EXHIBIT 4.4
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SCHEIN PHARMACEUTICAL, INC.
THE GUARANTORS PARTY HERETO
AND
THE BANK OF NEW YORK, as Trustee
INDENTURE
Dated as of December 24, 1997
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$100,000,000
SENIOR FLOATING RATE NOTES DUE 2004
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS............................ 1
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SECTION 1.1 Certain Terms Defined............................... 1
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ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES..................... 16
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SECTION 2.1 Authentication and Delivery of Securities........... 16
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SECTION 2.2 Execution of Securities............................. 17
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SECTION 2.3 Certificate of Authentication....................... 17
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SECTION 2.4 Form, Denomination and Date of Securities; Payments
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of Interest................................................ 17
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SECTION 2.5 Registration, Transfer and Exchange................. 19
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SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
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Securities................................................. 22
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SECTION 2.7 Cancellation of Securities; Destruction Thereof..... 23
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SECTION 2.8 Temporary Securities; Global Securities............. 23
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SECTION 2.9 Effective Registration.............................. 25
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SECTION 2.10 CUSIP Numbers...................................... 25
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ARTICLE III
COVENANTS OF THE COMPANY...................... 25
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SECTION 3.1 Payment of Principal and Interest................... 25
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SECTION 3.2 Offices for Payments, etc........................... 25
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SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.. 26
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SECTION 3.4 Paying Agents....................................... 26
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SECTION 3.5 Certificate to Trustee.............................. 27
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SECTION 3.6 Securityholders' Lists.............................. 27
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SECTION 3.7 Commission Reports.................................. 27
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SECTION 3.8 Limitation on Indebtedness.......................... 28
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SECTION 3.9 Limitation on Restricted Payments................... 30
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SECTION 3.10 Limitation on Sales of Assets and Subsidiary Stock. 32
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SECTION 3.11 Limitation on Restrictions on Distributions from
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Restricted Subsidiaries.................................... 35
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SECTION 3.12 Limitation on Sale of Capital Stock of Restricted
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Subsidiaries............................................... 35
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SECTION 3.13 Limitation on Liens................................ 36
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SECTION 3.14 Limitations on Affiliate Transactions.............. 37
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SECTION 3.15 Change of Control.................................. 38
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SECTION 3.16 Limitation on Lines of Business.................... 39
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SECTION 3.17 Limitation on Sale and Leaseback Transactions....... 40
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SECTION 3.18 Payments for Consent............................... 40
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SECTION 3.19 Waiver of Stay, Extension or Usury Laws............ 40
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ARTICLE IV
DEFAULTS AND REMEDIES....................... 40
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SECTION 4.1 Event of Default Defined; Acceleration of Maturity.. 40
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SECTION 4.2 Acceleration........................................ 42
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SECTION 4.3 Other Remedies...................................... 43
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SECTION 4.4 Waiver of Past Defaults............................. 43
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SECTION 4.5 Control by Majority................................. 43
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SECTION 4.6 Limitation on Suits................................. 44
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SECTION 4.7 Rights of Holders to Receive Payment................ 44
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SECTION 4.8 Collection Suit by Trustee.......................... 44
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SECTION 4.9 Trustee May File Proofs of Claim.................... 44
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SECTION 4.10 Priorities......................................... 45
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SECTION 4.11 Undertaking for Costs.............................. 45
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ARTICLE V
CONCERNING THE TRUSTEE....................... 45
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SECTION 5.1 Duties and Responsibilities of the Trustee; During
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Default; Prior to Default.................................. 45
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SECTION 5.2 Certain Rights of the Trustee....................... 47
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SECTION 5.3 Trustee Not Responsible for Recitals, Disposition of
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Securities or Application of Proceeds Thereof.............. 48
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SECTION 5.4 Trustee and Agents May Hold Securities; Collections,
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etc........................................................ 48
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SECTION 5.5 Moneys Held by Trustee.............................. 48
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SECTION 5.6 Compensation and Indemnification of Trustee and Its
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Prior Claim................................................ 48
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SECTION 5.7 Right of Trustee to Rely on Officer's Certificate,
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Etc........................................................ 49
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SECTION 5.8 Persons Eligible for Appointment as Trustee......... 49
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SECTION 5.9 Resignation and Removal; Appointment of Successor
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Trustee.................................................... 49
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SECTION 5.10 Acceptance of Appointment by Successor Trustee..... 50
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SECTION 5.11 Merger, Conversion, Consolidation or Succession to
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Business of Trustee........................................ 51
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SECTION 5.12 Notice of Defaults................................. 51
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SECTION 5.13 Reports by the Trustee............................. 51
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ARTICLE VI
CONCERNING THE SECURITYHOLDERS................... 52
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SECTION 6.1 Evidence of Action Taken by Securityholders......... 52
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SECTION 6.2 Proof of Execution of Instruments and of Holding of
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Securities; Record Date.................................... 52
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SECTION 6.3 Holders to be Treated as Owners..................... 52
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SECTION 6.4 Securities Owned by Company Deemed Not Outstanding.. 53
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SECTION 6.5 Right of Revocation of Action Taken................. 53
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ARTICLE VII
AMENDMENTS............................. 53
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SECTION 7.1 Without Consent of Holders.......................... 53
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SECTION 7.2 With Consent of Holders............................. 54
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SECTION 7.3 Compliance with Trust Indenture Act................. 55
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SECTION 7.4 Revocation and Effect of Consents and Waivers....... 55
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SECTION 7.5 Notation on or Exchange of Securities............... 55
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SECTION 7.6 Trustee to Sign Amendments.......................... 56
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ARTICLE VIII
MERGER AND CONSOLIDATION...................... 56
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SECTION 8.1 When Company May Merge, Etc......................... 56
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SECTION 8.2 Successor Corporation Substituted................... 56
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ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE................. 57
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SECTION 9.1 Discharge of Liability on Securities: Defeasance.... 57
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SECTION 9.2 Conditions to Defeasance............................ 58
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SECTION 9.3 Application of Trust Money.......................... 59
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SECTION 9.4 Repayment to Company................................ 59
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SECTION 9.5 Indemnity for U.S. Government Obligations........... 60
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SECTION 9.6 Reinstatement....................................... 60
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ARTICLE X
SUBSIDIARY GUARANTEE........................ 60
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SECTION 10.1 Subsidiary Guarantee............................... 60
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SECTION 10.2 Limitation on Liability............................ 62
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SECTION 10.3 Successors and Assigns............................. 62
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SECTION 10.4 No Waiver.......................................... 63
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SECTION 10.5 Modification....................................... 63
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SECTION 10.6 Release............................................ 63
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ARTICLE XI
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MISCELLANEOUS PROVISIONS...................... 63
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SECTION 11.1 Incorporators, Stockholders, Officers and Directors
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of Company Exempt from Individual Liability................ 63
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SECTION 11.2 Provisions of Indenture for the Sole Benefit of
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Parties and Securityholders................................ 63
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SECTION 11.3 Successors and Assigns of Company Bound by
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Indenture.................................................. 64
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SECTION 11.4 Notices and Demands on Company, Trustee and
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Securityholders............................................ 64
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SECTION 11.5 Officers' Certificates and Opinions of Counsel;
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Statements to Be Contained Therein......................... 64
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SECTION 11.6 Payments Due on Saturdays; Sundays and Holidays.... 65
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SECTION 11.7 Conflict of Any Provision of Indenture with Trust
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Indenture Act.............................................. 65
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SECTION 11.9 Counterparts....................................... 66
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SECTION 11.10 Effect of Headings................................ 66
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ARTICLE XII
REDEMPTION OF SECURITIES...................... 66
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SECTION 12.1 Right of Optional Redemption; Prices............... 66
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SECTION 12.2 Applicability of Article........................... 66
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SECTION 12.3 Election to Redeem; Notice to Trustee.............. 66
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SECTION 12.4 Notice of Redemption; Partial Redemptions.......... 66
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SECTION 12.5 Payment of Securities Called for Redemption........ 68
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SECTION 12.6 Exclusion of Certain Securities from Eligibility for
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Selection for Redemption................................... 68
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SCHEDULES AND EXHIBITS
SCHEDULE 1.1 CERTAIN PERMITTED HOLDERS
SCHEDULE 1.2 CORPORATE TRUST OFFICE
EXHIBIT A - FORM OF INITIAL NOTE
EXHIBIT B - FORM OF EXCHANGE NOTE
EXHIBIT C - FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER FROM RESTRICTED
GLOBAL SECURITY OR RESTRICTED SECURITY TO RESTRICTED SECURITY
EXHIBIT D - FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
EXHIBIT E - FORM OF LEGAL OPINION ON TRANSFER
EXHIBIT F - FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM RESTRICTED
SECURITY TO RESTRICTED GLOBAL SECURITY
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THIS INDENTURE, dated as of December 24, 1997 is entered into among
Schein Pharmaceutical, Inc., a Delaware corporation (the "Company"), the
Guarantors party hereto (the "Guarantors") and The Bank of New York, a New York
banking corporation (the "Trustee").
W I T N E S E T H :
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WHEREAS, the Company has duly authorized the issue of its Initial
Senior Floating Rate Notes due 2004 (the "Initial Notes") and, when issued in
exchange for Initial Notes as provided in the Registration Rights Agreement (as
defined herein), the Company's Senior Floating Rate Notes due 2004 (the
"Exchange Notes" and together with the Initial Notes, the "Securities"), and to
provide, among other things, for the authentication, delivery and administration
thereof, the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all things necessary to make the Securities, when executed by
the Company and authenticated and delivered by the Trustee as in this Indenture
provided, the valid, binding and legal obligations of the Company, and to
constitute these presents a valid indenture and agreement according to its
terms, have been done;
NOW, THEREFORE:
In consideration of the premises, the Company, the Guarantors and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
the respective holders from time to time of the Securities as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1 Certain Terms Defined. The following terms (except as
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otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act (as defined
herein), or the definitions of which in the Securities Act as (defined herein)
are referred to in the Trust Indenture Act (except as herein otherwise expressly
provided or unless the context otherwise clearly requires), shall have the
meanings assigned to such terms in the Trust Indenture Act and in the Securities
Act as in force at the date of this Indenture. All accounting terms used herein
and not expressly defined shall have the meanings given to them in accordance
with GAAP (as defined herein). The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The terms defined in this
Article include the plural as well as the singular.
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"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
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the time such Person becomes a Restricted Subsidiary or (ii) assumed by the
Company or a Restricted Subsidiary in connection with the acquisition of assets
from such Person. Acquired Indebtedness shall be deemed to be incurred on the
date of the related acquisition of assets from any Person or the date the
acquired Person becomes a Restricted Subsidiary.
"Additional Assets" means (i) any property or assets (other than
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Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business or (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; provided, however, that
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in the case of clause (ii) such Person is primarily engaged in a Related
Business.
