notes are substantially identical to those of the old notes, except that the transfer restrictions, registration rights and penalty interest provisions relating to the old notes do not apply to the new notes. |
The Exchange Offer | We are offering new notes in exchange for a like principal amount of our old notes. We are offering these new notes to satisfy our obligations under the registration rights agreement which we entered into with the initial purchasers of the old notes. You may tender your old notes for exchange by following the procedures described under the heading “The Exchange Offer.” |
Expiration Date; Tenders; Withdrawal | The exchange offer will expire at 5:00 p.m., New York City time, on , 2003, unless we extend it. We do not currently intend to extend the exchange offer. However, if we do extend the exchange offer, we will not extend it for more than an aggregate of 30 days. You may withdraw any old notes that you tender for exchange at any time prior to the expiration date of the exchange offer. We will accept any and all old notes validly tendered and not validly withdrawn on or before the expiration date. See “The Exchange Offer—Procedures for Tendering Old Notes” and “—Withdrawals of Tenders of Old Notes” for a more complete description of the tender and withdrawal period. |
United States Federal Income Tax Consequences | Your exchange of old notes for new notes to be issued in the exchange offer will not result in any gain or loss to you for United States federal income tax purposes. See “United States Federal Income Tax Consequences” for a summary of the United States federal income tax consequences associated with the exchange of old notes for new notes and the ownership and disposition of those new notes. |
Use of Proceeds | We will not receive any cash proceeds from the exchange offer. |
Exchange Agent | Regions Bank. |
Shelf Registration | If applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer, or upon the request of any holder of old notes under certain circumstances, we will be required to file, and use our reasonable best efforts to cause to become effective, a shelf registration statement under the Securities Act which would cover resales of old notes. See “Exchange Offer; Registration Rights.” |
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Consequences of Your Failure to Exchange Your Old Notes | Old notes that are not exchanged in the exchange offer will continue to be subject to the restrictions on transfer that are described in the legend on the old notes. In general, you may offer or sell your old notes only if they are registered under, or offered or sold pursuant to an exemption from, the Securities Act and applicable state securities laws. We do not currently intend to register the old notes under the Securities Act, other than in connection with the exchange offer. If your old notes are not tendered and accepted in the exchange offer, it may become more difficult for you to sell or transfer your old notes |
Consequences of Exchanging Your Old Notes | Based on interpretations of the staff of the SEC, we believe that you will be allowed to resell the new notes that we issue in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act if: |
• | you are acquiring the new notes in the ordinary course of your business, |
• | you are not engaging in and do not intend to engage in a distribution of the new notes, |
• | you have no arrangement or understanding with any person to participate in the distribution of the new notes, and |
• | you are not an “affiliate,” as defined in Rule 405 under the Securities Act, of us or any of the subsidiary guarantors. |
If any of these conditions are not satisfied and you transfer any new notes issued to you in the exchange offer without delivering a prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. We will not be responsible for, or indemnify you against, any liability you incur. |
If you are a broker-dealer and you will receive new notes for your own account in exchange for old notes that you acquired as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of the new notes. See “Plan of Distribution” for a description of the prospectus delivery obligations of broker-dealers following the exchange offer. |
If you are a broker-dealer that acquired old notes from us in the initial offering and not as a result of market making or other trading activities, you will, in the absence of an exemption, be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the new notes. This prospectus will not be available for use by any such broker-dealers in connection with resales of the new notes. |
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The New Notes
Issuer | NDCHealth Corporation |
Notes Offered | $200,000,000 aggregate principal amount of 10½% senior subordinated notes due 2012. |
Maturity | December 1, 2012. |
Interest Payment Dates | June 1 and December 1 of each year. |
Subsidiary Guarantees | All of our current and future domestic subsidiaries that guarantee our obligations under our credit facility will jointly and severally, fully and unconditionally guarantee the new notes on an unsecured senior subordinated basis. If we are unable to make payments on the new notes when they are due, our subsidiary guarantors will be obligated to make them instead. |
As of the date of this prospectus, the subsidiary guarantors are NDC Health Information Services (Arizona) Inc. and NDC of Canada, Inc. |
Ranking | The new notes will be unsecured senior subordinated obligations and will rank junior to our senior indebtedness, including indebtedness under our credit facility, which includes a $125 million term loan and a $100 million revolving credit facility. Our credit facility is secured by a first priority lien on substantially all of our and our subsidiary guarantors’ assets. The new notes will effectively rank junior to our non- guarantor subsidiaries’ indebtedness and other liabilities, including trade payables. The guarantees of the new notes will rank junior to senior indebtedness of our subsidiary guarantors, including their guarantees of our credit facility. Because the new notes are subordinated, in the event of bankruptcy, liquidation or reorganization and acceleration of or payment default on senior indebtedness, holders of the new notes will not receive any payment until holders of senior indebtedness have been paid in full. |
As of , 2003, |
• | we and our subsidiary guarantors had $ million of senior indebtedness outstanding, and | |
• | our non-guarantor subsidiaries had $ million of indebtedness and other liabilities outstanding. |
These amounts do not include approximately $ million that we have available to borrow under our credit facility, all of which would be senior indebtedness. | ||
Make-Whole Redemption | We may, at our option, redeem some or all of the new notes at any time prior to December 1, 2007 by paying the greater of (1) 100% of the principal amount of the new notes being redeemed and (2) the sum of the present values of 105.250% of the principal amount of such new notes plus scheduled interest payments on such new notes to and including |
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December 1, 2007, discounted to the redemption date on a semi-annual basis at the treasury rate plus 50 basis points, plus accrued and unpaid interest to the redemption date. |
Optional Redemption | We may redeem some or all of the new notes at any time on or after December 1, 2007 at the redemption prices (expressed as percentages of principal amount) set forth below, together with accrued and unpaid interest, if any, to the date of redemption, if redeemed during the 12-month period beginning on December 1 of the years indicated below. |
Year | Redemption Price | ||||
2007 | 105.250% | ||||
2008 | 103.500% | ||||
2009 | 101.750% | ||||
2010 and thereafter | 100.000% |
Equity Offering Optional Redemption | Before December 1, 2005, we may redeem on one or more occasions up to 35% of the aggregate principal amount of the originally issued notes with the net proceeds of specified equity offerings at a redemption price equal to 110.500% of the principal amount plus accrued and unpaid interest to the redemption date, if at least 65% of the original aggregate principal amount of the notes originally issued remains outstanding after such redemption. |
Change of Control | If a change of control event occurs, each holder of new notes may require us to repurchase all or a portion of its new notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest to the repurchase date. |
Restrictive Covenants | The indenture governing the old notes and the new notes contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: |
• | incur additional indebtedness; |
• | pay dividends on, redeem or repurchase our capital stock; |
• | make investments; |
• | issue or sell capital stock of restricted subsidiaries; |
• | create certain liens; |
• | sell assets; |
• | in the case of our subsidiaries, guarantee indebtedness; |
• | engage in transactions with affiliates; |
• | create unrestricted subsidiaries; and |
• | consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis. |
All of the covenants described above are subject to important exceptions and qualifications which are described under the heading “Description of the New Notes” in this prospectus. |
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SUMMARY CONSOLIDATED FINANCIAL DATA
Fiscal Year | ||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | ||||||||||||
(in thousands, except per share data and ratios) | ||||||||||||||||
Results of Operations Data: | ||||||||||||||||
Revenue: | ||||||||||||||||
Information management | $ | 128,961 | $ | 131,229 | $ | 136,616 | $ | 150,399 | ||||||||
Network services and systems | 121,336 | 139,626 | 176,015 | 198,622 | ||||||||||||
Divested businesses (1) | 88,699 | 74,818 | 24,421 | 4,360 | ||||||||||||
Total | 338,996 | 345,673 | 337,052 | 353,381 | ||||||||||||
Cost of service | 179,654 | 181,001 | 168,691 | 174,944 | ||||||||||||
Sales, general and administrative Expense | 67,577 | 86,062 | 77,640 | 76,961 | ||||||||||||
Operating income (loss) | 62,104 | 12,383 | 53,820 | 77,102 | ||||||||||||
Interest and other expense | (7,484 | ) | (6,532 | ) | (8,038 | ) | (9,693 | ) | ||||||||
Income (loss) before discontinued Operations | 33,863 | (1,163 | ) | 24,217 | 15,110 | |||||||||||
Net income (loss) | 71,437 | (40,165 | ) | 32,540 | 15,110 | |||||||||||
Balance Sheet Data (at period end): | ||||||||||||||||
Cash and cash equivalents | 2,058 | 1,789 | 12,420 | 13,447 | ||||||||||||
Total assets | 534,723 | 653,632 | 484,361 | 658,184 | ||||||||||||
Total debt | 200,013 | 228,750 | 155,431 | 258,854 | ||||||||||||
Total stockholders’ equity | 409,094 | 330,136 | 226,616 | 257,746 | ||||||||||||
(1) | Our divested businesses include EBO, which was divested in fiscal 2000, Pharmacy Systems, which was divested in fiscal 2001, and Physician Services, which was divested in fiscal 2002. |
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RISK FACTORS
Risk Factors Relating to the New Notes |
Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the new notes.
• | make it more difficult for us to satisfy our obligations with respect to the new notes because of the need to satisfy our senior debt obligations; |
• | limit our ability to obtain additional financing, if needed, for working capital, capital expenditures and acquisitions; |
• | make it more difficult for us to sustain our cash flow during economic or industry downturns because of an inability to expand our product offerings; |
• | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, developing new products and other purposes; |
• | limit our flexibility in planning for, or reacting to, changes in our business and our industry due to a lack of cash flow to finance changes in our business; and |
• | place us at a competitive disadvantage compared to our competitors that have less indebtedness and thus greater resources to devote to upgrading their technology, increasing their product offerings and expanding their businesses. |
The new notes and the guarantees rank behind our and our subsidiary guarantors’ senior indebtedness. |
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continuing under our senior indebtedness and payments to you may be suspended for up to 179 consecutive days if a nonpayment default exists under our senior indebtedness.
The indenture and our credit facility impose significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some corporate actions.
• | incur additional indebtedness or liens; |
• | pay dividends or make other distributions; |
• | repurchase our capital stock; |
• | make investments; |
• | sell assets; |
• | enter into agreements restricting our subsidiaries’ ability to pay dividends; |
• | engage in transactions with affiliates; and |
• | consolidate, merge or sell all or substantially all of our assets. |
Our credit facility requires us to maintain compliance with the following financial ratios:
• | a maximum consolidated total leverage ratio equal to or less than 3.25:1.00, 2.75:1.00 beginning on February 28, 2004 and 2.50:1.00 beginning on August 31, 2004; |
• | a maximum consolidated senior leverage ratio equal to or less than 1.75:1.00 and 1.40:1.00 beginning on August 31, 2003; and |
• | a minimum consolidated fixed charge coverage ratio equal to or greater than 1.40:1.00, 1.50:1.00 beginning on August 31, 2004 and 1.75:1.00 beginning on August 31, 2005. |
Fraudulent conveyance laws may permit courts to void the subsidiary guarantees of the new notes in specific circumstances, which would interfere with the payment of the subsidiary guarantees. |
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• | incurred the guarantee with the intent of hindering, delaying or defrauding current or future creditors; or |
• | received less than reasonably equivalent value or fair consideration for incurring the guarantee, and |
• | was insolvent or was rendered insolvent by reason of the incurrence; |
• | was engaged, or about to engage, in a business or transaction for which the assets remaining with it constituted unreasonably small capital to carry on such business; |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay as those debts matured; or |
• | was a defendant in an action for money damages, or had a judgment for money damages entered against it, if, in either case, after final judgment the judgment was unsatisfied. |
• | the sum of the debtor’s debts and liabilities, including contingent liabilities, was greater than the debtor’s assets at fair valuation; or | |
• | the present fair saleable value of the debtor’s assets was less that the amount required to pay the probable liability on the debtor’s total existing debts and liabilities, including contingent liabilities, as they became absolute and matured. |
An active trading market for the new notes may not develop, which could reduce their value. |
If you do not exchange your old notes for new notes, you will continue to have restrictions on your ability to resell them. |
We may be unable to repurchase the new notes upon a change of control as required by the indenture. |
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indebtedness (including indebtedness under our credit facility) or obtain the required consents from the holders of our senior indebtedness to allow us to repurchase the notes. In such circumstances, we cannot assure you that we would have sufficient funds available to repay all of our senior indebtedness and any other indebtedness that would become payable upon a change of control and to repurchase all of the new notes at the required premium. Our failure to purchase the notes would be a default under the indenture, which would in turn be a default under our credit facility.