"Affiliate" of any specified Person means (i) any other Person,
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directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any Person who is a director
or officer (a) of such Person, (b) of any Subsidiary of such Person or (c) of
any Person described in clause (i) above. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 3.14, "Affiliate" shall also mean any beneficial owner of
(x) shares and (y) rights or warrants to purchase shares (whether or not
currently exercisable) representing in the aggregate 10% or more of the total
voting power (assuming the exercise of any such rights or warrants) of the
outstanding voting shares of Capital Stock of the Company on a fully diluted
basis and any Person who would be an Affiliate of any such beneficial owner
pursuant to the first sentence hereof.
"Affiliate Transaction" has the meaning specified in Section 3.14(a).
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"Agent Members" has the meaning specified in Section 2.4(c).
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"Asset Disposition" means any sale, lease, transfer, issuance or other
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disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Restricted Subsidiary, (ii) a
disposition of inventory in the ordinary course of business, (iii) a disposition
of obsolete or worn out equipment or equipment that is no longer useful in the
conduct of the business of the Company and its Restricted Subsidiaries and that
is disposed of in each case in the ordinary course of business, (iv) a transfer
involving assets with a Fair Market Value not in excess of $5,000,000, (v) any
sale of equity interests in, or Indebtedness or other securities of, an
Unrestricted Subsidiary, (vi) a disposition of all or substantially all of the
assets of the Company in a manner permitted pursuant to Article VIII and (vii)
any
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exchange or assignment in the ordinary course of business with any Person
engaged in a Related Business of rights to manufacture and market drugs or other
pharmaceutical products.
"Attributable Debt" in respect of a sale and leaseback transaction
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means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Average Life" means, as of the date of determination, with respect to
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any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to Preferred Stock multiplied by the
amount of such payment by (ii) the sum of all such payments.
"Bankruptcy Law" has the meaning specified in Section 4.1.
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"Bayer AG" shall mean Bayer AG, a German corporation, and its
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subsidiaries.
"Board of Directors" means either the Board of Directors of the
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Company or any committee of such Board of Directors duly authorized to act
hereunder.
"Business Day" means a day other than a Saturday, Sunday or other day
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on which commercial banks in New York City are authorized or required by law to
close.
"Capital Stock" means (i) any and all shares, interests,
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participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.
"Capitalized Lease Obligations" means, without duplication, all
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monetary obligations of the Company or any of its Restricted Subsidiaries under
any leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalized leases and, for purposes of this Indenture, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Change of Control" means (i) any sale, lease or other transfer (other
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than a bona fide pledge of assets to secure Indebtedness incurred in accordance
with the Indenture or under the Senior Credit Agreement) by the Company or any
Restricted Subsidiary of all or substantially all of the assets of the Company
to any Person as an entirety or substantially as
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an entirety in one transaction or a series of related transactions; (ii) the
Company consolidates or merges with or into another Person pursuant to a
transaction in which the outstanding Voting Shares of the Company are changed
into or exchanged for cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Shares of the Company are changed
into or exchanged for Voting Shares (other than Disqualified Stock) of the
surviving corporation and (b) the holders of the Voting Shares of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Shares of the surviving corporation immediately after
such transaction; (iii) a "person" or "group" (within the meaning of Section
13(d) or 14(d)(2) of the Exchange Act), other than a Permitted Holder or a group
consisting solely of Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 35% of all
Voting Shares of the Company then outstanding; (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66 % of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the Company
then in office; or (v) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
"Change of Control Offer" has the meaning set forth in Section 3.15.
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"Change of Control Purchase Date" has the meaning specified in Section
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3.15.
"Change of Control Purchase Price" has the meaning specified in
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Section 3.15.
"Code" means the Internal Revenue Code of 1986, as amended.
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"covenant defeasance option" has the meaning specified in Section
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9.1(b).
"Commission" means the Securities and Exchange Commission.
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"Company" means Schein Pharmaceutical, Inc., a Delaware corporation,
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and, subject to Article VIII, its successors and assigns.
"Consolidated Cash Flow" for any period means the Consolidated Net
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Income of the Company and its consolidated Restricted Subsidiaries for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense; plus (ii) Consolidated Interest
Expense; plus (iii) depreciation expense; plus (iv) amortization expense; plus
(v) any other non-cash expenses, in each case for such period.
"Consolidated Coverage Ratio," as of any date of determination, means
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the ratio of (i) the aggregate amount of Consolidated Cash Flow for the period
consisting of the most recent four consecutive fiscal quarters ending prior to
the date of such determination to (ii) Consolidated Interest Expense for such
period; provided, however, that (A) if the
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Company or any of its Restricted Subsidiaries has incurred any Indebtedness
since the beginning of such period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an incurrence of Indebtedness, or both, Consolidated Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness had
been incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such period, (B) if since the beginning of such period the Company or any
of its Restricted Subsidiaries shall have made any Asset Disposition,
Consolidated Cash Flow for such period shall be reduced by an amount equal to
the Consolidated Cash Flow (if positive) attributable to the assets which are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated Cash Flow (if negative) attributable thereto for such
period, and Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense attributable to any
Indebtedness of the Company or any of its Restricted Subsidiaries repaid,
repurchased, defeased or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset Disposition
for such period (or, if the Capital Stock of any Restricted Subsidiary of the
Company is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (C) if since the beginning of such period the
Company or any of its Restricted Subsidiaries (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary of the Company (or any
Person which becomes a Restricted Subsidiary of the Company) or an acquisition
of assets, including any Investment in a Restricted Subsidiary of the Company or
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, Consolidated Cash Flow and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period, and (D) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such period)
shall have made any Asset Disposition or any Investment or acquisition of assets
that would have required an adjustment pursuant to clause (B) or (C) above if
made by the Company or a Restricted Subsidiary of the Company during such
period, Consolidated Cash Flow and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
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"Consolidated Interest Expense" means, for any period, the total
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interest expense of the Company and its Restricted Subsidiaries, plus, to the
extent not included in such interest expense and without duplication, (i)
interest expense attributable to Capitalized Lease Obligations, (ii)
amortization of debt discount and debt issuance cost, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and banker's acceptance
financing, (vi) interest actually paid by the Company or any such Restricted
Subsidiary under any Guarantee of Indebtedness or other obligation of any other
Person, (vii) net costs associated with Interest Rate Agreements (including
amortization of fees), and (viii) the product of (a) all Preferred Stock
dividends in respect of all Preferred Stock of Restricted Subsidiaries of the
Company and Disqualified Capital Stock of the Company held by Persons other than
the Company or a Restricted Subsidiary multiplied by (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of the Company,
expressed as a decimal, in each case, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (loss)
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of the Company and its consolidated Restricted Subsidiaries; provided, however,
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that there shall not be included in such Consolidated Net Income: (i) any net
income (loss) of any Person if such Person is not a Restricted Subsidiary,
except that subject to the limitations contained in clause (iv) below, the
Company's equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below); (ii) any net income (loss) of any
person acquired by the Company or a Restricted Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;
(iii) any net income (loss) of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted Subsidiary, directly
or indirectly, to the Company, except that subject to the limitations contained
in (iv) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend (subject, in the case of a dividend that could have
been made to another Restricted Subsidiary, to the limitation contained in this
clause); (iv) any gain or loss realized upon the sale or other disposition of
any assets of the Company or its consolidated Restricted Subsidiaries which are
not sold or otherwise disposed of in the ordinary course of business and any
gain or loss realized upon the sale or other disposition of any Capital Stock of
any Person; (v) any extraordinary gain or loss; (vi) the cumulative effect of a
change in accounting principles; and (vii) any loss resulting from a charge for
acquired in-process research and development expenses incurred in connection
with the acquisition of any other Person permitted hereunder.
"Corporate Trust Office" means the office of the Trustee at which the
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corporate trust business of the Trustee shall, at any particular time, be
administered, which office is, at
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the date as of which this Indenture is dated, located at 101 Barclay Street, 421
West, New York, NY 10286, Attention: Corporate Trust Administration.
"Credit Agent"" means The Chase Manhattan Bank (formerly Chemical
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Bank), in its capacity as issuing bank, administrative agent and collateral
agent for the lenders party to the Senior Credit Agreement, or any successor or
successors thereto.
"Custodian" has the meaning specified in Section 4.1.
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"Default" means any event that is or, with the passage of time or the
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giving of notice or both, would be an Event of Default.
"Depository" shall mean The Depository Trust Company, its nominees,
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and their respective successors.
"Disqualified Capital Stock" means, with respect to any Person, any
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Capital Stock of such Person which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Capital Stock, or (iii) is redeemable at the option
of the holder thereof, in whole or in part, in each case on or prior to the
first anniversary of the final Stated Maturity of the Securities.
"Effective Registration" means that the Company shall have (i)
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commenced a Registered Exchange Offer for the Initial Notes pursuant to an
effective registration statement under the Securities Act or (ii) filed and
caused to become effective a Notes Shelf Registration under the Securities Act
for the sale of Securities by the Holders.
"Equity Interests" means Capital Stock and all warrants, options or
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other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" means any event or condition specified as such in
----------------
Section 4.1 which shall have continued for the period of time, if any, therein
designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Notes" has the meaning specified in the Recitals.
--------------
"Fair Market Value" means, with respect to any asset or property, the
-----------------
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy as determined by the Board of Directors
in good faith and evidenced by a resolution of the Board of Directors.
8
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect from time to time, including those set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP as in effect on the
date of this Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation of any other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
- -------- -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means (i) each of the Company's Restricted Subsidiaries
---------
existing on the date hereof and (ii) each other Person that executes a Guarantee
of the obligations of the Company under the Securities and this Indenture from
time to time, and their respective successors and assigns; provided, however,
-------- -------
that "Guarantor" shall not include any Person that is released from its
Guarantee of the obligations of the Company under the Securities and this
Indenture.
"Holder," "holder of Securities," "Securityholder" or other similar
------ -------------------- --------------
terms means the registered holder of a Security.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication), (i) the principal of and premium (if any)
in respect of Indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v)) entered into in the ordinary
course of business of such Person to the extent that such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
no later than the third business day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (other than accounts payable to trade creditors arising in
the ordinary course of business), which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services, (v) all Capitalized Lease
9
Obligations of such Person, (vi) all Indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness of such Person
-------- -------
shall be the lesser of (A) the Fair Market Value of such asset at such date of
determination or (B) the amount of such Indebtedness of such other Persons,
(vii) all Indebtedness of other Persons to the extent Guaranteed by such Person,
(viii) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Capital Stock or,
with respect to any Restricted Subsidiary of the Company, any Preferred Stock
(but excluding, in each case, any accrued dividends), and (ix) to the extent not
otherwise included in this definition, obligations of such Person under Interest
Rate Agreements. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"Indenture" means this instrument as originally executed and delivered
---------
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Initial Notes" has the meaning specified in the Recitals.
-------------
"Institutional Accredited Investor" shall mean an institution that is
---------------------------------
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Rate Agreement" means with respect to any Person any
-----------------------
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
----------
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person.
"Issue Date" means the date on which the Securities are originally
----------
issued.
"legal defeasance option" has the meaning specified in Section 9.1(b).