Risk Factors Relating to Our Business |
We face intense competition in our business. |
We may lose customers or revenue due to consolidation in the healthcare industry. |
Our results of operations may suffer if we are unable to continue our expansion in new and existing markets. |
Defaults in payment or a material reduction in purchases of our products by large customers could have a significant negative impact on our financial condition, results of operations and liquidity. |
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these large customers could have a significant negative impact on our financial condition, results of operations and liquidity.
We may spend significant resources developing and promoting new products that may not meet the demands of our customers. |
Interruptions may occur in some of our information services. |
Proprietary technology protections may not be adequate and our proprietary rights may infringe on rights of third parties. |
We may not successfully integrate recent and future acquisitions and strategic relationships. |
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growth, profitability or productivity comparable with those achieved by our existing operations, or otherwise not perform as expected, may adversely impact our revenue and increase our costs.
Complex state and federal regulations could depress the demand for information products and we could incur redesign costs or be subject to penalties. |
HIPAA Administrative Simplification |
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compliance with these standards. The privacy standards rule applies to the portions of our business that process healthcare transactions and provide technical services to other participants in the healthcare industry. This rule provides for civil and criminal liability for violations, and requires us, our customers and our partners to use health information in a highly restricted manner, to establish policies and procedures to safeguard the information, and may require us to obtain individual authorizations and acknowledgements in some cases, and to provide certain access and other rights to individuals. We are currently taking action to implement the privacy standards by the compliance date. However, this rule may require us to incur significant costs to change our systems and services, and may restrict the manner in which we transmit and use the information. In addition, our provider or payer customers may elect to transmit information directly without using a clearinghouse, or may restrict our access to information needed to support our information services business. Each of these events could adversely affect our operations.
International Data Regulation |
Regulation of Healthcare Relationships |
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Changes in the United States healthcare environment could negatively impact our business, financial condition and results of operations. |
Unanticipated changes in our accounting policies may be required because of mandates by standards setting organizations and could have a material impact on our financial statements. |
If we need to obtain additional capital to continue our growth and expansion, we may be subject to additional debt financing risks. |
If we lose the tax-free status of the recent spin-off, we could be subject to substantial tax liability. |
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excess of the fair market value of our common stock distributed to our stockholders over our tax basis in the stock. In addition, each of our stockholders who received Global Payments, Inc. common stock in the distribution would generally be treated as receiving a taxable distribution in an amount equal to the fair market value of the stock.
FORWARD-LOOKING STATEMENTS
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RATIO OF EARNINGS TO FIXED CHARGES
(1) | earnings means: |
• | income before income taxes, equity in losses of affiliated companies, plus |
• | minority interest and fixed charges; and |
(2) | fixed charges means: |
• | interest expense, plus |
• | the interest component of rent, plus |
• | the amortization of capitalized expenses related to indebtedness. |
(earnings) + (fixed charges)
fixed charges
Fiscal Year | ||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | ||||||||||||
Ratio of earnings to fixed charges | 5.89 | 1.06 | 4.64 | 3.54 |
USE OF PROCEEDS
• | to repay all borrowings outstanding under our old credit agreement; |
• | to redeem all of our outstanding 5% convertible subordinated notes due 2003; and |
• | for general corporate purposes. |
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CAPITALIZATION |
May 30, 2003 | ||||
(in thousands) | ||||
Cash and cash equivalents | $ | |||
Restricted cash | ||||
Total cash and cash equivalents | $ | |||
Long-term debt: | ||||
Term loan — long term portion | ||||
Revolving credit facility (1) | ||||
10½% senior subordinated notes due 2012 | ||||
Obligations under capital leases | ||||
Other long-term obligations | ||||
Term loan-current portion | ||||
Current portion of other long-term debt | ||||
Current portion of obligations under capital leases | ||||
Total debt | ||||
Stockholders’ equity: | ||||
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued | ||||
Common stock, $.125 par value; 200,000,000 shares authorized; issued and outstanding (2) | ||||
Capital in excess of par value | ||||
Retained earnings | ||||
Deferred compensation and other | ||||
Accumulated and other comprehensive loss | ||||
Total stockholders’ equity | ||||
Total debt and stockholders’ equity | $ | |||
(1) | As of , 2003, we had $ million of available borrowings under this facility. |
(2) | Does not include shares of common stock reserved for issuance upon exercise of employee stock options outstanding at , 2003. |
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer |
Resale of the New Notes |
We base our view on interpretations by the staff of the SEC in no-action letters issued to other issuers in exchange offers like ours. However, we have not asked the SEC to consider this particular exchange offer in the context of a no-action letter. Therefore, you cannot be sure that the SEC will treat it in the same way it has treated other exchange offers in the past.
A broker-dealer that has acquired old notes as a result of market making or other trading activities has to deliver a prospectus in order to resell any new notes it receives for its own account in the exchange offer. This prospectus may be used by such a broker-dealer to resell any of its new notes. See “Plan of Distribution” for more information regarding broker-dealers.
Terms of the Exchange Offer |
• | the new notes will be registered under the Securities Act and, therefore, the new notes will not bear legends restricting the transfer of the new notes, and |
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• | holders of the new notes will not be entitled to any of the registration rights of holders of old notes under the registration rights agreement, which rights will terminate upon the consummation of the exchange offer, or to the penalty interest provisions of the registration rights agreement. |
Expiration Date; Extensions; Amendments |
• | notify the exchange agent of any extension by oral or written communication; |
• | issue a press release or other public announcement, which will report the approximate number of old notes deposited, before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. |
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• | to delay accepting any old notes, |
• | to amend the terms of the exchange offer in any manner, |
• | to extend the exchange offer, or |
• | if, in the opinion of our counsel, the consummation of the exchange offer would violate any law or interpretation of the staff of the SEC, to terminate or amend the exchange offer by giving oral or written notice to the exchange agent. |
Interest on the New Notes |
Procedures for Tendering Old Notes |
• | complete and sign the letter of transmittal or send a timely confirmation of a book-entry transfer of old notes to the exchange agent, |
• | have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal, and |
• | mail or deliver the required documents to the exchange agent at its address set forth in the letter of transmittal for receipt on or before the expiration date. |
• | certificates for old notes must be received by the exchange agent along with the letter of transmittal; |
• | a timely confirmation of a book-entry transfer of old notes into the exchange agent’s account at DTC, pursuant to the procedure for book-entry transfer described below, must be received by the exchange agent before the expiration date; or |
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• | you must comply with the procedures described below under “—Guaranteed Delivery Procedures.” |
• | you tender your old notes as the registered holder (a registered holder includes any participant in DTC whose name appears on a security listing as the owner of old notes), and the new notes to be issued in exchange for your old notes are to be issued in your name and delivered to you at your registered address appearing on the security register for the old notes, or |
• | you surrender your old notes for the account of an eligible institution. |
• | 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” as defined by Rule 17Ad-15 under the Exchange Act. |
• | the exchange agent receives a properly completed and signed letter of transmittal accompanied by the tendered old notes or a confirmation of book-entry transfer of such old notes into the exchange agent’s account at DTC with an agent’s message, or | |
• | the exchange agent receives a notice of guaranteed delivery from an eligible institution. |
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Our 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, you must cure any defects or irregularities in connection with surrenders of old notes on or prior to the expiration date. Although we intend to notify holders of defects or irregularities in connection with surrenders of old notes, neither we, the exchange agent, nor anyone else will incur any liability for failure to give that notice. Surrenders of old notes will not be deemed to have been validly made until any defects or irregularities have been cured or waived.
• | you have full power and authority to tender, exchange, assign, and transfer the old notes surrendered, |
• | we will acquire good title to the old notes being surrendered, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sale agreements, or other obligations relating to their sale or transfer, and not subject to any adverse claim when we accept the old notes, |
• | you are acquiring the new notes in the ordinary course of your business, |
• | you are not engaging in and do not intend to engage in a distribution of the new notes, |
• | you have no arrangement or understanding with any person to participate in the distribution of the new notes, |
• | you acknowledge and agree that if you are a broker-dealer registered under the Exchange Act or you are participating in the exchange offer for the purpose of distributing the new notes, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale of the new notes, and that you cannot rely on the position of the SEC’s staff set forth in their no-action letters, |
• | you understand that a secondary resale transaction described above and any resales of new notes obtained by you in exchange for old notes acquired by you directly from us should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K of the SEC, and |
• | you are not an “affiliate,” as defined in Rule 405 under the Securities Act, of us or any of the subsidiary guarantors, or, if you are an “affiliate,” that you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. |
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Return of Old Notes |
Book Entry Transfer |
Guaranteed Delivery Procedures |
• | you surrender your notes through an eligible institution; |
• | on or before the expiration date, the exchange agent receives from the eligible institution a properly completed and duly executed notice of guaranteed delivery substantially in the form provided by us, by mail or hand delivery, showing the name and address of the holder, the name(s) in which the old notes are registered, the certificate number(s) of the old notes, if applicable, and the principal amount of old notes surrendered; the notice of guaranteed delivery must state that the surrender is being made by the notice of guaranteed delivery and guaranteeing that, within five New York Stock Exchange trading days after the expiration date, the letter of transmittal, together with the certificate(s) representing the old notes, in proper form for transfer, or a book-entry confirmation with an agent’s message, as the case may be, and any other required documents, will be delivered by the eligible institution to the exchange agent, and |
• | the properly executed letter of transmittal, as well as the certificate(s) representing all surrendered old notes, in proper form for transfer, or a book-entry confirmation with an agent’s message, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within five New York Stock Exchange trading days after the expiration date. |
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Withdrawals of Tenders of Old Notes |
• | specify the name of the person having deposited the old notes to be withdrawn, |
• | identify the old notes to be withdrawn, including the certificate number or numbers, if applicable, and principal amount of the old notes, |
• | contain a statement that the holder is withdrawing the election to have the old notes exchanged, |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal used to surrender the old notes, and |
• | specify the name in which any old notes are to be registered, if different from that of the registered holder of the old notes and, unless the old notes were tendered for the account of an eligible institution, the signatures on the notice of withdrawal must be guaranteed by an eligible institution. If old notes have been surrendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC. |
Additional Obligations |
Conditions of the Exchange Offer |
• | any statute, rule, or regulation has been enacted or any action has been taken by any court or governmental authority that seeks to or would prohibit, restrict, otherwise render consummation of the exchange offer illegal; or |
• | any change, or any development that would cause a change, in our business or financial affairs has occurred that might materially impair our ability to proceed with the exchange offer or a change that would materially impair the contemplated benefits to us of the exchange offer; or |
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• | a change occurs in the current interpretations by the staff of the SEC that might materially impair our ability to proceed with or complete the exchange offer. |
If we determine that any of the above conditions is not satisfied, we may:
• | refuse to accept any old notes and return all surrendered old notes to the surrendering holders, |
• | extend the exchange offer and retain all old notes surrendered on or before the expiration date, subject to the holders’ right to withdraw the surrender of the old notes, or |
• | waive any unsatisfied conditions regarding the exchange offer and accept all properly surrendered old notes that have not been withdrawn. If we waive any condition, we will promptly disclose the waiver by means of a prospectus supplement that will be distributed to the registered holders of the old notes, and we will extend the exchange offer for at least five business days, if the exchange offer would have otherwise expired. |
By Mail: |
Regions Bank Corporate Trust Department 60 Commerce Street Second Floor Montgomery, Alabama 36104 |
For Information or to Confirm by Telephone: |
(334) 230-6119 Attn: JoAnn Mayfield |
Fees and Expenses |
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those taxes or exemption from payment of those taxes with the letter of transmittal, the amount of those transfer taxes will be billed directly to you.