-----------------------
"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or any filing or recording of any
instrument or document in respect of the
10
foregoing, to secure payment of a debt or performance of an obligation or other
priority or preferential arrangement of any kind or nature whatsoever.
"Loan Agreement" means the Senior Subordinated Loan Agreement dated as
--------------
of December 20, 1996 among the Company, the financial institutions party thereto
as lenders and Societe Generale, as administrative agent.
"Loans" means the loans made to the Company pursuant to the Loan
-----
Agreement.
"Material Subsidiary" means (i) any Subsidiary of the Company which is
-------------------
a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act (as such Regulation is in effect on the
date hereof) and (ii) any other Subsidiary of the Company which is material to
the business, earnings, prospects, assets or condition, financial or otherwise,
of the Company and its Subsidiaries taken as a whole.
"Net Available Cash" from an Asset Disposition means cash payments
------------------
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to any Person owning a beneficial interest in assets subject
to sale or minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition, and (iv) the deduction of appropriate amounts
to be provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary of the Company after such
Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
-----------------
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Global Purchaser" has the meaning specified in Section 2.4(d).
--------------------
"Notes Shelf Registration" shall have meaning given such term in the
------------------------
Registration Rights Agreement.
11
"Offer" has the meaning specified in Section 3.10(a)(iii)(D).
-----
"Offer Amount" has the meaning specified in Section 3.10(c)(ii).
------------
"Offer Period" has the meaning specified in Section 3.10(c)(ii).
------------
"Officer" means the Chief Executive Officer, the President, the chief
-------
financial officer, the principal accounting officer, any executive vice
president, any senior vice president, the Controller, the Treasurer, the
Secretary or the Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed the Chief Executive
---------------------
Officer, the President, the chief financial officer, the principal accounting
officer, any executive vice president, any senior vice president, the
Controller, the Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
------------------
counsel who may be an employee of or counsel to the Company or who may be other
counsel satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 11.5, if and to the extent required hereby.
"outstanding" when used with reference to Securities, shall, subject
-----------
to the provisions of Section 6.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside, segregated and held in trust by the Company (if the
Company shall act as its own paying agent), provided that if such
--------
Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.6 (unless proof satisfactory to the Trustee is
presented that any of such Securities is held by a person in whose hands
such Security is a legal, valid and binding obligation of the Company).
12
"Permitted Foreign Company" means (a) any corporation, business trust,
-------------------------
joint venture, association, company or partnership formed under the laws of a
country (or any political subdivision thereof) other than the United States,
engaged primarily in any segment of the pharmaceutical or health-care industry
or ancillary thereto and at least 50% of the equity interest of which is held,
directly or indirectly, by the Company and Bayer AG (provided that, if
--------
applicable local law would not permit 50% of the equity interest in such an
entity to be held by the Company and Bayer Ag, such percentage may be as low as
49% if the Company and Bayer AG otherwise Control the applicable entity), (b)
any subsidiary of a Permitted Foreign Company described in clause (a) above and
(c) any wholly owned foreign subsidiary the only material assets of which are
securities of Permitted Foreign Companies described in clause (a) above.
"Permitted Holders" means (a)(i) the Persons listed on Schedule 1.1,
-----------------
(ii) any individual forming part of the senior management of the Company on the
date of this Indenture, (iii) any trust for the benefit of any of the foregoing
and/or any member of their immediate families and (iv) the estate or personal
representative of any of the foregoing, (b) any employee benefit plan (or
related trust) for the benefit of the employees of the Company and its
Restricted Subsidiaries and (c) Bayer AG and any of its subsidiaries.
"Permitted Investment" means an Investment by the Company or any of
--------------------
its Subsidiaries in (i) a Restricted Subsidiary of the Company or a Person which
will, upon making such Investment, become a Restricted Subsidiary; provided,
--------
however, that the primary business of such Subsidiary is a Related Business;
- -------
(ii) another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Subsidiary of the Company;
provided, however, that such Person's primary business is a Related Business;
- -------- -------
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
of its Subsidiaries, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans or
advances to employees (other than those referred to in clause (xi) below) made
in the ordinary course of business not in excess of $2,500,000 outstanding at
any time; (vii) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any of
its Subsidiaries or in satisfaction of judgments or claims; (viii) Interest Rate
Agreements which are entered into by the Company for bona fide hedging purposes
(as determined in good faith by the Board of Directors or senior management of
the Company) with respect to Indebtedness of the Company incurred without
violation of this Indenture or to customary commercial transactions of the
Company entered into in the ordinary course of business; (ix) any Investment
(other than a Temporary Cash Investment) evidenced by securities or other assets
received in connection with an Asset Disposition pursuant to Section 3.10; (x)
Investments, the payment for which consists exclusively of Equity Interests
(exclusive of Disqualified Capital Stock) in the Company; or (xi) loans to
employees made in connection with the exercise by them of options to purchase
shares of the common stock of the Company, provided that the proceeds of such
loans are used to purchase such shares and that such loans are secured by a
pledge of such shares so purchased.
13
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision hereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any corporation,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
---------
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"property" of any Person means all types of real, personal, tangible,
--------
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person under GAAP.
"Purchase Date" has the meaning specified in Section 3.10(c).
-------------
"QIB" shall mean a "qualified institutional buyer" as defined in Rule
---
144A under the Securities Act.
"record date" has the meaning specified in Section 2.4.
-----------
"Refinanced Indebtedness" has the meaning specified in Section
-----------------------
3.8(b)(xii).
"Refinancing Indebtedness" means Indebtedness issued in exchange for,
------------------------
or the proceeds of which are used to extend, refinance, renew, replace or refund
any Indebtedness permitted to be incurred pursuant to Section 3.8.
"Registered Exchange Offer" shall have the meaning given such term in
-------------------------
the Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration
-----------------------------
Rights Agreement dated as of December __, 1997, between the Company, the
Guarantors and Societe Generale with respect to the Securities.
"Related Business" means any segment of the pharmaceutical or health-
----------------
care industry or ancillary thereto.
"Representative" for any issue of Indebtedness shall mean the Person
--------------
acting as agent, trustee or in a similar representative capacity for the holders
of such Indebtedness, provided that if, and for so long as, any issue of
--------
Indebtedness lacks such a representative, then the Representative for such issue
of Indebtedness shall at all such times constitute the holders of a majority in
outstanding principal amount of the respective issue of Indebtedness.
14
"Restricted Global Security" has the meaning specified in Section
--------------------------
2.4(b).
"Restricted Payments" has the meaning specified in Section 3.9(a)(iv).
-------------------
"Restricted Securities" has the meaning specified in Section 2.4(d).
---------------------
"Restricted Securities Legend" has the meaning specified in Section
----------------------------
2.4.
"Restricted Subsidiary" shall mean any Subsidiary other than an
---------------------
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"Secured Indebtedness" means any Indebtedness of the Company secured
--------------------
by a Lien.
"Security" or "Securities" has the meaning specified in the Recitals.
-------- ----------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Senior Credit Agreement" means, collectively, the Senior Credit
-----------------------
Agreement, dated as of September 5, 1995, by and among the Company, the lenders
named therein, and The Chase Manhattan Bank (formerly Chemical Bank) as Credit
Agent for the lenders, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, as such
credit agreement and/or related documents may be amended, restated,
supplemented, renewed, replaced or otherwise modified from time to time whether
or not with the same agent or lenders and irrespective of any changes in the
terms and conditions thereof. Without limiting the generality of the foregoing,
the term "Senior Credit Agreement" shall include any amendment, amendment and
restatement, renewal, extension, restructuring, supplement or modification to
the Senior Credit Agreement and all refundings, refinancing and replacements of
any facility provided for therein, including any agreement or agreements, (i)
extending the maturity of any Indebtedness incurred thereunder or contemplated
thereby, (ii) adding or deleting borrowers or guarantors thereunder, or (iii)
increasing the amount of Indebtedness incurred thereunder or available to be
borrowed thereunder to the extent permitted under this Indenture.
"Senior Indebtedness" means all Indebtedness other than Subordinated
-------------------
Indebtedness.
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Indebtedness" means any Indebtedness of the Company
-------------------------
(whether outstanding on the Issue Date or thereafter incurred) that is
subordinate or junior in right of payment to the Securities.
15
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity (a) of which more than 50% of the total
voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person, or (iii) one or
more Subsidiaries of such Person or (b) that is or would otherwise be treated on
a consolidated basis with such Person under, and in accordance with, GAAP.
Unless otherwise specified herein, each reference to a Subsidiary shall refer to
a Subsidiary of the Company.
"Subsidiary Guarantee" has the meaning specified in Section 10.1.
--------------------
"Successor Company" has the meaning specified in Section 8.1(i).
-----------------
"Temporary Cash Investments" means any of the following: (i) any
--------------------------
Investment in direct obligations of the United States of America or any agency
or instrumentality thereof or obligations Guaranteed by the United States of
America or any agency or instrumentality thereof, (ii) Investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits aggregating in excess of
$500,000,000 (or the foreign currency equivalent thereof) and whose long-term
debt, or whose parent holding company's long-term debt, is rated "A" (or such
similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act), (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with a bank meeting the qualifications described in clause (ii) above, or (iv)
Investments in commercial paper, maturing not more than 180 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard
Poor's Ratings Group.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the entity identified as "Trustee" in the first
-------
paragraph hereof and, subject to the provisions of Article V, shall also include
any successor trustee.
"U.S. Government Obligations" means direct obligations (or
---------------------------
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and
16
credit of the United States of America is pledged and which are not callable or
redeemable at the issuer's option.
"Unrestricted Subsidiary" means (i) Schein Pharmaceutical
-----------------------
(Netherlands) B.V., Schein Pharmaceutical (Bermuda) Ltd., and Schein
Farmaceutica de Peru and (ii) any Subsidiary (other than a Subsidiary which
would constitute a Material Subsidiary) that at the time of determination shall
have been designated an Unrestricted Subsidiary by the Board of Directors of the
Company in the manner provided below and which remains so designated at the time
of determination. The Board of Directors of the Company may, by a Board
resolution delivered to the Trustee, designate any Restricted Subsidiary of the
Company (other than a Material Subsidiary) (including any newly acquired or
newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless
such Restricted Subsidiary owns any Capital Stock of, holds any Lien on any
property of, the Company or any Restricted Subsidiary, and provided that no
--------
Default or Event of Default shall have occurred and be continuing at the time of
or after giving effect to such designation. The Board of Directors of the
Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary
of the Company, provided that (i) no Default or Event of Default shall have
--------
occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such designation would, if incurred at such
time, have been permitted to be incurred for all purposes of this Indenture.