Consequences of Failure to Exchange |
• | to us or to any of our subsidiaries, |
• | inside the United States to a qualified institutional buyer in compliance with Rule 144A under the Securities Act, |
• | inside the United States to an institutional accredited investor that, before the transfer, furnishes to the trustee a signed letter containing certain representations and agreements relating to the restrictions on transfer of the old notes, the form of which you can obtain from the trustee and, if such transfer is in respect of an aggregate principal amount of old notes at the time of transfer of less than $100,000, an opinion of counsel acceptable to us that the transfer complies with the Securities Act, |
• | outside the United States in compliance with Rule 904 under the Securities Act, |
• | pursuant to the exemption from registration provided by Rule 144 under the Securities Act, if available, or |
• | pursuant to an effective registration statement under the Securities Act. |
Accounting Treatment |
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DESCRIPTION OF OTHER INDEBTEDNESS
Credit Facility |
• | a six year $125 million term loan; and |
• | a five year $100 million revolving credit facility. |
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DESCRIPTION OF THE NEW NOTES
General |
Optional Redemption |
Year | Redemption Price | |||
2007 | 105.250% | |||
2008 | 103.500% | |||
2009 | 101.750% | |||
2010 and thereafter | 100.000% |
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however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in The City of New York (a “Primary Treasury Dealer”), we shall substitute therefor another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by us.
Sinking Fund |
Guarantees |
(1) upon any sale, exchange or transfer to any person (other than to us or an Affiliate of our company) of all Equity Interests owned by our company or any Restricted Subsidiary in, or all or substantially all the assets of, such subsidiary guarantor (including by way of merger or consolidation) if the transaction complies with the terms of the indenture;
(2) upon the designation of such subsidiary guarantor as an Unrestricted Subsidiary in compliance with the terms of the indenture;
(3) at such time as such subsidiary guarantor is no longer a guarantor under our Senior Credit Agreement;
(4) upon the legal defeasance of the notes as described under “—Defeasance or Covenant Defeasance of Indenture”; or
(5) in connection with the merger or dissolution of a subsidiary guarantor into us or another subsidiary guarantor.
Any release of a subsidiary guarantor’s note guarantee pursuant to clause (3) above will constitute an incurrence of Indebtedness by such subsidiary at the time of such release in the amount of any outstanding Indebtedness incurred by such subsidiary guarantor pursuant to the covenant described under “—Certain Covenants—Limitation on Indebtedness.”
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Ranking |
• | any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to us or to our assets; |
• | any liquidation, dissolution or other winding-up of our company, whether voluntary or involuntary; or | |
• | any assignment for the benefit of creditors or other marshaling of our assets or liabilities; |
the holders of Senior Indebtedness or their duly appointed representative(s) will be entitled to receive payment in full in cash of all Senior Indebtedness before the holders of notes will be entitled to receive any payment with respect to the notes or under the indenture or any payment by us to acquire any notes (other than any payment in the form of equity securities or debt securities that rank junior in right of payment to all Senior Indebtedness then outstanding at least to the same extent as the notes (such securities hereinafter being “Permitted Junior Securities”) and any payment made pursuant to the provisions described under “—Defeasance or Covenant Defeasance of Indenture”). Any payment or other amount (other than a payment in the form of Permitted Junior Securities and payments made pursuant to the provisions described under “—Defeasance or Covenant Defeasance of Indenture”) to which the holders of the notes would be entitled but for the provisions of the indenture relating to subordination shall be paid directly to the holders of Senior Indebtedness or their duly appointed representative(s) to the extent necessary to repay in full in cash all Senior Indebtedness.
• | the payment default has been cured or waived, or ceases to exist; or |
• | such Designated Senior Indebtedness has been discharged or paid in full in cash. |
• | 179 days after the trustee receives such notice; |
• | the date on which the Non-Payment Default is cured or waived, or ceases to exist; |
• | the date on which the Designated Senior Indebtedness is discharged or paid in full in cash; and | |
• | the date on which such Payment Blockage Period is terminated by written notice to the trustee or us from such holders or their duly appointed representative(s) initiating such Payment Blockage Period. |
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(1) all our obligations, now or hereafter existing, under or in respect of the Senior Credit Agreement, whether for principal, premium, if any, interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against us under Bankruptcy Law, at the rate provided in the document with respect thereto, whether or not such interest is allowed as a claim after such filing in any proceeding under such law) and other amounts due in connection therewith (including, without limitation, any fees, premiums, expenses, reimbursement obligations with respect to letters of credit and indemnities); and
(2) the principal of, premium, if any, and interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against us under Bankruptcy Law, at the rate provided in the document with respect thereto, whether or not such interest is allowed as a claim after such filing in any proceeding under such law) on all other Indebtedness of our company (other than the notes), whether outstanding on the date of the indenture or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the notes.
• | Indebtedness evidenced by the notes; |
• | Indebtedness of our company that is expressly subordinated in right of payment to any Indebtedness of our company; |
• | Indebtedness of our company that by operation of law is subordinate to any general unsecured obligations of our company; |
• | Indebtedness of our company to the extent incurred in violation of any covenant prohibiting the incurrence of Indebtedness under the indenture; |
• | any liability for federal, state or local taxes or other taxes, owed or owing by us; |
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• | accounts payable or other liabilities owed or owing by us to trade creditors (including guarantees thereof or instruments evidencing such liabilities), including all of our obligations arising in connection with the Agreement and Plan of Merger, dated as of May 28, 2002, among our company, NDC Acquisition Corp. and TechRx Incorporated; |
• | amounts owed by us for compensation to employees or for services rendered to us; |
• | Indebtedness of our company to any Subsidiary or any other Affiliate of our company or any of such Affiliate’s Subsidiaries; |
• | our Equity Interests; |
• | Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari Passu Indebtedness; and | |
• | Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without recourse to us or any Restricted Subsidiary. |
Any Indebtedness incurred pursuant to clause (1) of the definition of “Permitted Indebtedness” will not be deemed to be incurred in violation of the covenant described under “—Certain Covenants—Limitation on Indebtedness.”
(1) all Senior Indebtedness under the Senior Credit Agreement; and
(2) any other Senior Indebtedness which, at the time of determination, has an aggregate principal amount outstanding of at least $20.0 million and that has been specifically designated in the instrument evidencing such Senior Indebtedness as our “Designated Senior Indebtedness.”
(1) all obligations of a subsidiary guarantor, now or hereafter existing, under or in respect of the Senior Credit Agreement, whether for principal, premium, if any, interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against such subsidiary guarantor under Bankruptcy Law, whether or not such interest is allowed as a claim after such filing in any proceeding under such law) and other amounts due in connection therewith (including, without limitation, any fees, premiums, expenses, reimbursement obligations with respect to letters of credit and indemnities); and
(2) the principal of, premium, if any, and interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against such subsidiary guarantor under Bankruptcy Law, whether or not such interest is allowed as a claim after such filing in any proceeding under such law) on all other Indebtedness of such subsidiary guarantor (other than the note guarantee of such subsidiary guarantor), whether outstanding on the date of the indenture or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to such note guarantee.
• | Indebtedness evidenced by the note guarantee of such subsidiary guarantor; |
• | Indebtedness of such subsidiary guarantor that is expressly subordinated in right of payment to any Indebtedness of such subsidiary guarantor; |
• | Indebtedness of such subsidiary guarantor that by operation of law is subordinate to any general unsecured obligations of such subsidiary guarantor; |
• | Indebtedness of such subsidiary guarantor to the extent incurred in violation of any covenant prohibiting the incurrence of Indebtedness under the indenture; |
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• | any liability for federal, state or local taxes or other taxes, owed or owing by such subsidiary guarantor; |
• | accounts payable or other liabilities owed or owing by such subsidiary guarantor to trade creditors (including guarantees thereof or instruments evidencing such liabilities); |
• | amounts owed by such subsidiary guarantor for compensation to employees or for services rendered to such subsidiary guarantor; |
• | Indebtedness of such subsidiary guarantor to any Subsidiary or any other Affiliate of our company or any of such Affiliate’s Subsidiaries; |
• | Equity Interests of such subsidiary guarantor; |
• | Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari Passu Indebtedness; and | |
• | Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without recourse to such subsidiary guarantor. |
Any Indebtedness of such subsidiary guarantor under or in respect of its guarantee of our Indebtedness incurred pursuant to clause (1) of the definition of “Permitted Indebtedness” will not be deemed to be incurred in violation of the covenant described under “—Certain Covenants—Limitation on Indebtedness.”
• | the aggregate amount of our Senior Indebtedness outstanding was approximately $ million; |
• | the aggregate amount of Subsidiary Guarantor Senior Indebtedness outstanding was approximately $ million; |
• | the aggregate amount of indebtedness and other liabilities of our non-guarantor subsidiaries was approximately $ million; and | |
• | we had no senior subordinated Indebtedness other than the notes and no Subordinated Indebtedness. |
Although the indenture limits the amount of Indebtedness that we and our Restricted Subsidiaries may incur, such Indebtedness may be substantial and all of it may be Senior Indebtedness and Subsidiary Guarantor Senior Indebtedness.
Certain Covenants |
(1) the incurrence of such Indebtedness and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred, and the application of such proceeds occurred, on the first day of such four-quarter period;
(2) the incurrence, repayment or retirement of any other Indebtedness by us and our Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired on the first day of such four-quarter period (except that, in making such computation, the amount of Indebtedness under any revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during such four-quarter period); and
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(3) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by us or our Restricted Subsidiaries, as the case may be, since the first day of such four- quarter period, as if such acquisition or disposition occurred on the first day of such four-quarter period).
(1) declare or pay any dividend on, or make any distribution to direct or indirect holders of, our Equity Interests including, without limitation, any payment in connection with any merger or consolidation involving us or any Restricted Subsidiary which is not a wholly owned Restricted Subsidiary (other than dividends or distributions payable solely in Qualified Equity Interests);
(2) purchase, call for redemption or redeem or otherwise acquire or retire for value, directly or indirectly, any Equity Interests of our company including, without limitation, in connection with any merger or consolidation involving us (other than any Equity Interests owned by us or any wholly owned Restricted Subsidiary);
(3) declare or pay any dividend on, or make any distribution to holders of, Equity Interests of any Restricted Subsidiary (other than (A) Equity Interests of such Restricted Subsidiary or (B) dividends or distributions to us or any of our wholly owned Restricted Subsidiaries or to all holders of Equity Interests of such Restricted Subsidiary on a pro rata basis);
(4) make any principal payment on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Subordinated Indebtedness (other than Indebtedness permitted under clause (4) of the definition of “Permitted Indebtedness”); or
(5) make any Investment (other than any Permitted Investment) in any person;
unless at the time of and after giving effect to a Restricted Payment on a pro forma basis (a) no Default or Event of Default exists, (b) we could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the “Limitation on Indebtedness” covenant and (c) the aggregate amount of all Restricted Payments declared or made after the date of the indenture shall not exceed the sum of:
(A) (x) if our Consolidated Adjusted Net Income and Excess Cash Flow are both positive, 50% of the lesser of our Consolidated Adjusted Net Income and our Excess Cash Flow, (y) if our Consolidated Adjusted Net Income is a loss and Excess Cash Flow is negative, less 100% of the greater in absolute numerical terms of such loss and such negative Excess Cash Flow and (z) if either Consolidated Adjusted Net Income is a loss or Excess Cash Flow is negative, less 100% of such loss or such negative Excess Cash Flow, as the case may be, in each case accrued on a cumulative basis during the period beginning on August 31, 2002 and ending on the last day of our last fiscal quarter ending prior to the date of such proposed Restricted Payment; plus
(B) 100% of the aggregate net proceeds, including the Fair Market Value of property other than cash, received after the date of the indenture by us as a contribution to our common equity capital or from the issuance or sale (other than to any of our Restricted Subsidiaries) of our Qualified Equity
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(Interests (including upon the exercise of options, warrants or rights) or warrants, options or rights to purchase our Qualified Equity Interests (excluding any net cash proceeds from an Equity Offering to the extent used to redeem notes); plus
(C) 100% of the aggregate net proceeds, including the Fair Market Value of property other than cash, received after the date of the indenture by us from the issuance or sale (other than to any of our Restricted Subsidiaries) of debt securities (or other Indebtedness) or Redeemable Equity Interests that have been converted into or exchanged for our Qualified Equity Interests; plus
(D) to the extent that any Investment constituting a Restricted Payment that was made after the date of the indenture is sold or is otherwise liquidated or repaid, an amount (to the extent not included in Consolidated Adjusted Net Income) equal to the lesser of (x) the cash proceeds with respect to such Investment (less the cost of disposition of such Investment and net of taxes) and (y) the initial amount of such Investment plus, to the extent not included in Consolidated Adjusted Net Income, 50% of any amounts received in excess of the return of capital (less the cost of disposition of such Investment and net of taxes); plus
(E) an amount equal to the sum of (x) the net reduction in Investments in Unrestricted Subsidiaries resulting from cash dividends, repayments of loans or advances or other transfers of assets, in each case to us or any Restricted Subsidiary from Unrestricted Subsidiaries, plus (y) the portion (proportionate to our equity interest in such Subsidiary) of the Fair Market Value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary, in each case since the Issuance Date; provided, however, that the foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made (and treated as a Restricted Payment) by us or any Restricted Subsidiary in any such Unrestricted Subsidiary; provided further, however, that no amount will be included under this clause (E) to the extent it is already included in our Consolidated Adjusted Net Income in clause (A) above.
(1) the payment of any dividend or redemption of any Equity Interest within 60 days after the date of declaration or call for redemption thereof, if at such date of declaration or call for redemption, such payment or redemption would have complied with the provisions of the paragraph above;
(2) the purchase, redemption or other acquisition or retirement for value of our Equity Interests in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Restricted Subsidiary of our company) of, our Qualified Equity Interests;
(3) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Restricted Subsidiary of our company) of, our Qualified Equity Interests;
(4) the purchase, redemption or other acquisition or retirement for value of our outstanding 5% convertible subordinated notes due 2003;
(5) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness (other than Redeemable Equity Interests) in exchange for, or out of the net cash proceeds of a substantially concurrent incurrence (other than to a Subsidiary of our company) of, new Subordinated Indebtedness so long as (x) the principal amount of such new Subordinated Indebtedness does not exceed the principal amount of the Indebtedness being so purchased, redeemed, defeased, acquired or retired, plus the amount of any premium reasonably determined as necessary to accomplish such refinancing, plus, the amount of our reasonable expenses incurred in connection with such refinancing, (y) such new Subordinated Indebtedness is pari passu or subordinated, as applicable, to the notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, defeased, acquired or retired and (z) such new Subordinated Indebtedness has an average life longer than
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the Average Life of the notes and a final Stated Maturity of principal later than the final Stated Maturity of principal of the notes;
(6) payments or distributions to stockholders pursuant to appraisal rights required under applicable law in connection with any consolidation, merger or transfer of assets that complies with the covenant described under “—Merger, Consolidation or Sale of Assets”;
(7) Investments acquired as a result of the capital contribution or in exchange for, or out of the proceeds of a substantially concurrent offering of, our Qualified Equity Interests;
(8) (a) repurchases, redemptions, acquisitions or retirements of our or any Restricted Subsidiary’s Qualified Equity Interests from employees, former employees, directors or former directors of our company or any of our Restricted Subsidiaries or their authorized representatives upon the death, disability or termination of employment of such employees, former employees, directors or former directors or (b) repurchases of our Equity Interests deemed to occur upon (x) the exercise of stock options if such Equity Interests represent a portion of the exercise price thereof and (y) the withholding of a portion of our Equity Interests granted or awarded to an employee to pay taxes associated therewith; provided, however, that the aggregate amount paid for all repurchased, redeemed, acquired or retired Qualified Equity Interests does not exceed $4.0 million during any twelve-month period; and
(9) Restricted Payments in addition to those permitted by clauses (1)-(8) of this paragraph in an aggregate amount not to exceed $5.0 million.
The actions described in clauses (1), (2), (3), (6), (7) and (8) of this paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with this paragraph but shall reduce the amount that would otherwise be available for Restricted Payments under clause (c) of the foregoing paragraph and the actions described in clauses (4), (5) and (9) of this paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with this paragraph, but shall not reduce the amount that would otherwise be available for Restricted Payments under clause (c) of the foregoing paragraph.
• | the issuance, sale, transfer, lease, conveyance, or other disposition of all, but not less than all, of the issued and outstanding Equity Interests of any Restricted Subsidiary owned by us or any of our Restricted Subsidiaries in compliance with the other provisions of the indenture, so long as the Net Cash Proceeds, if any, from such sale, transfer, lease, conveyance or other disposition are applied in accordance with the “Limitation on Sale of Assets” covenant; |
• | the ownership by other persons of Qualified Equity Interests issued prior to the time such Restricted Subsidiary became a Subsidiary of our company that was neither issued in contemplation of such Restricted Subsidiary becoming a Subsidiary nor acquired at the time; |
• | the ownership by directors of director qualifying shares or the ownership by foreign nationals of Equity Interests of any Restricted Subsidiary, to the extent mandated by applicable law; |
• | arrangements existing on the Issuance Date; |
• | any issuance, sale, transfer, lease, conveyance or other disposition of Equity Interests (other than Preferred Stock) of a Restricted Subsidiary if, immediately after giving effect thereto, such Restricted |
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Subsidiary would remain a Restricted Subsidiary or the ownership by any person of such Equity Interests; or |
• | any issuance, sale, transfer, lease, conveyance or other disposition of Equity Interests of a Restricted Subsidiary if, immediately after giving effect thereto, such person would no longer constitute a Restricted Subsidiary and any Investment in such person remaining after giving effect thereto would have been permitted to be made (and shall be deemed to have been made) under the “Limitation on Restricted Payments” covenant on the date of such issuance, sale or other disposition. |
(1) such transaction or series of transactions are on terms that are no less favorable to us or such Restricted Subsidiary, as the case may be, than would have been able to be obtained at the time for a comparable transaction in arm’s-length dealings with third-parties that are not Interested Persons;
(2) with respect to any transaction or series of related transactions involving aggregate value equal to or greater than $5.0 million, we shall have delivered an officers’ certificate to the trustee certifying that such transaction or series of transactions complies with clause (1) above; and
(3) with respect to any transaction or series of related transactions involving aggregate value equal to or greater than $10.0 million, such transaction or series of related transactions shall have been approved by our Board of Directors (including a majority of our Disinterested Directors), or we shall have obtained a written opinion from an Independent Financial Advisor certifying that such transaction or series of related transactions is fair to us or our Restricted Subsidiary, as the case may be, from a financial point of view;
provided, however, that this covenant will not restrict
• | directors’ fees, indemnification and similar arrangements, consulting fees, employee salaries, bonuses or employment agreements, compensation or employee benefit arrangements and incentive arrangements with any officer, director or employee of our company or a Restricted Subsidiary entered into in the ordinary course of business and approved by our Board of Directors (including a majority of our Disinterested Directors) or the Compensation Committee thereof; |
• | any transactions made in compliance with the “Limitation on Restricted Payments” covenant; |
• | loans and advances to officers, directors and employees of our company or any Restricted Subsidiary in the ordinary course of business and approved by our Board of Directors (including a majority of our Disinterested Directors) or the Compensation Committee thereof; |
• | transactions pursuant to or contemplated by any agreement as in effect as of the Issuance Date or any amendment thereto so long as any such amendment is not more disadvantageous to the holders in any material respect than the original agreement as in effect on the Issuance Date; |
• | guarantees of the subsidiary guarantors of Indebtedness incurred pursuant to clause (1) of the definition of “Permitted Indebtedness”; |
• | contracts pursuant to which our company or a wholly owned Restricted Subsidiary provides management services to an Affiliate in exchange for payments in cash or Cash Equivalents that are no less favorable to us or such wholly owned Restricted Subsidiary than those that could reasonably be obtained in a comparable transaction at such time on an arm’s-length basis from a person that is not an Affiliate of our company or such wholly owned Restricted Subsidiary; |
• | any issuance or sale of our Qualified Equity Interests to Affiliates; or |
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• | in the case of joint ventures in which we or any Restricted Subsidiary has an interest, so long as the other parties to the joint venture that are not our Affiliates own at least 50% of the Equity Interests of such joint venture, transactions between such joint venture and us or any Restricted Subsidiary. |
• | in the case of any Lien securing Pari Passu Indebtedness, the notes or the note guarantees, as the case may be, are secured by a Lien on such property, assets or proceeds that is senior in priority to or pari passu with such Lien; and | |
• | in the case of any Lien securing Subordinated Indebtedness, the notes or the note guarantees, as the case may be, are secured by a Lien on such property, assets or proceeds that is senior in priority to such Lien. |
• | the purchase price and purchase date, which shall be no earlier than 30 days nor more than 60 days from the date the notice is mailed, or such later date as required by law; |
• | that any note not tendered will continue to accrue interest; |
• | that, unless we default in the payment of the purchase price, any notes accepted for payment pursuant to the offer shall cease to accrue interest after the purchase date; and | |
• | certain procedures that a holder of notes must follow to accept the offer or to withdraw such acceptance. |
• | accept for payment all notes or portions thereof properly tendered pursuant to the offer, |
• | deposit with the paying agent an amount equal to the purchase price in respect of all notes or portions thereof so tendered and | |
• | deliver or cause to be delivered to the trustee the notes so accepted together with an officer’s certificate stating the aggregate principal amount of notes or portions thereof being purchased by us. |
The paying agent will promptly mail to each holder of notes so tendered the purchase price 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; provided that each such new note will be in a principal amount of $1,000 or an integral multiple thereof. We will publicly announce the results of the Change in Control offer on or as soon as practicable after the purchase date. We shall not be required to make a Change in Control offer upon a Change in Control if a third party makes the offer in the manner, at the time and otherwise in compliance with the requirements applicable to a Change in Control Offer made by us and purchases all notes validly tendered and not withdrawn under such Change in Control Offer.
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• | the consideration received by us or such Restricted Subsidiary at the time of such Asset Sale is not less than the Fair Market Value of the assets sold or disposed of; and | |
• | at least 75% of such consideration consists of cash, Cash Equivalents and/or Replacement Assets. |
(1) permanently repay or prepay any then outstanding Senior Indebtedness of our company or any Restricted Subsidiary (and if such Senior Indebtedness is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto); or
(2) invest (or enter into a legally binding agreement to invest) in Replacement Assets.
Pending the final application of any such Net Cash Proceeds, we may temporarily reduce Senior Indebtedness or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the indenture. If any such legally binding agreement to invest such Net Cash Proceeds is terminated, then we may, within 90 days of such termination or within 12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in clause (1) or (2) (without regard to the parenthetical contained in such clause (2) above). The amount of such Net Cash Proceeds not so used as set forth above in this paragraph constitutes “Excess Proceeds.”