Any designation by the Board of Directors of the Company pursuant to the
Indenture shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board resolutions giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Shares" of a Person means all classes of Capital Stock of such
-------------
Person then outstanding and normally entitled to vote in the election of
directors or managers.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness or Disqualified Capital Stock, as the case may be, at any date, the
number of years obtained by dividing (a) the sum of the products obtained by
multiplying (x) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (y) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (b) the then outstanding principal amount or liquidation
preference, as
applicable, of such Indebtedness or Disqualified Capital Stock, as the case may
be.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
--------------------------
SECTION 2.1 Authentication and Delivery of Securities. Upon the
-----------------------------------------
execution and delivery of this Indenture, or from time to time thereafter,
Securities in an aggregate principal amount not to exceed $100,000,000 (except
as otherwise provided in Section 2.6)
17
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Securities to or
upon the written order of the Company, signed by its Chief Executive Officer,
President, chief financial officer, principal accounting officer, any senior
vice president, any executive vice president, its Controller, Treasurer or any
Assistant Treasurer or its Secretary or any Assistant Secretary without any
further action by the Company.
SECTION 2.2 Execution of Securities. The Securities shall be signed
-----------------------
on behalf of the Company by its Chief Executive Officer, President, chief
financial officer, principal accounting officer, any senior vice president, any
executive vice president, its Controller, Treasurer or any Assistant Treasurer
or its Secretary or any Assistant Secretary. Such signatures may be the manual
or facsimile signatures of the present or any future such officers.
Typographical and other minor errors or defects in any such reproduction of any
such signature shall not affect the validity or enforceability of any Security
which has been duly authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Company; and any Security may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such Securities as
-----------------------------
shall bear thereon a certificate of authentication substantially in the form set
forth in Exhibit A and Exhibit B, executed by the Trustee by manual signature of
one of its authorized signatories, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Company shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Indenture.
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
------------------------------------------------------
Interest. (a) The Initial Notes and the Trustee's certificate of
- --------
authentication shall be substantially in the form of Exhibit A hereto, and the
Exchange Notes and the Trustee's certificate of authentication shall be in
substantially the form of Exhibit B hereto, each of which is part of this
Indenture. The Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plans as the officers of
the Company executing the same may determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate insertions, omissions,
substitutions and variations, and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to general usage.
All Securities shall be otherwise substantially identical expect as to
denomination and as provided herein.
18
Each Security shall be dated the date of its authentication, shall
bear interest from the applicable date, and shall be payable on the dates
specified on the face of the form of Security recited above.
The Person in whose name any Security is registered at the close of
business on any record date with respect to any interest payment date shall be
entitled to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
that the Company shall default in the payment of the interest due on such
interest payment date, in which case such defaulted interest shall be paid to
the Persons in whose names outstanding Securities are registered at the close of
business on a subsequent record date (which shall be not less than five business
days prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Company to the holders of Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) shall mean if such interest payment date is the
first day of a calendar month, the fifteenth day of the next preceding calendar
month and shall mean, if such interest payment date is the fifteenth day of a
calendar month, the last day of the next preceding calendar month, whether or
not such record date is a business day.
(b) The Initial Notes are being offered and sold by the Company
pursuant to the Loan Agreement. The Initial Notes offered and sold to QIBs in
reliance on Rule 144A, except as provided in Section 2.4(d) hereof, shall be
issued initially in the form of one or more permanent global Securities in
definitive, fully registered form without interest coupons with the Global
Securities Legend and Restricted Securities Legend set forth in the form of
Initial Notes (the "Restricted Global Security") deposited with the Trustee, at
the Corporate Trust Office, as custodian for and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Restricted Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided.
(c) This Section 2.4(c) shall apply only to the Restricted Global
Security deposited with or on behalf of the Depository.
Members of, or participants in, the Depository (the "Agent Members")
shall have no rights under this Indenture with respect to any Restricted Global
Security held on their behalf by the Depository or under the Restricted Global
Security, and the Depository may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the absolute owner of the Restricted
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
19
(d) Except as provided in this Section 2.4(d) and Section 2.8, owners
of beneficial interests in the Restricted Global Security will not be entitled
to receive physical delivery of certificated Initial Notes. Purchasers of
Initial Notes who are not QIBs or QIBs who elect to receive certificated Initial
Notes instead of holding their interest through the Restricted Global Security
(collectively, the "Non-Global Purchasers") will receive certificated Initial
Notes bearing the Restricted Securities Legend (the "Restricted Securities");
provided, however, that upon transfer to a QIB of any such certificated Initial
- -------- -------
Notes initially issued to a Non-Global Purchaser, such certificated Initial
Notes will, unless the transferee requests otherwise or the Restricted Global
Security has previously been exchanged in whole for Restricted Securities, be
exchanged for an interest in the Restricted Global Security pursuant to the
provisions of Section 2.5. Restricted Securities will bear the Restricted
Securities Legend unless removed in accordance with Section 2.5.
Upon the occurrence of an Effective Registration involving a Notes
Shelf Registration, all requirements with respect to the Restricted Global
Security and legends on Initial Notes will cease to apply, and certificated
Initial Notes without the Restricted Securities Legend will be available to the
Holders. Upon the occurrence of an Effective Registration involving the
Registered Exchange Offer, all requirements with respect to the Restricted
Global Security will cease to apply and certificated Initial Notes with the
"Restricted Securities Legend" will be available to Holders that do not exchange
their Initial Notes for Exchange Notes, and certificated Exchange Notes without
any legends will be available to Holders that exchange their Initial Notes for
Exchange Notes.
All certificated Securities shall be issuable in denominations of
$1,000 principal amount and any integral multiple thereof.
SECTION 2.5 Registration, Transfer and Exchange. (a) The Company
-----------------------------------
will keep at each office or agency to be maintained for the purpose as provided
in Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Security at
each such office or agency, the Company shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate principal
amount. Securities to be exchanged shall be surrendered at each office or
agency to be maintained by the Company for the purpose as provided in Section
3.2, and the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor the Security or Securities which the Securityholder
making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
20
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Company or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the holder or his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities. No service charge shall be made for
any such transaction.
The Trustee shall not be required to exchange or register a transfer
of (a) any Securities for a period of 15 days next preceding the mailing of
notice of redemption of Securities to be redeemed and ending on the date of such
mailing or (b) any Securities selected, called or being called for redemption
except, in the case of any Security where public notice has been given that such
Security is to be redeemed in part, the portion thereof not so to be redeemed.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
(b) Notwithstanding any provision to the contrary herein, so long as
the Restricted Global Security remains outstanding and is held by or on behalf
of the Depository, transfers of the Restricted Global Security, in whole or in
part, shall only be made in accordance with Section 2.4(d) and this Section 2.5
as set forth below.
(i) Subject to clauses (ii) through (iv) below, transfers of the
Restricted Global Security shall be limited to transfers of the Restricted
Global Security in whole, but not in part, to nominees of the Depository or
to a successor of the Depository or such successor's nominee.
(ii) Restricted Global Security to Restricted Security. If a
-------------------------------------------------
holder of a beneficial interest in the Restricted Global Security deposited
with the Depository wishes at any time to transfer its interest therein to
a Person who wishes to take delivery thereof in the form of a Restricted
Security, such holder may, subject to the rules and procedures of the
Depository, cause the exchange of such interest for one or more Restricted
Securities of any authorized denomination or denominations and of the same
aggregate principal amount. Upon receipt by the Trustee at its Corporate
Trust Office of (1) instructions from the Depository directing the Trustee
to authenticate and deliver one or more Restricted Securities of the same
aggregate principal amount as the beneficial interest in the Restricted
Global Security to be exchanged, such instructions to contain the name or
names of the designated transferee or transferees, the authorized
denomination or denominations of the Restricted Securities to be so issued
and appropriate delivery instructions, (2) a certificate in the form of
Exhibit C attached hereto given by the holder of such beneficial interest
and stating that the
21
Person transferring such interest in the Restricted Global Security
reasonably believes that the Person acquiring the Restricted Securities for
which such interest is being exchanged is an Institutional Accredited
Investor and is acquiring such Restricted Securities for its own account or
for one or more accounts as to which the transferee exercises sole
investment discretion, (3) a certificate in the form of Exhibit D attached
hereto given by the Person acquiring the Restricted Securities for which
such interest is being exchanged, to the effect set forth therein, and (4)
an opinion of counsel to the holder of such beneficial interest in the form
of Exhibit E attached hereto, to the effect set forth therein, then the
Trustee will instruct the Depository to reduce the Restricted Global
Security by the aggregate principal amount of the beneficial interest
therein to be exchanged, and concurrently with such reduction the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Restricted Securities of the same aggregate principal amount, in accordance
with the instructions referred to above.
(iii) Restricted Security to Restricted Global Security. If
-------------------------------------------------
a holder of a Restricted Security wishes at any time to transfer such
Restricted Security to a Person who wishes to take delivery thereof in the
form of an interest in the Restricted Global Security, such holder may,
subject to the rules and procedures of the Depository, cause the exchange
of such Restricted Security for an equivalent beneficial interest in the
Restricted Global Security. Upon receipt by the Trustee at its Corporate
Trust Office of (1) such Restricted Security, duly endorsed as provided
herein, (2) instructions from such holder directing the Trustee to credit
or cause to be credited a beneficial interest in the Restricted Global
Security equal to the principal amount of the Restricted Security to be
exchanged, such instructions to contain information regarding the
participant account with the Depository to be credited with such interest,
and (3) a certificate in the form of Exhibit F attached hereto, then the
Trustee shall cancel or cause to be cancelled such Restricted Security and
shall instruct the Depository to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest
in the Restricted Global Security equal to the principal amount of the
Restricted Security so cancelled.
(iv) Restricted Security to Restricted Security. If a holder of
------------------------------------------
a Restricted Security wishes at any time to transfer such Restricted
Security to a Person who wishes to take delivery thereof in the form of a
Restricted Security, such holder may, subject to the restrictions on
transfer set forth herein and in such Restricted Security, cause the
exchange of such Restricted Securities for one or more Restricted
Securities of any authorized denomination or denominations and of the same
aggregate principal amount. Upon receipt by the Trustee at its Corporate
Trust Office of (1) such Restricted Security, duly endorsed as provided
herein, (2) instructions from such holder directing the Trustee to
authenticate and deliver one or more Restricted Securities of the same
aggregate principal amount as the Restricted Security to be exchanged, such
instructions to contain the name or names of the designated transferee or
transferees, the authorized denomination or denominations of the Restricted
Securities to be so issued and appropriate delivery instructions, (3) a
certificate from the holder of the Restricted Security to be exchanged in
the form of Exhibit C attached hereto (in the event that the transfer is
being made to an Institutional Accredited
22
Investor otherwise than pursuant to Rule 144A), (4) a certificate in the
form of Exhibit D attached hereto (in the event the transfer is being made
to an Institutional Accredited Investor otherwise than pursuant to Rule
144A) given by the Person acquiring the Restricted Securities for which
such interest is being exchanged, to the effect set forth therein, and (5)
an opinion of counsel to the transferor of such Restricted Security in the
form of Exhibit E hereto, to the effect set forth therein, then the Trustee
shall cancel or cause to be cancelled such Restricted Security and,
concurrently therewith, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Restricted Securities of the same
aggregate principal amount, in accordance with the instructions referred to
above.