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(1) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the indenture providing for a guarantee of the notes on the same terms as the guarantee of such Indebtedness, except that if such Indebtedness is unsubordinated such Restricted Subsidiary’s note guarantee with respect to such Indebtedness may be subordinated to that Restricted Subsidiary’s guarantee of such Indebtedness to the same extent as the notes are subordinated to such Indebtedness and if such Indebtedness is by its terms expressly subordinated to the notes, any such assumption, guarantee or other liability of such Restricted Subsidiary with respect to such Indebtedness shall be subordinated to such Restricted Subsidiary’s note guarantee at least to the same extent as the notes are subordinated to our Senior Indebtedness under the indenture; and
(2) such Restricted Subsidiary waives, and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against us or any of our other Subsidiaries as a result of any payment by such Restricted Subsidiary under its note guarantee.
• | upon any sale, exchange or transfer to any person not an Affiliate of our company of all Equity Interests owned by our company or any Restricted Subsidiary in, or all or substantially all of the assets of such Restricted Subsidiary (including by way of merger or consolidation) if the transaction complies with the terms of the indenture; |
• | upon the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the terms of the indenture; |
• | upon the legal defeasance of the notes as described under “—Defeasance or Covenant Defeasance of Indenture”; |
• | in connection with the merger or dissolution of a subsidiary guarantor into us or another subsidiary guarantor; or |
• | upon the release by the holders of our Indebtedness described above of their guarantee by such Restricted Subsidiary (including any deemed release upon payment in full of all obligations under such Indebtedness other than as a result of payment under such guarantee), at such time as (A) no other Pari Passu Indebtedness or Subordinated Indebtedness of our company has been secured or guaranteed |
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by such Restricted Subsidiary, as the case may be, or (B) the holders of all such other Pari Passu Indebtedness and Subordinated Indebtedness which is guaranteed by such Restricted Subsidiary also release their guarantee by such Restricted Subsidiary (including any deemed release upon payment in full of all obligations under such Indebtedness other than as a result of payment under such guarantee). |
• | pay dividends, in cash or otherwise, or make any other distributions on its Equity Interests; |
• | pay any Indebtedness owed to us or any other Restricted Subsidiary; |
• | make loans or advances to us or any other Restricted Subsidiary; or |
• | transfer any of its properties or assets to us or any other Restricted Subsidiary, |
(1) applicable law;
(2) customary provisions restricting subletting or assignment of any lease or assignment of any other contract to which our company or any Restricted Subsidiary is a party or to which any of their respective properties or assets are subject;
(3) any agreement or other instrument of a person acquired by us or any Restricted Subsidiary in existence at the time of such acquisition (but not created in contemplation thereof), 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, so long as the agreement containing such restriction does not violate any other provision of the indenture;
(4) encumbrances and restrictions in any agreement or instrument in effect on the Issuance Date, including, without limitation, pursuant to the Senior Credit Agreement and its related documentation, the notes, the indenture and the note guarantees;
(5) any encumbrance or restriction contained in contracts for sales of assets permitted by the “Limitation on Sales of Assets” covenant with respect to the assets to be sold pursuant to such contract;
(6) in the fourth bullet above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary permitted under the indenture to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages;
(7) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on that property of the nature described in the fourth bullet of the preceding paragraph;
(8) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;
(9) Liens securing Indebtedness otherwise permitted to be incurred under the “Limitation on Liens” covenant that limit the right of the debtor to dispose of the assets subject to such Liens;
(10) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;
(11) any agreement or instrument governing Indebtedness incurred by foreign Restricted Subsidiaries pursuant to clause (12) of the definition of “Permitted Indebtedness”; or
(12) any encumbrance or restriction existing under any agreement or instrument that extends, renews, refinances or replaces the agreements or instrument containing the encumbrances or restrictions in the foregoing clauses (3) and (4); provided that the terms and conditions of any such encumbrances or
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restrictions are not materially more restrictive, taken as a whole, than those under or pursuant to the agreement or instrument so extended, renewed, refinanced or replaced.
(1) no Default exists at the time of or after giving effect to such designation;
(2) we would be permitted to make an Investment (other than a Permitted Investment) at the time of such designation pursuant to the first paragraph of the “Limitation on Restricted Payments” covenant of an amount equal to the Fair Market Value of our interest in such Subsidiary;
(3) such Unrestricted Subsidiary does not own any Equity Interests in any Restricted Subsidiary which is not simultaneously being designated an Unrestricted Subsidiary;
(4) no default with respect to any Indebtedness of such Unrestricted Subsidiary (other than a note guarantee, if any) would permit (upon notice, lapse or otherwise) any holder of any other Indebtedness of our company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment to be accelerated or payable prior to its Stated Maturity; and
(5) such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with us or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to us or such Restricted Subsidiary than those that might be obtained at the time from persons who are not Affiliates of our company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary shall be deemed a Restricted Payment.
• | have any obligation to subscribe for additional Equity Interests or other equity interest in such Unrestricted Subsidiary; |
• | have any obligation to maintain or preserve such Unrestricted Subsidiary’s financial condition or to cause such Unrestricted Subsidiary to achieve certain levels of operating results; or |
• | be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary. |
For purposes of the foregoing, the designation of a Subsidiary of our company as an Unrestricted Subsidiary shall be deemed to be the designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries.
(1) no Default would exist after giving effect to such revocation; and
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(2) all Liens and Indebtedness of such redesignated Subsidiary outstanding immediately following such revocation would, if incurred at the time of such revocation, have been permitted to be incurred for all purposes of the indenture.
Consolidation, Merger and Sale of Assets |
(1) either:
(A) we will be the continuing corporation; or
(B) the person formed by or surviving such consolidation or merger or the person that acquires by sale, assignment, conveyance, transfer, lease or disposition all or substantially all the properties and assets of our company and our Restricted Subsidiaries on a consolidated basis:
• | will be a corporation duly organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia; and |
• | will expressly assume, by a supplemental indenture in form reasonably satisfactory to the trustee, our obligation for the due and punctual payment of the principal of, premium, if any, and interest on all the notes and the performance and observance of every covenant of the indenture and the registration rights agreement on our part to be performed or observed; |
(2) at the time of and after giving effect to such transaction or series of transactions on a pro forma basis, no Default or Event of Default exists;
(3) at the time of and after giving effect to such transaction or series of transactions on a pro forma basis, we could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of the covenant described under “—Certain Covenants—Limitation on Indebtedness”; and
(4) each subsidiary guarantor, if any, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its note guarantee will apply to such person’s obligations under the indenture and the notes.
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consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition, and if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with the requirements of the indenture and that all conditions precedent provided for in the indenture relating to such transaction have been complied with.
(1) either:
(A) such subsidiary guarantor shall be the continuing corporation or partnership; or
(B) the person (if other than such subsidiary guarantor) formed by such consolidation or into which such subsidiary guarantor is merged or the entity which acquires by sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of such subsidiary guarantor, as the case may be:
• | will be a corporation or partnership organized and validly existing under the laws of the United States, any state thereof or the District of Columbia; and |
• | will expressly assume by an indenture supplemental to the indenture, executed and delivered to the trustee, in form satisfactory to the trustee, all the obligations of such subsidiary guarantor under its note guarantee of the notes and the indenture; |
(2) at the time of and after giving effect to such transaction or series of transactions on a pro forma basis, no Default or Event of Default exists; and
(3) such subsidiary guarantor shall have delivered to the trustee an officer’s certificate and an opinion of counsel, each stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or disposition and such supplemental indenture comply with the indenture.
Events of Default |
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(1) default in the payment of any interest on any note when it becomes due and payable and continuance of such default for a period of 30 days whether or not such payment shall be prohibited by the subordination provisions relating to the notes;
(2) default in the payment of the principal of, or premium, if any, on any note at its Maturity (upon acceleration, optional redemption, required purchase or otherwise) whether or not such payment shall be prohibited by the subordination provisions relating to the notes;
(3) default in the performance, or breach, of the provisions described in “—Consolidation, Merger and Sale of Assets,” the failure to make or consummate a Change in Control offer in accordance with the provisions under “—Certain Covenants—Purchase of Notes upon a Change in Control” or an Excess Proceeds offer in accordance with the provisions under “—Certain Covenants—Limitation on Sale of Assets”;
(4) default in the performance, or breach, of any covenant or warranty of our company or any subsidiary guarantor contained in the indenture or any note guarantee (other than a default in the performance, or breach, of a covenant or warranty which is specifically dealt with in clause (1), (2) or (3) above) and continuance of such default or breach for a period of 60 days after written notice shall have been given to us by the trustee or to us and the trustee by the holders of at least 25% in aggregate principal amount of the notes then outstanding;
(5) (A) the failure to pay when due (within 10 days after giving effect to any applicable grace period) any principal of or premium, if any, on Indebtedness of our company or any Restricted Subsidiary aggregating $10.0 million or more, and such default shall not have been cured or waived or (B) the acceleration of any Indebtedness of our company or any Restricted Subsidiary aggregating $10.0 million or more prior to the Stated Maturity thereof and such acceleration is not rescinded or such Indebtedness repaid within 10 days;
(6) one or more final, non-appealable judgments or orders shall be rendered against our company or any Restricted Subsidiary aggregating in excess of $10.0 million (net of any amounts to the extent that they are covered by insurance), which has not been discharged, fully bonded or stayed for a period of 60 consecutive days;
(7) any note guarantee of a Material Subsidiary or group of Restricted Subsidiaries that, taken together, would constitute a Material Subsidiary ceases to be in full force and effect or is declared null and void or any subsidiary guarantor which is a Material Subsidiary denies that it has any further liability under any note guarantee, or gives notice to such effect (in each case other than by reason of the termination of the indenture or the release of any such note guarantee in accordance with the indenture); or
(8) the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us or any Material Subsidiary.
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amount of the outstanding notes, by written notice to us and the trustee, may rescind such declaration and its consequences if:
(1) we have paid or deposited with the trustee a sum sufficient to pay:
• | all overdue interest on all outstanding notes; |
• | all unpaid principal of and premium, if any, on any outstanding notes that has become due otherwise than by such acceleration and interest thereon at the rate borne by the notes; |
• | to the extent lawful, interest upon overdue interest and overdue principal at the rate borne by the notes; and |
• | all sums paid or advanced by the trustee under the indenture and the reasonable compensation, expenses, disbursements and advances of the trustee, its agents and counsel; and |
(2) all Events of Default, other than the payment defaults resulting from such acceleration, have been cured or waived. No such rescission shall affect any subsequent default or impair any right consequent thereon.
• | the holders of at least 25% in aggregate principal amount of the outstanding notes have made written request, and offered reasonable indemnity, to the trustee to institute such proceeding; |
• | the trustee has failed to do so within 60 days after receipt of such notice; and |
• | the trustee, within such 60-day period, has not received directions inconsistent with such written request by holders of a majority in aggregate principal amount of the outstanding notes. |
These limitations do not apply, however, to a suit instituted by a holder of a note for the enforcement of the payment of the principal of, premium, if any, or interest on such note when due.
Defeasance or Covenant Defeasance of Indenture |
• | the rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, and interest on such notes when such payments are due; |
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• | our obligations to issue temporary notes, register the transfer or exchange of any notes, replace mutilated, destroyed, lost or stolen notes, maintain an office or agency for payments in respect of the notes and segregate and hold such payments in trust; |
• | the rights, powers, trusts, duties and immunities of the trustee; and |
• | the defeasance provisions of the indenture. |
In addition, we may, at our option and at any time, elect to have the obligations of our company and any subsidiary guarantor released with respect to certain covenants set forth in the indenture, and any omission to comply with such obligations will not constitute a Default or an Event of Default with respect to the notes (“covenant defeasance”). In the event covenant defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events described under “—Events of Default”) will no longer constitute an Event of Default with respect to the notes.
(1) we must irrevocably deposit or cause to be deposited with the trustee, as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the notes, money in an amount, or non-callable U.S. Government Obligations which through the scheduled payment of principal and interest thereon will provide money in an amount, or a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of, premium, if any, and interest on the outstanding notes on the Stated Maturity (or upon redemption, if applicable) of such principal, premium, if any, or installment of interest;
(2) no Default or Event of Default will have occurred and be continuing on the date of such deposit or, insofar as an event of bankruptcy under clause (8) of “—Events of Default” above is concerned, at any time during the period ending on the 91st day after the date of such deposit;
(3) such defeasance or covenant defeasance will not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which our company or any subsidiary guarantor is a party or by which it is bound;
(4) in the case of defeasance, we shall have delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the Internal Revenue Service a ruling, or since the date of the final offering memorandum, there has been a change in applicable federal income tax law, in either case to the effect that, and based thereon such opinion 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 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 defeasance had not occurred;
(5) in the case of covenant defeasance, we shall have delivered to the trustee an opinion of counsel to the effect that the holders of the notes outstanding 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;
(6) in the case of defeasance or covenant defeasance, we shall have delivered to the trustee an opinion of counsel to the effect that (A) the trust funds will not be subject to any rights of holders of Senior Indebtedness under the subordination provisions of the indenture and (B) after the 91st day following the deposit or after the date such opinion is delivered, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
(7) we shall have delivered to the trustee an officers’ certificate stating that the deposit was not made by us with the intent of preferring the holders of the notes or any note guarantee over the other creditors or either our company or any subsidiary guarantor with the intent of hindering, delaying or defrauding creditors of either our company or any subsidiary guarantor; and
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(8) we shall have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent to either the defeasance or the covenant defeasance, as the case may be, have been complied with.
Satisfaction and Discharge |
(1) either:
• | all notes theretofore authenticated and delivered (other than destroyed, lost or stolen notes which have been replaced or paid and notes for whose payment money has been deposited in trust with the trustee or any paying agent or segregated and held in trust by us and thereafter repaid to us or discharged from such trust as provided for in the indenture) have been delivered to the trustee for cancellation; or |
• | all notes not theretofore delivered to the trustee for cancellation (x) have become due and payable, (y) will become due and payable at Stated Maturity within one year or (z) are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name, and at our expense, we or any subsidiary guarantor have irrevocably deposited or caused to be deposited with the trustee as trust funds in trust for such purpose an amount sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the trustee for cancellation, for principal of, premium, if any, and interest on the notes to the date of such deposit (in the case of notes which have become due and payable) or to the Stated Maturity or redemption date, as the case may be; |
(2) our company or any subsidiary guarantor has paid or caused to be paid all sums payable under the indenture by our company and all subsidiary guarantors; and
(3) we have delivered to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided in the indenture relating to the satisfaction and discharge of the indenture have been complied with.
Transfer and Exchange |
Amendments and Waivers |
(1) change the Stated Maturity of the principal of, or any installment of interest on, any note, or reduce the principal amount thereof, or premium, if any, or the rate of interest thereon or change the coin or currency in which the principal of any note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the redemption date);
(2) following the occurrence of a Change in Control, amend, change or modify our obligation to make and consummate a Change in Control Offer with respect to such Change in Control in the event of
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a Change in Control in accordance with the covenant described under “—Certain Covenants—Purchase of Notes Upon a Change in Control,” including amending, changing or modifying any definition relating thereto with respect to such Change in Control in any manner materially adverse to the holders of the notes affected thereby;
(3) reduce the percentage in principal amount of outstanding notes, the consent of whose holders is required for any such supplemental indenture or the consent of whose holders is required for any waiver of compliance with certain provisions of the indenture;
(4) modify any of the provisions relating to supplemental indentures requiring the consent of holders or relating to the waiver of past defaults or relating to the waiver of certain covenants, except to increase the percentage of outstanding notes required for such actions or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each note affected thereby;
(5) release any note guarantee except in compliance with the terms of the indenture; or
(6) amend or modify any of the provisions of the indenture relating to any note guarantee in any manner adverse to the holders of the notes.
(1) to evidence the succession of another person to our company, a subsidiary guarantor or any other obligor on the notes, and the assumption by any such successor of the covenants of our company or such obligor or subsidiary guarantor in the indenture and in the notes and in any note guarantee in accordance with “—Consolidation, Merger and Sale of Assets”;
(2) to add to the covenants of our company, any subsidiary guarantor or any other obligor upon the notes for the benefit of the holders of the notes or to surrender any right or power conferred upon our company or any other obligor upon the notes, as applicable, in the indenture, in the notes or in any note guarantee;
(3) to cure any ambiguity, or to correct or supplement any provision in the indenture, the notes or any note guarantee which may be defective or inconsistent with any other provision in the indenture, the note or any note guarantee or make any other change to the indenture, the notes or the note guarantees that does not adversely affect the interests of the holders of the notes in any material respect;
(4) to comply with the requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;
(5) to add a subsidiary guarantor under the indenture;
(6) to evidence and provide the acceptance of the appointment of a successor trustee under the indenture; or
(7) to mortgage, pledge, hypothecate or grant a security interest in favor of the trustee for the benefit of the holders of the notes as security for our payment and performance and any subsidiary guarantor’s obligations under the indenture, in any property, or assets, including any of which are required to be mortgaged, pledged or hypothecated, or in which a security is required to be granted to the trustee pursuant to the indenture or otherwise.
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The Trustee |
Book Entry; Delivery and Form |
• | DTC notifies us that it is unwilling or unable to continue as a depositary for the global security or if at any time DTC ceases to be a clearing agency registered under the Exchange Act, |
• | we in our discretion at any time determine not to have all the notes represented by the global security, or | |
• | there shall have occurred and be continuing a Default or an Event of Default with respect to the notes represented by the global security. |
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• | certificated notes will be issued only in fully registered form in denominations of $1,000 or integral multiples of $1,000, |
• | payment of principal of, and premium, if any, and interest on, the certificated notes will be payable, and the transfer of the certificated notes will be registrable, at the office or agency that we maintain for such purposes, and | |
• | no service charge will be made for any registration of transfer or exchange of the certificated notes, although we may require payment of a sum sufficient to cover any tax or governmental charge imposed in connection with the transfer or exchange. |
Governing Law |
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Certain Definitions |
(1) that is governed by the provisions of the indenture described under “—Consolidation, Merger and Sale of Assets”;
(2) by us to any Restricted Subsidiary, or by any Restricted Subsidiary to us or any Restricted Subsidiary in accordance with the terms of the indenture;
(3) that are obsolete, damaged, worn out or otherwise unsuitable for use in connection with the business of our company or our Subsidiaries in the ordinary course of business;
(4) constituting a Restricted Payment that is permitted to be made, and is made, in compliance with the covenant described under “—Certain Covenants—Limitation on Restricted Payments”;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) the issuance of Equity Interests by a Restricted Subsidiary to us or to another Restricted Subsidiary;
(7) in any transaction or a series of related transactions that involves assets having a Fair Market Value of less than $5.0 million;
(8) any sale or disposition deemed to occur in connection with creating or granting any Liens pursuant to the covenant described under “—Certain Covenants—Limitation on Liens”; or
(9) the lease, assignment or sublease of any real or personal property in the ordinary course of business.
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(1) the sum of the products of:
• | the number of years from the date of determination to the date or dates of each successive scheduled principal payment (including, without limitation, any sinking fund requirements) of such Indebtedness and |
• | the amount of each such principal payment; by |
(2) the sum of all such principal payments.
(1) any evidence of Indebtedness with a maturity of one year or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);
(2) certificates of deposit or acceptances with a maturity of one year or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500.0 million;
(3) commercial paper with a maturity of one year or less issued by a corporation that is not our Affiliate and is organized under the laws of any state of the United States or the District of Columbia and rated at least A-1 by S&P or any successor rating agency or at least P-1 by Moody’s or any successor rating agency;
(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above;
(5) demand and time deposits with a domestic commercial bank that is a member of the Federal Reserve System that are FDIC insured;
(6) repurchase obligations with a term of not more than seven days entered into with any bank meeting the qualifications specified in clause (5) above; or
(7) investments in funds investing solely in investments of the types described in clauses (1) through (6) above.
(1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of our total outstanding Voting Stock;
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(2) we consolidate with, or merge with or into, another person or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of our assets to any person, or any person consolidates with, or merges with or into, us, in any such event pursuant to a transaction in which our outstanding Voting Stock is converted into or exchanged for cash, securities or other property, other than any such transaction:
• | where our outstanding Voting Stock is not converted or exchanged at all (except to the extent necessary to reflect a change in our jurisdiction of incorporation) or is converted into or exchanged for (A) Voting Stock (other than Redeemable Equity Interests) of the surviving or transferee corporation and/or (B) cash, securities and other property (other than Equity Interests of the surviving or transferee corporation) in an amount that could be paid by us as a Restricted Payment as described under, or is otherwise not prohibited by, the covenant described under “—Certain Covenants—Limitation on Restricted Payments”; and |
• | immediately after such transaction, no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total outstanding Voting Stock of the surviving or transferee corporation; |
(3) during any consecutive two-year period, individuals who at the beginning of such period constituted our Board of Directors (together with any new directors whose election to our Board of Directors, or whose nomination for election by our stockholders, was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of our Board of Directors then in office; or
(4) we are liquidated or dissolved or adopt a plan of liquidation or dissolution other than in a transaction which complies with the provisions described under “—Consolidation, Merger and Sale of Assets.”
(1) any net after-tax extraordinary gains or losses (less all fees and expenses relating thereto);
(2) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to Asset Sales other than in the ordinary course of business;
(3) the portion of net income (or loss) of any person (other than our company or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which our company or any Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to us or any Restricted Subsidiary in cash (or which are converted to cash) during such period;
(4) the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the date of determination permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary or its stockholders, except to the extent of the amount of dividends or other distributions actually paid to us or any Restricted Subsidiary in cash (or which are converted to cash); and
(5) for purposes of calculating Consolidated Adjusted Net Income under the covenant described under “—Certain Covenants—Limitation on Restricted Payments,” any net income (or loss) from any Restricted Subsidiary while it was an Unrestricted Subsidiary at any time during such period other than any amounts actually paid to us or another Restricted Subsidiary during such period;
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plus, for purposes of the use of this term in the “Limitation on Restricted Payments” covenant, any non-cash write down of our carrying value of our investment in MedUnite in an amount not to exceed our carrying value of our investment in MedUnite as of the Issuance Date.
• | Consolidated Interest Expense; and |
• | cash and non-cash dividends due (whether or not declared) on Preferred Stock of our company or any Restricted Subsidiary (other than any such dividends due to our company or any Restricted Subsidiary), in each case for such period. |
(1) the interest expense of our company and our Restricted Subsidiaries for such period, including, without limitation:
• | amortization of debt discount; |
• | the net cost (benefit) of Interest Rate Agreements and Currency Agreements (including amortization of discounts); |
• | the interest portion of any deferred payment obligation, including Attributable Debt; |
• | commissions, discounts, and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and similar transactions; and |
• | amortization of debt issuance costs; plus |
(2) the interest component of Capitalized Lease Obligations of our company and our Restricted Subsidiaries paid, accrued and/or scheduled to be paid or accrued during such period; plus
(3) the interest of our company and our Restricted Subsidiaries that was capitalized during such period; plus
(4) interest on Indebtedness of another person that is guaranteed by our company or any Restricted Subsidiary or secured by a Lien on assets of us or a Restricted Subsidiary, to the extent such interest is actually paid by us or such Restricted Subsidiary, in each case as determined on a consolidated basis in accordance with GAAP;
provided that (x) the Consolidated Interest Expense attributable to interest on any Indebtedness computed on a pro forma basis and bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period, and (y) in making such computation, the Consolidated Interest Expense attributable to interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period; provided further that, notwithstanding the foregoing, the interest rate with respect to any Indebtedness covered by any Interest Rate Agreement shall be deemed to be the effective interest rate with respect to such Indebtedness after taking into account such Interest Rate Agreement.