(v) Other Exchanges. In the event that the Restricted Global
---------------
Security is exchanged pursuant to Section 2.8 for Securities in definitive
registered form without interest coupons, prior to an Effective
Registration such Initial Notes may be exchanged for one another only in
accordance with those procedures that are substantially consistent with the
provisions of clauses (i) through (iv) above (including the certification
requirements thereof intended to insure that such transfers comply with the
Securities Act) and which may be from time to time adopted by the Company
and the Trustee.
If Initial Notes are issued upon the transfer, exchange or replacement
of Initial Notes bearing the Restricted Securities Legend, or if a request is
made to remove such Restricted Securities Legend on Initial Notes, the Initial
Notes so issued shall bear the Restricted Securities Legend, or the Restricted
Securities Legend shall not be removed, as the case may be, unless (i) there is
delivered to the Company such satisfactory evidence, which may include an
opinion of counsel licensed to practice law in the State of New York, as may be
reasonably required by the Company that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of the Securities Act or, with respect to Restricted
Securities, that such Initial Notes are not "restricted" within the meaning of
Rule 144 under the Securities Act or (ii) there is an Effective Registration
involving the Notes Shelf Registration with respect to the Initial Notes then in
effect or the Initial Note as to which the Restricted Securities Legend is
sought to be removed has been disposed of in accordance with the Notes Shelf
Registration. Upon (i) provision of such satisfactory evidence or (ii)
notification by the Company to the Trustee of an Effective Registration with
respect to the Initial Notes, the Trustee, at the direction of the Company,
shall authenticate and deliver Initial Notes that do not bear the Restricted
Securities Legend.
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
----------------------------------------------
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Company in
its discretion may execute, and upon the written request of any officer of the
Company, the Trustee shall authenticate and deliver, a new Security, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so apparently destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Company and to the Trustee and any
agent of the Company or the Trustee such
23
security or indemnity as may be required by them to indemnify and defend and to
save each of them harmless and, in every case of destruction, loss or theft
evidence to their satisfaction of the apparent destruction, loss or theft of
such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Security
which has matured or is about to mature, or has been called for redemption in
full, shall become mutilated or defaced or be apparently destroyed, lost or
stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Company and to the Trustee and any agent of the Company or the
Trustee such security or indemnity as any of them may require to save each of
them harmless from all risks, however remote, and, in every case of apparent
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee and any agent of the Company or the Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section by virtue of the fact that any Security is apparently destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the apparently destroyed, lost or stolen Security shall be at any
time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder. All Securities shall be held and owned upon the
express condition that, to the extent permitted by law, the foregoing provisions
are exclusive with respect to the replacement or payment of mutilated, defaced,
or apparently destroyed, lost or stolen Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.7 Cancellation of Securities; Destruction Thereof. All
-----------------------------------------------
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Company or any agent of the Company or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall deliver cancelled Securities held by it to the
Company. If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee for cancellation.
SECTION 2.8 Temporary Securities; Global Securities. Pending the
---------------------------------------
preparation of definitive Securities, the Company may execute and the Trustee
shall authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities shall be issuable as registered Securities
without coupons, of any authorized denomination, and
24
substantially in the form of the definitive Securities but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Company with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as may
be appropriate. Every temporary Security shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities. Without
unreasonable delay, the Company shall execute and shall furnish definitive
Securities and thereupon temporary Securities may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Company
for the purpose pursuant to Section 3.2, and the Trustee shall authenticate and
deliver in exchange for such temporary Securities a like aggregate principal
amount of definitive Securities of authorized denominations. Until so exchanged
the temporary Securities shall be entitled to the same benefits under this
Indenture as definitive Securities.
The Restricted Global Security deposited with the Depository pursuant
to Section 2.4 shall be transferred to the beneficial owners thereof only if
such transfer complies with Section 2.5(b) of this Indenture and (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Restricted Global Security or if at any time such Depository
ceases to be a "clearing agency" registered under the Exchange Act and a
successor depositary is not appointed by the Company within 90 days of such
notice, (ii) the Company executes and delivers to the Trustee an Officers'
Certificate stating that such Global Restricted Security shall be exchangeable,
or (iii) an Event of Default has occurred and is continuing with respect to the
Securities.
Any Restricted Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.8 shall be surrendered by the
Depository to the Trustee at its Corporate Trust Office, to be so transferred,
in whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Restricted
Global Security, an equal aggregate principal amount of Restricted Securities of
authorized denominations. Any portion of the Restricted Global Security
transferred pursuant to this Section 2.8 shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depository shall direct. Any Initial Note
delivered in exchange for an interest in the Restricted Global Security shall,
except as otherwise provided by Section 2.5, bear the Restricted Securities
Legend.
Subject to the foregoing provisions of this Section 2.8, the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
In the event of the occurrence of either of the events specified in
the second paragraph of this Section 2.8, the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
25
SECTION 2.9 Effective Registration. In the event the Company has an
----------------------
Effective Registration, the Company shall notify the Trustee thereof in writing
within two Business Days after the effective date of such Effective
Registration. If the Effective Registration involves a Notes Shelf
Registration, the Company shall promptly cause to be delivered to the Trustee
certificates for Initial Notes without legends and instructions to the Trustee
to authenticate and deliver certificated Initial Notes without legends to
Holders presenting their certificated Initial Notes for exchange or to Holders
of interests in the Restricted Global Security in the names and denominations
specified by the Depository or to transferees of Initial Notes covered by the
Notes Shelf Registration. If the Effective Registration is with respect to a
Registered Exchange Offer for the Initial Notes, the Trustee shall notify the
Holders of receipt of such notice and, after receipt of a written order of the
Company (signed as specified in Section 2.1) for the authentication and delivery
of Exchange Notes and a properly completed letter of transmittal, ATOP
notification or other requested documents from a Holder as specified in the
exchange offer documents, shall exchange such Holder's Initial Notes for
Exchange Notes upon the terms set forth in the exchange offer documents.
SECTION 2.10 CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
COVENANTS OF THE COMPANY
------------------------
SECTION 3.1 Payment of Principal and Interest. The Company covenants
---------------------------------
and agrees that it will duly and punctually pay or cause to be paid the
principal of, and interest on, each of the Securities at the place or places, at
the respective times and in the manner provided in the Securities. Each
installment of interest on the Securities may be paid by mailing checks for such
interest payable to or upon the written order of the holders of Securities
entitled thereto as they shall appear on the registry books of the Company.
SECTION 3.2 Offices for Payments, etc. So long as any of the
-------------------------
Securities remain outstanding, the Company will maintain in the City of New York
the following: (a) an office or agency where the Securities may be presented
for payment, (b) an office or agency where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided and (c)
an office or agency where notices and demands to or upon the Company in respect
of the Securities or of this Indenture may be served. The Company will give to
the Trustee written notice of the location of any such office or agency and of
any change of location thereof. The Company hereby initially designates the
Corporate Trust Office of the Trustee or such other location as the Company may
designate upon notice from
26
the Trustee, as the office or agency for each such purpose. In case the Company
shall fail to maintain any such office or agency or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
--------------------------------------------------
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 5.9, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 3.4 Paying Agents. The paying agent will initially be the
-------------
Trustee. Whenever the Company shall appoint a paying agent other than the
Trustee, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such
sums have been paid to it by the Company or by any other obligor on the
Securities) in trust for the benefit of the holders of the Securities or of
the Trustee,
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of
the principal of or interest on the Securities when the same shall be due
and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Company will, prior to each due date of the principal of or
interest on the Securities, deposit with the paying agent a sum sufficient to
pay such principal or interest, and (unless such paying agent is the Trustee)
the Company will promptly notify the Trustee of any failure to take such action.
If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of or interest on the Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Securities a sum sufficient to pay such principal or interest so becoming due.
The Company will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Company
may at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Company or any paying agent hereunder, as required
by this Section, such sums to be held by the Trustee upon the trusts herein
contained. Upon such payment to the Trustee, the relevant paying agent, if any,
shall be released from any liability with respect to such sums.
27
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to the
provisions of Sections 9.4 and 9.6.
SECTION 3.5 Certificate to Trustee. The Company will furnish to the
----------------------
Trustee, on or before 120 days after the end of each fiscal year of the Company
ending after the date hereof, an Officers' Certificate from the principal
executive, financial or accounting officer of the Company as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture (such compliance to be determined without regard to any period of
grace or requirement of notice provided under this Indenture).
SECTION 3.6 Securityholders' Lists. If and so long as the Trustee
----------------------
shall not be the Security registrar, the Company will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the holders of the Securities pursuant to
Section 312 of the Trust Indenture Act (a) quarterly not more than 15 days after
each record date for the payment of quarterly interest on the Securities, as
hereinabove specified, as of such record date and (b) at such other times as the
Trustee may request in writing, within 30 days after receipt by the Company of
any such request as of a date not more than 15 days prior to the time such
information is furnished.
SECTION 3.7 Commission Reports. Notwithstanding that the Company may
------------------
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, so long as any Securities are outstanding, the Company will
furnish to the Trustee and the holders of Securities (i) within 45 days after
the end of each of the first three fiscal quarters of each fiscal year and 90
days of the end of each fiscal year all quarterly and annual financial
information, as the case may be, that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were required
to file such Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports.
In addition, whether or not required by the rules and regulations of the
Commission, the Company will file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. Furthermore, for so long as any of the
Securities remain outstanding, the Company shall make available to any
prospective purchaser of the Securities or beneficial owner of the Securities,
in connection with any sale thereof, the information required by Rule 144A(d)(4)
under the Securities Act. The Company will also comply with the provisions of
Section 314(a) of the Trust Indenture Act.
SECTION 3.8 Limitation on Indebtedness. (a) The Company shall not,
--------------------------
and shall not permit any of its Restricted Subsidiaries to, incur any
Indebtedness; provided, however, that the Company may incur Indebtedness
-------- -------
(including through the issuance of Disqualified Capital Stock) if on the date of
such incurrence the Consolidated Coverage Ratio would be greater than (i)
2.50:1, if such Indebtedness is incurred prior to the expiration of 24
28
months after the Issue Date and (ii) 3.00:1, if such Indebtedness is incurred on
or subsequent to the expiration of 24 months after the Issue Date.