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(1) all Indebtedness of our company and our Restricted Subsidiaries that by its terms is payable on demand or matures within one year after the date of determination (excluding any Indebtedness renewable or extendible, at the option of our company or any of our Restricted Subsidiaries, to a date more than one year from such date or arising under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date); and
(2) all other items (including taxes accrued as estimated) that in accordance with GAAP would be classified as current liabilities of our company and our Restricted Subsidiaries.
(1) any and all shares, interests, participations, rights in or other equivalents (however designated) of such person’s capital stock, other equity interests whether now outstanding or issued after the date of the indenture, partnership interests (whether general or limited), any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person; and
(2) any warrants, options or other rights (other than debt securities exchangeable for or convertible into any such Equity Interests referred to in clause (1)) exchangeable for or convertible into such Equity Interests referred to in clause (1).
(1) the sum of:
• | Consolidated Adjusted Net Income (or loss) of our company and our Restricted Subsidiaries for such period; plus |
• | to the extent deducted in arriving at such Consolidated Adjusted Net Income (or loss), the aggregate amount of all Consolidated Non-Cash Charges; plus |
• | if there was a net increase in Current Liabilities of our company and our Restricted Subsidiaries during such period, the amount of such net increase; plus |
• | if there was a net decrease in Current Assets (excluding cash and Cash Equivalents) of our company and our Restricted Subsidiaries during such period, the amount of such net decrease; less |
(2) the sum of:
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• | to the extent included in arriving at such Consolidated Adjusted Net Income (or loss), the aggregate amount of all non-cash credits; plus |
• | if there was a net decrease in Current Liabilities of our company and our Restricted Subsidiaries during such period, the amount of such net decrease; plus |
• | if there was a net increase in Current Assets (excluding cash and Cash Equivalents) of our company and our Restricted Subsidiaries during such period, the amount of such net increase; plus | |
• | the aggregate amount of capital expenditures made by our company and our Restricted Subsidiaries in the ordinary course of business (excluding normal replacements and maintenance which are properly charged to current operations). |
(1) all liabilities of such person for borrowed money (including overdrafts) or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities;
(2) all obligations of such person evidenced by bonds, notes, debentures or other similar instruments;
(3) indebtedness of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business;
(4) all Capitalized Lease Obligations of such person;
(5) all obligations of such person under or in respect of Interest Rate Agreements or Currency Agreements;
(6) all indebtedness referred to in (but not excluded from) the preceding clauses of other persons and all dividends declared by other persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on any property (including, without limitation, accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such Indebtedness (the amount of such obligation being deemed to be the lesser of the value of such property or asset or the amount of the obligation so secured);
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(7) all guarantees by such person of Indebtedness referred to in this definition or of any other person;
(8) all Redeemable Equity Interests of such person valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends; and
(9) all Attributable Debt of such person.
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(1) brokerage commissions and other fees and expenses (including, without limitation, fees and expenses of legal counsel and investment banks, recording fees, transfer fees and appraiser fees) related to such Asset Sale;
(2) provisions for all taxes payable as a result of such Asset Sale;
(3) payments made to retire Indebtedness where payment of such Indebtedness is secured by the assets or properties which are the subject of such Asset Sale or where such Indebtedness must by its terms, or as required by applicable law, be repaid out of the proceeds of such Asset Sale;
(4) amounts required to be paid to any person (other than us or any Restricted Subsidiary) owning a beneficial interest in or having a Lien on the assets subject to the Asset Sale;
(5) all distributions and other payments required to be made to non-majority interest holders in Subsidiaries as a result of such Asset Sale; and
(6) appropriate amounts to be provided by us or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by us or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an officers’ certificate delivered to the trustee.
(1) Indebtedness of our company under the Senior Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $225.0 million plus Indebtedness of any Restricted Subsidiary under a guarantee of such Indebtedness under the Senior Credit Agreement;
(2) Indebtedness of our company pursuant to the notes (other than additional notes) or the exchange notes or of any subsidiary guarantor pursuant to a note guarantee;
(3) Indebtedness (other than Indebtedness referred to in clauses (1) and (2) of this definition) of our company or any Restricted Subsidiary outstanding on the date of the indenture;
(4) Indebtedness of our company owing to any Restricted Subsidiary; provided that any Indebtedness of our company owing to a Restricted Subsidiary that is not a subsidiary guarantor is unsecured and is subordinated in right of payment from and after such time as the notes shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of our obligations under the notes; provided further that a disposition or transfer of any such Indebtedness to a person (other than a disposition or transfer to a Restricted Subsidiary) shall be deemed to be an incurrence of such Indebtedness by us not permitted by this clause (4);
(5) Indebtedness of a Restricted Subsidiary owing to us or to another Restricted Subsidiary; provided that any disposition or transfer or any such Indebtedness to a person (other than a disposition or transfer to us or a wholly owned Restricted Subsidiary) shall be deemed to be an incurrence of such Indebtedness by such Restricted Subsidiary not permitted by this clause (5);
(6) guarantees of any Restricted Subsidiary made in accordance with the provisions under “—Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries”;
(7) the incurrence of obligations entered into in the ordinary course of business pursuant to Interest Rate Agreements designed to protect us or any Restricted Subsidiary against or manage exposure to fluctuations in interest rates, and Currency Agreements;
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(8) Indebtedness of our company or any Restricted Subsidiary in respect of Capitalized Lease Obligations and/or Purchase Money Obligations in an aggregate amount not to exceed $15.0 million at any one time outstanding;
(9) Indebtedness of our company or any Restricted Subsidiary consisting of guarantees, indemnities, hold backs or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, Equity Interests of Restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition of assets which are contingent on the performance of the assets acquired, other than guarantees of Indebtedness incurred by any person acquiring all or any portion of such assets or Equity Interests of such Restricted Subsidiary for the purpose of financing such acquisition, provided that the maximum allowable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by us and our Restricted Subsidiaries;
(10) Indebtedness of our company or any Restricted Subsidiary represented by (a) letters of credit for the account of our company or any Restricted Subsidiary or (b) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, which letters of credit or other obligations, as the case may be, are intended to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or other similar requirements in the ordinary course of business;
(11) Indebtedness of our company or one of our Restricted Subsidiaries to the extent the net proceeds thereof are concurrently deposited to defease all outstanding notes as described under the caption “—Defeasance or Covenant Defeasance of Indenture”;
(12) Indebtedness of our foreign Restricted Subsidiaries in an aggregate principal amount at any one time outstanding not to exceed $30.0 million;
(13) any renewals, extensions, substitutions, refinancing or replacements (each, for purposes of this clause, a “refinancing”) of any Indebtedness incurred pursuant to the first paragraph under “—Certain Covenants—Limitation on Indebtedness” or referred to in clause (2) or (3) of this definition, including any successive refinancings, so long as:
(A) any such new Indebtedness shall be in a principal amount that does not exceed the principal amount so refinanced, plus the lesser of the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined as necessary to accomplish such refinancing plus expenses incurred in connection therewith;
(B) in the case of any refinancing by us of Pari Passu Indebtedness or Subordinated Indebtedness, such new Indebtedness is made pari passu with or subordinate to the notes at least to the same extent as the Indebtedness being refinanced;
(C) such new Indebtedness has an Average Life no shorter than the Average Life of the Indebtedness being refinanced and final Stated Maturity of principal no earlier than the final Stated Maturity of principal of the Indebtedness being refinanced; and
(D) Indebtedness of our company may only be refinanced with Indebtedness of our company; and
(14) Indebtedness of our company and of the subsidiary guarantors not otherwise permitted by the foregoing clauses (1) through (13) in an aggregate principal amount not to exceed $25.0 million at any one time outstanding.
We are not prohibited under the covenant described under “—Certain Covenants—Limitation on Liens” to create or incur any Liens securing any Indebtedness incurred pursuant to clause (1) of the definition of “Permitted Indebtedness.”
(1) Investments in Cash Equivalents;
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(2) Investments in our company or any Restricted Subsidiary;
(3) intercompany Indebtedness to the extent permitted under clause (4) or (5) of the definition of “Permitted Indebtedness”;
(4) Investments by us or any Restricted Subsidiary in another person, if as a result of such Investment (A) such other person becomes a Restricted Subsidiary or (B) such other person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, us or a Restricted Subsidiary;
(5) bonds, notes, debentures and other securities received as consideration for Asset Sales to the extent permitted under “—Certain Covenants—Limitation on Sale of Assets”;
(6) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business;
(7) Interest Rate Agreements and Currency Agreements permitted under “—Certain Covenants—Limitation on Indebtedness”;
(8) Investments existing on the Issuance Date;
(9) any Investment to the extent that the consideration therefor is Qualified Equity Interests;
(10) Investments constituting loans, advances or extensions of credit to employees, officers and directors made in the ordinary course of business and otherwise in compliance with the indenture;
(11) Investments made as a result of the receipt of non-cash consideration in an Asset Sale permitted under the covenant described under “—Certain Covenants—Limitation on Sale of Assets”; or
(12) Investments not described in clauses (1) through (11) of this definition in an aggregate amount not to exceed $25.0 million at any one time outstanding.
(1) Liens existing on the Issuance Date;
(2) Liens now or hereafter securing any Interest Rate Agreements of our company or any Restricted Subsidiary;
(3) Liens securing any Indebtedness incurred under clause (13) of the definition of “Permitted Indebtedness,” the proceeds of which are used to refinance Indebtedness of our company or any Restricted Subsidiary; provided that such Liens extend to or cover only the assets currently securing the Indebtedness being refinanced;
(4) Liens securing Acquired Indebtedness incurred by us and any Restricted Subsidiary and permitted under “—Certain Covenants—Limitation on Indebtedness”; provided that such Liens attach solely to the assets acquired and the Acquired Indebtedness was not incurred in connection with an acquisition of assets from a person;
(5) Liens securing Indebtedness owing to us or a Restricted Subsidiary;
(6) Liens securing Purchase Money Obligations incurred in accordance with the indenture;
(7) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which our company or our Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(8) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserved or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;
(9) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance
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of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations;
(10) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
(11) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the conduct of the business of our company or any of our Restricted Subsidiaries; or
(12) any interest or title of a lessor in assets or property subject to Capitalized Lease Obligations or any operating lease of our company or any Restricted Subsidiary.
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(1) any corporation more than 50% of the outstanding voting power of the Voting Stock of which is owned or controlled, directly or indirectly, by such person or by one or more other Subsidiaries of such person, or by such person and one or more other Subsidiaries thereof; or
(2) any other person in which such person, or one or more other Subsidiaries of such person, or such person and one or more other Subsidiaries, directly or indirectly, has more than 50% of the outstanding partnership or similar interests or has the power, by contract or otherwise, to direct or cause the direction of the policies, management and affairs thereof.
(1) any Subsidiary of our company that at the time of determination shall be an Unrestricted Subsidiary (as designated by our Board of Directors, as provided under “—Certain Covenants— Limitation on Unrestricted Subsidiaries”); and
(2) any Subsidiary of any Unrestricted Subsidiary.
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or
(2) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt;
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provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.
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EXCHANGE OFFER; REGISTRATION RIGHTS
(1) file an exchange offer registration statement (the “Exchange Offer Registration Statement”) with the SEC with respect to an offer to exchange the old notes for new notes having substantially identical terms in all material respects to the old notes (except that the Exchange Notes will not contain terms with respect to transfer restrictions or interest rate increases as described herein) within 120 calendar days after the Issuance Date;
(2) use our and the subsidiary guarantors’ reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective by the SEC under the Securities Act within 250 calendar days after the Issuance Date; and
(3) use our and the subsidiary guarantors’ reasonable best efforts to consummate the exchange offer within 280 calendar days after the Issuance Date.
(1) will not be able to rely on the interpretation of the staff of the SEC;
(2) will not be able to tender its old notes in the exchange offer; and
(3) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the old notes unless such sale or transfer is made pursuant to an exemption from such requirements.
(1) any changes in law or the applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer;
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(2) for any other reason the exchange offer is not consummated within 180 days after the Issuance Date;
(3) under certain circumstances, if the initial purchasers shall so request; or
(4) any holder of old notes, other than the initial purchasers, is not eligible to participate in the exchange offer;
we and the subsidiary guarantors will, at our expense, (a) as promptly as practicable, file with the SEC a shelf registration statement (the “Shelf Registration Statement”) covering resales of the old notes, (b) use our and the subsidiary guarantors’ reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to 270 days after the Issuance Date and (c) use our and the subsidiary guarantors’ reasonable best efforts to keep effective the Shelf Registration Statement until the earlier of two years after the Issuance Date or such shorter period ending when all old notes covered by the Shelf Registration Statement have been sold in the manner set forth and as contemplated in the Shelf Registration Statement or when the old notes become eligible for resale pursuant to Rule 144 under the Securities Act without volume restrictions, if any. We and the subsidiary guarantors will, in the event of the filing of the Shelf Registration Statement, provide to each holder of the old notes named in the Shelf Registration Statement or any prospectus supplement copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the old notes. A holder of old notes that sells its old notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations thereunder). In addition, each holder of the old notes will be required to deliver to us information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the registration rights agreement in order to have their old notes included in the Shelf Registration Statement and to benefit from the provisions regarding additional interest set forth in the following paragraph.
the interest rate borne by the old notes shall be increased by one-quarter of 1% per annum following such 120-day period in the case of clause (1) above, or following such 30-day period in the case of clause (2) above, which rate will be increased by an additional one-quarter of one percent per annum for each 90-day period that any additional interest continues to accrue; provided that the aggregate increase in such annual interest rate may in no event exceed 1%. Upon (1) the consummation of the exchange offer or the effectiveness of a Shelf Registration Statement, as the case may be, after the 280-day period described in clause (1) above, or the cure of any period, as the case may be, in the case of clause (2) above, the interest rate borne by the old notes from the date of such effectiveness, consummation or cure as the case may be, will be reduced to the original interest rate if we are otherwise in compliance with this paragraph; provided, however, that if, after any such reduction in interest rate, a different event specified in clause (1) or (2) above occurs, the interest rate may again be increased pursuant to the foregoing provisions.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
• | a citizen or resident of the United States, |
• | a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, |
• | an estate the income of which is subject to United States federal income taxation regardless of its source, or |
• | a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) the trust has in effect a valid election to be treated as a domestic trust for United States federal income tax purposes. |
Tax Consequences of the Exchange Offer |
• | holders will not recognize taxable gain or loss upon the receipt of new notes in exchange for old notes in the exchange offer, |
• | the holding period for a new note received in the exchange offer will include the holding period of the old note surrendered in exchange therefor, and |
• | the adjusted tax basis of a new note immediately after the exchange will be the same as the adjusted tax basis of the old note surrendered in exchange therefor. |
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U.S. holders |
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Non-U.S. holders |
• | the Non-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote, |
• | the Non-U.S. holder is not a controlled foreign corporation that is related to us through stock ownership, |
• | the Non-U.S. holder certifies to us or our agent, under penalties of perjury, that it is not a U.S. holder and provides its name and address or otherwise satisfies applicable identification requirements, and |
• | neither we nor our paying agent knows or has reason to know that the conditions of the exemption are, in fact, not satisfied. |
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not subject to U.S. withholding tax if the holder delivers a properly executed IRS Form W-8ECI (or a suitable substitute form) to us or our paying agent and neither we nor our paying agent knows or has reason to know that the information on the form is incorrect.
• | the gain is effectively connected with a United States trade or business of the Non-U.S. holder, or |
• | in the case of a Non-U.S. holder who is an individual, such holder is present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition, and either such holder has a “tax home” in the United States or the disposition is attributable to an office or other fixed place of business maintained by such holder in the United States. |
Information Reporting and Backup Withholding Tax |
• | fails to furnish or certify its correct taxpayer identification number to us or our paying agent in the manner required, |
• | is notified by the IRS that it has failed to report payments of interest or dividends properly, |
• | or under certain circumstances, fails to certify that it has not been notified by the IRS that it is subject to backup withholding for failure to report interest or dividend payments. |
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PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
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No person has been authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information and representations must not be relied upon as having been authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities to which it relates or any offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of NDCHealth Corporation since the date hereof or that the information contained herein is correct as of any time subsequent to its date.
NDCHEALTH CORPORATION
Offer to Exchange
10½% Senior Subordinated Notes Due 2012
that have been registered under the Securities Act of 1933
for
all outstanding unregistered
10½% Senior Subordinated Notes Due 2012
, 2003
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers |
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Item 21. Exhibits |
Exhibit Number | Description of Exhibits | ||||
3.1 | — | Restated Certificate of Incorporation of NDCHealth Corporation (Incorporated by reference to Exhibit 3(i) of NDCHealth’s Quarterly Report on Form 10-Q for the Quarterly Period Ended November 30, 2001 (File No. 001-12392)) | |||
3.2 | — | Bylaws of NDCHealth Corporation, as amended (Incorporated by reference to Exhibit 3(ii) of NDCHealth’s Annual Report on Form 10-K for the Year Ended May 31, 2002 (File No. 001-12392)) | |||
3.3 | — | Certificate of Incorporation of NDC Health Information Services (Arizona) Inc. (formerly known as Pharmaceutical Data Services, Inc.)* | |||
3.4 | — | Bylaws of NDC Health Information Services (Arizona) Inc.* | |||
3.5 | — | Certificate of Incorporation of NDC of Canada, Inc.* | |||
3.6 | — | Bylaws of NDC of Canada, Inc.* | |||
4.1 | — | Registration Rights Agreement, dated as of November 26, 2002, among NDCHealth Corporation, the guarantors named therein and Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and U.S. Bancorp Piper Jaffray Inc., as Initial Purchasers* | |||
4.2 | — | Indenture, dated as of November 26, 2002, among NDCHealth Corporation, the guarantors named therein and Regions Bank, as trustee (Incorporated by reference to Exhibit 4(i) of NDCHealth’s Quarterly Report on Form 10-Q for the Quarterly Period Ended November 29, 2002 (File No. 001-12392)) | |||
4.3 | — | Form of 10 1/2% Senior Subordinated Note due 2012* | |||
5.1 | — | Opinion of King & Spalding* | |||
12.1 | — | Computation of Ratio of Earnings to Fixed Charges | |||
23.1 | — | Consent of King & Spalding (included as part of Exhibit 5.1)* | |||
23.2 | — | Consent of Ernst & Young LLP** | |||
24.1 | — | Power of Attorney* | |||
25.1 | — | Statement of Eligibility of Trustee on Form T-1* | |||
99.1 | — | Form of Letter of Transmittal* | |||
99.2 | — | Form of Notice of Guaranteed Delivery* | |||
99.3 | — | Form of Instructions to Registered Holder and/or DTC Participant from Beneficial Owner* | |||
99.4 | — | Form of Letter to Registered Holders* | |||
* | Previously filed |
** | To be filed by amendment |
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Item 22. Undertakings |
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bonafide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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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.
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SIGNATURES
NDCHealth Corporation |
By: | /s/ RANDOLPH L .M HUTTO |
Name: | Randolph L.M. Hutto |
Title: | Executive Vice President, Chief Financial Officer and Secretary |
Signature | Title | Date |
* | Chairman, President and Chief Executive Officer (Principal Executive Officer) | July 18, 2003 |
Walter M. Hoff | ||
* | Executive Vice President, Chief Financial Officer and Secretary (Principal Financial Officer) | July 18, 2003 |
Randolph L.M. Hutto | ||
/s/ DAVID H. SHENK | Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) | July 18, 2003 |
David H. Shenk | ||
* | Director | July 18, 2003 |
J. Veronica Biggins | ||
* | Director | July 18, 2003 |
Terri A. Dial | ||
* | Director | July 18, 2003 |
Dr. Jeffrey P. Koplan | ||
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Signature | Title | Date |
* | Director | July 18, 2003 |
Kurt M. Landgraf | ||
* | Director | July 18, 2003 |
James F. McDonald | ||
* | Director | July 18, 2003 |
Neil Williams | ||
*By: | /s/ RANDOLPH L.M. HUTTO Randolph L.M. Hutto as Attorney-in-fact |
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SIGNATURES
NDC Health Information Services (Arizona) Inc. |
By: | /s/ RANDOLPH L .M HUTTO |
Name: | Randolph L.M. Hutto |
Title: | Vice President and Chief Financial Officer |
Signature | Title | Date |
* | President and Director (Principal Executive Officer) | July 18, 2003 |
Walter M. Hoff | ||
* | Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | July 18, 2003 |
Randolph L.M. Hutto | ||
*By: | /s/ RANDOLPH L.M. HUTTO Randolph L.M. Hutto as Attorney-in-fact |
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SIGNATURES
NDC of Canada, Inc. |
By: | /s/ RANDOLPH L .M HUTTO |
Name: | Randolph L.M. Hutto |
Title: | Vice President and Chief Financial Officer |
Signature | Title | Date |
* | President and Director (Principal Executive Officer) | July 18, 2003 |
Walter M. Hoff | ||
* | Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | July 18, 2003 |
Randolph L.M. Hutto | ||
*By: | /s/ RANDOLPH L.M. HUTTO Randolph L.M. Hutto as Attorney-in-fact |
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Exhibit Number | Description of Exhibits | ||||
3.1 | — | Restated Certificate of Incorporation of NDCHealth Corporation (Incorporated by reference to Exhibit 3(i) of NDCHealth’s Quarterly Report on Form 10-Q for the Quarterly Period Ended November 30, 2001 (File No. 001-12392)) | |||
3.2 | — | Bylaws of NDCHealth Corporation, as amended (Incorporated by reference to Exhibit 3(ii) of NDCHealth’s Annual Report on Form 10-K for the Year Ended May 31, 2002 (File No. 001-12392)) | |||
3.3 | — | Certificate of Incorporation of NDC Health Information Services (Arizona) Inc. (formerly known as Pharmaceutical Data Services, Inc.)* | |||
3.4 | — | Bylaws of NDC Health Information Services (Arizona) Inc.* | |||
3.5 | — | Certificate of Incorporation of NDC of Canada, Inc.* | |||
3.6 | — | Bylaws of NDC of Canada, Inc.* | |||
4.1 | — | Registration Rights Agreement, dated as of November 26, 2002, among NDCHealth Corporation, the guarantors named therein and Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and U.S. Bancorp Piper Jaffray Inc., as Initial Purchasers* | |||
4.2 | — | Indenture, dated as of November 26, 2002, among NDCHealth Corporation, the guarantors named therein and Regions Bank, as trustee (Incorporated by reference to Exhibit 4(i) of NDCHealth’s Quarterly Report on Form 10-Q for the Quarterly Period Ended November 29, 2002 (File No. 001-12392)) | |||
4.3 | — | Form of 10 1/2% Senior Subordinated Note due 2012* | |||
5.1 | — | Opinion of King & Spalding* | |||
12.1 | — | Computation of Ratio of Earnings to Fixed Charges | |||
23.1 | — | Consent of King & Spalding (included as part of Exhibit 5.1)* | |||
23.2 | — | Consent of Ernst & Young LLP** | |||
24.1 | — | Power of Attorney* | |||
25.1 | — | Statement of Eligibility of Trustee on Form T-1* | |||
99.1 | — | Form of Letter of Transmittal* | |||
99.2 | — | Form of Notice of Guaranteed Delivery* | |||
99.3 | — | Form of Instructions to Registered Holder and/or DTC Participant from Beneficial Owner* | |||
99.4 | — | Form of Letter to Registered Holders* | |||
* | Previously filed |
** | To be filed by amendment |
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