(b) Notwithstanding Section 3.8(a), the Company and its Restricted
Subsidiaries may incur Indebtedness to the extent set forth below:
(i) the incurrence by the Company of Indebtedness under the
Senior Credit Agreement and the issuance of letters of credit thereunder
(with letters of credit being deemed to have a principal amount equal to
the undrawn amount of the letters of credit plus any unreimbursed drawings
thereon) up to an aggregate principal amount of $250,000,000 outstanding at
any one time, less principal repayments of term loans and permanent
commitment reductions with respect to revolving loans and letters of credit
under the Senior Credit Agreement made after the Issuance Date with the Net
Cash Proceeds of Asset Dispositions, if any;
(ii) Indebtedness (x) of the Company to any Restricted
Subsidiary and (y) of any Restricted Subsidiary to the Company or any other
Restricted Subsidiary;
(iii) Indebtedness of the Company represented by the
Securities;
(iv) any Indebtedness of the Company (other than the
Indebtedness described in clauses (i) and (ii) above) outstanding on the
date of this Indenture;
(v) Indebtedness represented by the Guarantees of the
Securities and Guarantees of Indebtedness incurred pursuant to clause (i)
above;
(vi) Indebtedness of the Company or any Restricted Subsidiary
under Interest Rate Agreements that are entered into by the Company or such
Restricted Subsidiary for bona fide hedging purposes (as determined in good
faith by the Board of Directors or senior management of the Company or such
Restricted Subsidiary) with respect to Indebtedness of the Company or such
Restricted Subsidiary incurred without violation of this Indenture or with
respect to customary commercial transactions of the Company or such
Restricted Subsidiary entered into in the ordinary course of business;
(vii) Indebtedness (including Capitalized Lease Obligations)
incurred by the Company or any Restricted Subsidiary to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness then
outstanding and incurred pursuant to this clause (vii), does not exceed
$25,000,000;
(viii) Indebtedness incurred by the Company or any Restricted
Subsidiary constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of
29
workers' compensation claims or self-insurance, or other Indebtedness with
respect to reimbursement type obligations regarding workers' compensation
claims; provided, that upon the drawing of such letters of credit or the
--------
incurrence of such Indebtedness, such obligations are reimbursed within 30
days following such incurrence;
(ix) Acquired Indebtedness; provided, however, that such
-------- -------
Indebtedness is not incurred in contemplation of such acquisition or
merger; and provided, further that the Company would have been able to
-------- -------
incur such Indebtedness at the time of the incurrence thereof pursuant to
clause (a) above, determined on a pro forma basis as if such transaction
had occurred at the beginning of such four-quarter period and such
Indebtedness and the operating results of such merged or acquired entity
had been included for all purposes in such pro forma calculation as if such
entity had been a Restricted Subsidiary at the beginning of such four-
quarter period;
(x) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business;
(xi) additional indebtedness in an aggregate amount not to
exceed $10,000,000 at any one time outstanding; and
(xii) Refinancing Indebtedness; provided, however, that (A)
-------- -------
the principal amount of such Refinancing Indebtedness shall not exceed the
principal or accreted amount (in the case of any Indebtedness issued with
original issue discount, as such) of Indebtedness so extended, refinanced,
renewed, replaced, substituted or refunded (the "Refinanced Indebtedness"),
(B) the Refinancing Indebtedness shall have a Weighted Average Life to
Maturity of not less than the stated maturity of the Refinanced
Indebtedness, and (C) the Refinancing Indebtedness shall rank in right of
payment relative to the Securities on terms at least as favorable to the
holders of Securities as those contained in the documentation governing the
Refinanced Indebtedness.
(c) Notwithstanding any other provision of this Section 3.8, neither
the Company nor any Restricted Subsidiary shall incur any Indebtedness (i)
pursuant to Section 3.8(b), if the proceeds thereof are used, directly or
indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any
Subordinated Indebtedness unless such Indebtedness shall be subordinated to the
Securities to at least the same extent as such Subordinated Indebtedness or (ii)
pursuant to Section 3.8(a) or Section 3.8(b) if such Indebtedness is subordinate
or junior in ranking in any respect to any Senior Indebtedness unless such
Indebtedness is expressly subordinated in right of payment to such Senior
Indebtedness.
(d) The Company shall not incur any Secured Indebtedness that is not
Senior Indebtedness.
SECTION 3.9 Limitation on Restricted Payments. (a) The Company shall
---------------------------------
not, and shall not permit any Restricted Subsidiary to, directly or indirectly:
30
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of its Capital Stock (other than dividends or
distributions payable solely in shares of its Capital Stock (other than
Disqualified Capital Stock) or in options, warrants or other rights to
acquire such Capital Stock and other than dividends and distributions paid
by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of the Capital Stock of the Company or
any Restricted Subsidiary or options, warrants or other rights to acquire
such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to the relevant
scheduled principal payment, sinking fund or maturity, any Subordinated
Indebtedness; or
(iv) make any Investment in any Person, including, without
limitation, any Unrestricted Subsidiary (other than a Permitted Investment)
(the foregoing actions described in clauses (i) through (iv) above being
hereinafter collectively referred to as "Restricted Payments") unless after
giving effect to the proposed Restricted Payment, (A) no Default or Event of
Default shall have occurred and be continuing and such Restricted Payment shall
not cause or constitute a Default or an Event of Default; (B) immediately before
and immediately after giving effect to such transaction on a pro forma basis,
the Company could incur at least $1.00 of additional Indebtedness pursuant to
Section 3.8(a); and (C) the aggregate amount of all such Restricted Payments
(the amount of any such Restricted Payment, if other than cash, to be determined
in good faith by the Board of Directors of the Company, whose determination
shall be conclusive and evidenced by a resolution of the Board of Directors)
declared or made after the Issue Date (including such Restricted Payment) does
not exceed the sum of:
(1) 50% of the aggregate cumulative Consolidated Net Income (or, if
such aggregate cumulative Consolidated Net Income shall be a loss, minus
100% of such loss) of the Company accrued on a cumulative basis during the
period (taken as one accounting period) from the fiscal quarter that first
begins after the Issue Date to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the
time of such Restricted Payment;
(2) the aggregate Net Cash Proceeds received after the Issue Date by
the Company from the issuance or sale (other than to any of its
Subsidiaries) of its shares of Capital Stock (other than Disqualified
Capital Stock) or any options, warrants or rights to purchase such shares
of Capital Stock (other than Disqualified Capital Stock) or other cash
contributions to its capital (excluding amounts used pursuant to clauses
(ii) or (iii) of Section 3.9(b));
31
(3) the aggregate Net Cash Proceeds received after the Issue Date by
the Company (other than from any of its Subsidiaries) upon the exercise of
any options, warrants or rights to purchase shares of Capital Stock (other
than Disqualified Capital Stock) of the Company;
(4) the aggregate Net Cash Proceeds received after the Issue Date by
the Company from Indebtedness of the Company or Disqualified Capital Stock
of the Company that has been converted into or exchanged for Capital Stock
(other than Disqualified Capital Stock) of the Company or options, warrants
or rights to acquire such Capital Stock, to the extent such Indebtedness of
the Company or Disqualified Capital Stock of the Company was originally
incurred or issued for cash, plus the aggregate Net Cash Proceeds received
by the Company at the time of such conversion or exchange;
(5) to the extent not included in Consolidated Net Income, the net
reduction (received by the Company or any Restricted Subsidiary in cash) in
Investments (other than Permitted Investments) made by the Company and the
Restricted Subsidiaries since the Issue Date, not to exceed, in the case of
any Investments in any Person, the amount of Investments (other than
Permitted Investments) made by the Company and the Restricted Subsidiaries
in such Person since the Issue Date.
(b) Notwithstanding Section 3.9(a) and in the case of clauses (v) and
(vii) below, so long as there is no Default or Event of Default continuing, the
following actions shall not be prohibited:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment would
be permitted by the provisions of Section 3.9(a) (such payment being deemed
to have been paid on such date of declaration for purposes of the
calculation required by this Section 3.9);
(ii) the repurchase, redemption, or other acquisition or
retirement of any shares of any class of Capital Stock of the Company or
warrants, options or other rights to acquire such stock in exchange for, or
out of the Net Cash Proceeds of a substantially concurrent issue and sale
(other than to a Subsidiary) for cash of, any Capital Stock (other than
Disqualified Capital Stock) of the Company or warrants, options or other
rights to acquire such Capital Stock;
(iii) any repurchase, redemption, defeasance, retirement,
refinancing or acquisition for value or payment of principal of any
Subordinated Indebtedness in exchange for, or out of the net proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) for
cash of, any Capital Stock (other than Disqualified Capital Stock) of the
Company or warrants, options or other rights to acquire such Capital Stock;
32
(iv) the repurchase, redemption, defeasance, retirement or
other acquisition for value or payment of principal of any Subordinated
Indebtedness through the issuance of Refinancing Indebtedness;
(v) investments in Permitted Foreign Companies in a net
aggregate amount not to exceed $10,000,000 in any fiscal year, provided,
--------
however, that, to the extent the net aggregate amount of such investments
-------
in any fiscal year is less than $10,000,000, 50% of such difference may be
carried forward and added to the $10,000,000 permitted amount for the
subsequent fiscal year;
(vi) Investments in Cheminor Drugs Limited and Dr. Reddy's
Laboratories Limited having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (vi) that are at
the time outstanding, not to exceed $10.0 million; and
(vii) additional Investments (including, without limitation,
Unrestricted Subsidiaries) having an aggregate fair market value, taken
together with all other Investments made pursuant to this paragraph (vii)
that are at the time outstanding, not to exceed $15,000,000 at the time of
such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes
in value).
The actions described in clauses (i) and (vii) of this Section 3.9(b) shall be
Restricted Payments that shall be permitted to be made in accordance with this
Section 3.9(b) but shall reduce the amount that would otherwise be available for
Restricted Payments under Section 3.9(a)(C) (provided that any dividend paid
--------
pursuant to clause (i) of this Section 3.9(b) shall reduce the amount that would
otherwise be available under Section 3.9(a)(C) when declared, but not also when
paid pursuant to such clause (i)) and the actions described in clauses (ii),
(iii), (iv), (v) and (vi) of this Section 3.9(b) shall be permitted to be taken
in accordance with this Section 3.9 and shall not reduce the amount that would
otherwise be available for Restricted Payments under Section 3.9(a)(C).
SECTION 3.10 Limitation on Sales of Assets and Subsidiary Stock. (a)
--------------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to, make
any Asset Disposition unless (i) the Company or such Restricted Subsidiary
receives consideration (including by way of relief from, or by any other Person
assuming sole responsibility for, any liabilities, contingent or otherwise) at
the time of such Asset Disposition at least equal to the Fair Market Value of
the shares or assets that are the subject matter of such Asset Disposition, (ii)
at least 80% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash; and (iii) an amount equal to 100%
of the Net Available Cash from such Asset Disposition is applied by the Company
(or such Restricted Subsidiary, as the case may be) (A) first, to the extent the
-----
Company elects (or is required by the terms of the Senior Credit Agreement), to
prepay, repay or purchase such indebtedness incurred under the Senior Credit
Agreement within 180 days after the later of the date of such Asset Disposition
or the receipt of such Net Available Cash, (B) second, to the extent of the
------
balance of Net Available Cash after application in accordance with clause (A),
to the extent the
33
Company elects, to secure letter of credit obligations to the extent such
related letters of credit have not been drawn upon or returned undrawn; (C)
third, to the extent of the balance of Net Available Cash after application in
- -----
accordance with clauses (A) and (B), to the extent the Company or such
Restricted Subsidiary elects, within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash, to reinvest in
Additional Assets; and (D) fourth, to the extent of the balance of such Net
------
Available Cash after application in accordance with clauses (A), (B) and (C), to
make an offer (the "Offer") to purchase Securities pursuant and subject to the
conditions of this Indenture to the holders of the Securities at a purchase
price of 100% of the principal amount thereof plus accrued and unpaid interest
to the purchase date; provided, however, that, in connection with any
-------- -------
prepayment, repayment or purchase of Indebtedness pursuant to clause (A) or (B)
above, the Company or such Restricted Subsidiary shall retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased. The
Company shall not be required to make an offer for Securities pursuant to this
Section 3.10 if the Net Available Cash available therefor (after application of
the proceeds as provided in clauses (A), (B) and (C)) is less than $15,000,000
(which lesser amount shall be carried forward for purposes of determining
whether an offer is required with respect to the Net Available Cash from any
subsequent Asset Disposition).
For the purposes of Section 3.10(a)(ii), the following will be deemed
to be cash: (x) the assumption of Indebtedness (other than Disqualified Capital
Stock) of the Company or any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition and (y) securities received by the
Company or any Restricted Subsidiary of the Company from the transferee that are
promptly converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (iii)(D) of Section 3.10(a), the Company will
be required to purchase Securities tendered pursuant to an offer by the Company
for the Securities at a purchase price of 100% of their principal amount plus
accrued interest to the purchase date in accordance with the procedures
(including prorating in the event of oversubscription) set forth in Section
3.10(c).
(c) (i) Promptly, and in any event within 10 days after the Company
is required to make an Offer, the Company shall deliver to the Trustee and
send, by first class mail to each Holder, a written notice stating that the
Holder may elect to have his or her Securities purchased by the Company
either in whole or in part (subject to prorating as hereinafter described
in the event the Offer is oversubscribed) in integral multiples of $1,000
of principal amount, at the applicable purchase price. Such notice
delivered to each Holder shall identify the Security, including CUSIP
numbers, and shall specify the purchase date, which date shall not be less
than 30 days nor more than 60 days after the date of such notice (the
"Purchase Date"), the place or places of payment and that the payment will
be made upon presentation and surrender of the Security.
34
(ii) Not later than the date upon which such written notice of an
Offer is delivered to the Trustee and the Holders, the Company shall
deliver to the Trustee an Officers' Certificate setting forth (A) the
amount of the Offer (the "Offer Amount"), (B) the allocation of the Net
Available Cash from the Asset Dispositions as a result of which such Offer
is being made and (C) the compliance of such allocation with the provisions
of Section 3.10(a). Upon the expiration of the period (the "Offer Period")
for which the Offer remains open, the Company shall deliver to the Trustee
for cancellation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee
shall, on the Purchase Date, mail or deliver payment to each tendering
Holder in the amount of the purchase price of the Securities tendered by
such Holder to the extent such funds are available to the Trustee.
(iii) Holders electing to have a Security purchased
will be required to surrender the Security, together with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Security duly
executed, to the Company at the address specified in the notice prior to
the expiration of the Offer Period. Each Holder will be entitled to
withdraw its election if the Trustee or the Company receives, not later
than one Business Day prior to the expiration of the Offer Period, a
facsimile transmission or letter from such Holder setting forth the name of
such Holder, the principal amount of the Security or Securities which were
delivered for purchase by such Holder and a statement that such Holder is
withdrawing its election to have such Security or Securities purchased. If
at the expiration of the Offer Period the aggregate principal amount of
Securities surrendered by Holders exceeds the Offer Amount, the Company
shall select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall
be purchased). Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion
of the Securities surrendered.
(d) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other securities laws or
regulations in connection with the repurchase of Securities pursuant to this
Section 3.10.
To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.10, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.11 Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any
- -----------------------
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary (a) to pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness owed to the Company or any Restricted
Subsidiary, (b) to make any loans or advances to the Company or any Restricted
Subsidiary or (c) to transfer any of its property or assets to the Company or
any Restricted
35
Subsidiary, except: (i) any encumbrance or restriction pursuant to an agreement
in effect at or entered into on the Issue Date; (ii) any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to an agreement
relating to any Indebtedness incurred by such Restricted Subsidiary on or prior
to the date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company) and outstanding
on such date; (iii) any encumbrance or restriction pursuant to an agreement
effecting a refinancing of Indebtedness incurred pursuant to an agreement
referred to in clause (i) or (ii) of this Section 3.11 or contained in any
amendment to an agreement referred to in clause (i) or (ii) of this Section
3.11; provided, however, that the encumbrances and restrictions with respect to
-------- -------
such Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable in any material respect to the holders of the
Securities than encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such agreements; and (iv) in the case of Section
3.11(c), any encumbrance or restriction (A) that restricts in a customary manner
the subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset that is the subject
of such encumbrance or restriction, (B) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any property
or assets of the Company or any Restricted Subsidiary not otherwise prohibited
by this Indenture, or (C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not, individually or in
the aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary; provided that, in each case, such encumbrance or
--------
restriction relates to, and restricts dealings with, only the property or asset
that is the subject of such encumbrance or restriction; and provided further,
-------- -------
that such encumbrance or restriction does not prohibit, limit or otherwise
restrict the making or payment of any dividend or other distribution to the
Company or any Restricted Subsidiary; (v) any restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition; and (vi)
any restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business.
SECTION 3.12 Limitation on Sale of Capital Stock of Restricted
-------------------------------------------------
Subsidiaries. The Company (i) shall not, and shall not permit any Restricted
- ------------
Subsidiary to, transfer, convey, sell or otherwise dispose of any Capital Stock
of any Restricted Subsidiary to any Person (other than to the Company or a
Restricted Subsidiary) and (ii) shall not permit any Restricted Subsidiary to
issue any of its Capital Stock to any Person other than to the
Company or a Restricted Subsidiary; provided, however, that this Section 3.12
-------- -------
shall not prohibit the transfer, conveyance, sale or other disposition of all of
the Capital Stock of a Restricted Subsidiary if the Net Cash Proceeds from such
transfer, conveyance, sale or other disposition are applied in accordance with
Section 3.10; and, provided, further, that this Section 3.12 shall not prohibit
-------- -------
the transfer, conveyance, sale or other disposition of less than all of the
Capital Stock of a Restricted Subsidiary or the issuance by any Restricted
Subsidiary of any of its Capital Stock to any Person as long as (A) the Net Cash
Proceeds from such transfer, conveyance, sale or
36
other disposition or issuance are applied in accordance with Section 3.10, (B)
immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing, (C) immediately after giving pro forma effect
to such transaction, as if such transaction had occurred at the beginning of the
applicable four-quarter period, the Company would be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Consolidated Coverage Ratio
test as set forth in Section 3.8(a) and (D) immediately after giving effect to
such transaction, such Restricted Subsidiary remains a Restricted Subsidiary of
the Company.
SECTION 3.13 Limitation on Liens. The Company shall not, and shall
-------------------
not permit any Restricted Subsidiary to, directly or indirectly, incur, assume
or suffer to exist any Lien of any kind upon any of its property or assets
(including any shares of Capital Stock or Indebtedness of any Restricted
Subsidiary), whether owned on the Issue Date or acquired after the Issue Date,
or any income or profits therefrom, except if the Securities (or the Guarantee
of the Securities, in the case of Liens on properties or assets of any
Guarantor) and all other amounts due under this Indenture are directly secured
equally and ratably with (or prior to in the case of Liens with respect to
Subordinated Indebtedness) the obligation or liability secured by such Lien,
excluding, however, from the operation of the foregoing any of the following:
(a) any Lien existing as of the Issue Date;
(b) any Lien arising by reason of (i) any judgment, decree or order
of any court, so long as such Lien is in existence less than 30 days after the
entry thereof or adequately bonded or the payment of such judgment, decree or
order is covered (subject to a customary deductible) by insurance maintained
with responsible insurance companies; (ii) taxes, assessments or other
governmental charges that are not yet delinquent or are being contested in good
faith; (iii) security for payment of workers' compensation or other insurance;
(iv) good faith deposits in connection with tenders, leases or contracts (other
than contracts for the payment of borrowed money); (v) zoning restrictions,
easements, licenses, reservations, provisions, covenants, conditions, waivers,
restrictions on the use of property or minor irregularities of title (and with
respect to leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and arising by,
through or under a landlord or owner of the leased property, with or without
consent of the lessee), none of which materially impairs the use of any property
or assets material to the operation of the business of the Company or any
Restricted Subsidiary or the value of such property or assets for the purpose of
such business; (vi) deposits to secure public or statutory obligations, or in
lieu of surety or appeal bonds with respect to matters not yet finally
determined and being contested in good faith by negotiations or by appropriate
proceedings that suspend the collection thereof; or (vii) operation of law in
favor of mechanics, materialmen, laborers, employees or suppliers, incurred in
the ordinary course of business for sums that are not yet delinquent or are
being contested in good faith by negotiations or by appropriate proceedings that
suspend the collection thereof;
(c) any Lien now or hereafter existing on property or assets of the
Company or any Guarantor securing Indebtedness of such Person incurred pursuant
to the Senior Credit Agreement;
37
(d) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or a Restricted Subsidiary; provided that any such
--------
Lien extends only to the assets that were subject to such Lien securing such
Acquired Indebtedness prior to the related acquisition;
(e) leases or subleases granted by the Company or any of its
Subsidiaries to any other Person in the ordinary course of business;
(f) Liens in the nature of trustees' Liens granted pursuant to any
indenture governing any indebtedness permitted by Section 3.8, in each case in
favor of the trustee under such indenture and securing only obligations to pay
any compensation to such trustee, to reimburse its expenses and to indemnify it
under the terms thereof;
(g) Liens to secure Indebtedness (including Capitalized Lease
Obligations) permitted by paragraph (b)(vii) of Section 3.8 covering only the
assets acquired with such Indebtedness; and
(h) any extension, renewal, refinancing or replacement, in whole or
in part, of any Lien described in the foregoing clauses (a) through (g) so long
as the amount of property or assets subject to such Lien is not increased
thereby.
SECTION 3.14 Limitations on Affiliate Transactions. (a) The Company
-------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless: (i) the terms of
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
an Affiliate; (ii) in the event such Affiliate Transaction involves an aggregate
amount in excess of $1,000,000 (unless such Affiliate Transaction constitutes an
agreement with Bayer AG or its Affiliate relating to an Investment by the
Company and an Investment by Bayer AG or its Affiliate in a Permitted Foreign
Company in which case the requirements of this clause shall be applicable only
if the amount being invested by the Company exceeds $10,000,000), the terms of
such transaction have been approved by a majority of the members of the Board of
Directors of the Company and by a majority of the disinterested members of such
Board, if any (and such majority or majorities, as the case may be, determines
that such Affiliate Transaction satisfies the criteria in (i) above) and (iii)
in the event such Affiliate Transaction involves an aggregate amount in
excess of $15,000,000 (unless such Affiliate Transaction constitutes an
agreement with Bayer AG or its Affiliate relating to an Investment by the
Company and an Investment by Bayer AG or its Affiliate in a Permitted Foreign
Company in which case the requirements of this clause shall be applicable only
if the amount being invested by the Company exceeds $25,000,000), the Company
has received a written opinion from an independent investment banking firm of
nationally recognized standing that such Affiliate Transaction is fair to the
Company or such Restricted Subsidiary, as the case may be, from a financial
point of view.
38
(b) The provisions of Section 3.14(a) will not prohibit (i) any
Restricted Payment permitted to be paid or made pursuant to Section 3.9, (ii)
the performance of the Company's or a Restricted Subsidiary's obligations under
any employment contract, stock option, collective bargaining agreement, employee
benefit plan, related trust agreement or any other similar arrangement
heretofore or hereafter entered into in the ordinary course of business, (iii)
payment of compensation to employees, officers, directors or consultants in the
ordinary course of business, (iv) maintenance in the ordinary course of business
of benefit programs or arrangements for employees, officers or directors,
including vacation plans, health and life insurance plans, deferred compensation
plans, and retirement or savings plans and similar plans, (v) any transaction
between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries, (vi) any agreement in effect as of the Issue Date or any amendment
thereto or any transaction contemplated thereby, (vii) transactions required of
the Company or any Restricted Subsidiary under, or contemplated by, the General
Shareholders Agreement dated September 30, 1994, and the Continuing Shareholders
Agreement dated September 30, 1994, in each case as in effect on the date of
this Indenture or (viii) any agreement entered into in the ordinary course of
business between the Company and a Person who constitutes an Affiliate solely by
reason of such Person being an officer or director of the Company which
agreement provides for the repurchase by the Company, upon or following the
termination of such Person's employment or directorship with the Company, of
shares of Capital Stock of the Company owned by such Person.
SECTION 3.15 Change of Control. (a) If a Change of Control shall
-----------------
occur at any time, then each holder of Securities shall have the right to
require that the Company purchase such holder's Securities in whole or in part
in any integral multiple of $1,000, for a cash purchase price (the "Change of
Control Purchase Price") equal to 101% of the principal amount of such
Securities, plus accrued and unpaid interest, if any, on such Securities to the
date of purchase (the "Change of Control Purchase Date"), pursuant to an offer
(the "Change of Control Offer"), made in conformity with the procedures set
forth in Sections 3.15(b), (c) and (d).
(b) Within 15 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice of such Change of Control to
each holder of Securities by first-class mail, postage prepaid, at his address
appearing in the security register, stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Securities,
in whole or in part, at the Change of Control Purchase Price;
(ii) the Change of Control Purchase Price and the Change of
Control Purchase Date, which shall be a Business Day no earlier than 30
days nor later than 60 days from the date such notice is mailed, or such
later date as is necessary to comply with requirements under the Exchange
Act;
(iii) that any Security not tendered for purchase will
continue to accrue interest;
39
(iv) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date; and
(v) the procedures that a Holder must follow to accept a
Change of Control Offer or to withdraw such acceptance.
(c) Holders electing to have Securities purchased will be required to
surrender such Securities, together with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security duly executed, to the Company at
the address specified in the notice at least 10 Business Days prior to the
Change of Control Purchase Date. Holders will be entitled to withdraw their
election if the Company receives, not later than three Business Days prior to
the Change of Control Purchase Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Securities delivered
for purchase by the Holder as to which his election is to be withdrawn and a
statement that such Holder is withdrawing his election to have such Securities
purchased. Holders whose Securities are purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(d) The Company will comply with any applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with
provisions of this Section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
(e) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions in effect on the Issue Date with respect to Indebtedness
outstanding on the Issue Date and refinancings thereof and customary default
provisions) that would materially impair the ability of the Company to make a
Change of Control Offer to purchase the Securities or, if such Change of Control
Offer is made, to pay for the Securities tendered for purchase.
SECTION 3.16 Limitation on Lines of Business. The Company shall not,
-------------------------------
and shall not permit its Restricted Subsidiaries to, engage in any business
other than those engaged in on the date of this Indenture and any other segment
of the pharmaceutical or health care industry or ancillary thereto.
SECTION 3.17 Limitation on Sale and Leaseback Transactions. The
---------------------------------------------
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company may
enter into a sale and leaseback transaction if (i) the Company could have (x)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to the Consolidated Coverage Ratio
test set forth in paragraph (a) of Section 3.8 and (y) incurred a Lien to secure
such Indebtedness pursuant to Section 3.13, (ii) the gross cash proceeds of such
sale and
40
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and the Company applies the net
proceeds of such transaction in compliance with, Section 3.10.
SECTION 3.18 Payments for Consent. Neither the Company nor any
--------------------
Subsidiary shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
the Securities for or as an inducement to any consent, waiver or amendment of
any terms or provisions of the Securities unless such consideration is offered
to be paid or agreed to be paid to all Holders of the Securities who so consent,
waive or agree in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
SECTION 3.19 Waiver of Stay, Extension or Usury Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim, and will resist any
and all efforts to be compelled to take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of or interest on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE IV
DEFAULTS AND REMEDIES
---------------------
SECTION 4.1 Event of Default Defined; Acceleration of Maturity. An
--------------------------------------------------
"Event of Default" occurs if:
(a) the Company defaults in any payment of interest on any Security
when the same becomes due and payable and such default continues for a period of
30 days;
(b) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or otherwise;
(c) the Company fails to comply with Section 8.1;
(d) the Company fails to comply with Section 3.7, 3.8, 3.9, 3.10,
3.11, 3.12, 3.13, 3.14, 3.15, 3.16 or 3.17 (in each case other than a failure to
repurchase Securities when
41
required pursuant to Section 3.10 or 3.15, which failure shall constitute an
Event of Default under Section 4.1(b)) and such failure continues for 30 days
after the notice specified below;
(e) the Company fails to comply with any covenant, condition or
agreement in this Indenture or the Securities (other than those referred to in
clauses (a), (b), (c) and (d) above) and such failure continues for 30 days
after the notice specified below;
(f) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such unpaid
or accelerated Indebtedness exceeds $10,000,000 or its foreign currency
equivalent at the time;
(g) the Company or a Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(iv) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Material
Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of the Company or
any Material Subsidiary;
or any similar relief is granted under any foreign laws and the order, decree or
relief remains unstayed and in effect for 60 days;
(i) any judgment or decree for the payment of money in excess of
$10,000,000 or its foreign currency equivalent at the time (to the extent not
covered by insurance) is entered against the Company or any Material Subsidiary
and is not discharged and either (A) an enforcement proceeding has been
commenced by any creditor upon such judgment or
42
decree and is not promptly stayed or (B) there is a period of 60 days following
the entry of such judgment or decree during which such judgment or decree is not
discharged or the execution thereof stayed; or
(j) the failure of any Subsidiary Guarantee to be in full force and
effect (except as contemplated by the terms thereof) or the denial or
disaffirmation by any Subsidiary Guarantor of its obligations hereunder or any
Subsidiary Guarantee if such failure is not cured, or such denial or
disaffirmation is not rescinded or revoked, within 10 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under Section 4.1(d) or
Section 4.1(e) will not constitute an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities notify
the Company in writing of the Default and the Company does not cure such Default
within the time specified in said Section 4.1(d) or (e) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied, and
state that such notice is a "Notice of Default."
The Company shall deliver to the Trustee: (i) within 5 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (f) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (d),
(e) or (i), its status and what action the Company is taking or proposes to take
with respect thereto and (ii) within 120 days after the end of each fiscal year,
written notice in the form of an Officers' Certificate indicating whether the
Officers signing such Officers' Certificate had actual knowledge of any Default
that occurred during such previous fiscal year.
SECTION 4.2 Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 4.1(g) or (h) with respect to the Company)
occurs and is continuing, the Trustee, by written notice to the Company, or the
Holders of at least 25% in outstanding principal amount of the Securities, by
written notice to the Company and the Trustee, may declare the principal of, and
accrued and unpaid interest on, all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable (i) if
no Indebtedness is outstanding under the Senior Credit Agreement, immediately,
and (ii) if any Indebtedness is outstanding under the Senior Credit Agreement,
upon the first to occur of (x) the acceleration of any such Indebtedness or (y)
the fifth Business Day after receipt by the Company and the Credit Agent of such
written notice of acceleration. If an Event of Default specified in Section
4.1(g) or (h) with respect to the Company occurs and is continuing, the
principal of, and accrued and unpaid interest on, all the Securities shall ipso
----
43
facto become and be immediately due and payable without any declaration or other
- -----
act on the part of the Trustee or any Holders. The Holders of a majority in
principal amount of the Securities, by notice to the Trustee, may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent Default
or Event of Default or impair any right consequent thereto.
SECTION 4.3 Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy shall be deemed
exclusive of any other remedy and all available remedies shall be cumulative.
SECTION 4.4 Waiver of Past Defaults. The Holders of a majority in
-----------------------
outstanding principal amount of the Securities, by notice to the Trustee, may
waive an existing Default or Event of Default and its consequences except (i) a
Default or Event of Default in the payment of the principal of or interest on a
Security or (ii) a Default or Event of Default in respect of a provision that
under Section 7.2 cannot be amended without the consent of each Holder affected.
When a Default or Event of Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.
SECTION 4.5 Control by Majority. The Holders of a majority in
-------------------
outstanding principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 5.1, that the Trustee determines is unduly prejudicial to the
rights of other Holders (it being understood that, subject to Section 5.1, the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders) or would subject the
Trustee to personal liability; provided, however, that the Trustee may take any
-------- -------
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking or refraining from taking any such action hereunder,
the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by its taking or refraining
from taking such action.
SECTION 4.6 Limitation on Suits. Except to enforce the right of any
-------------------
Holder to receive payment of the principal of and interest on the Securities
held by such Holder on or
44
after the respective due dates expressed in the Securities, no Holder may pursue
any remedy with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) the Holders of at least 25% in outstanding principal amount of
the Securities make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during such
60-day period.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 4.7 Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of the principal of and interest on the Securities held by such Holder
on or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 4.8 Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 4.1(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
5.6.
SECTION 4.9 Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, its Subsidiaries or their
respective creditors or properties and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compen sation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 5.6.
45
SECTION 4.10 Priorities. If the Trustee collects any money or
----------
property pursuant to this Article IV, it shall pay out the money or property in
the following order:
FIRST: Costs and expenses of collection, including all sums paid or
advanced by the Trustee hereunder and the reasonable compensation, expenses
and disbursements of the Trustee, its agents, and counsel and all other
amounts due to the Trustee under Section 5.6;
SECOND: To Holders for amounts due and unpaid on the Securities for
principal and interest, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal
and interest, respectively; and
THIRD: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 4.10. At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that states
the record date, the payment date and the amount to be paid.
SECTION 4.11 Undertaking for Costs. In any suit for the enforcement
---------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 4.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 4.7 or a suit by Holders of more
than 10% in outstanding principal amount of the Securities.
ARTICLE V
CONCERNING THE TRUSTEE
----------------------
SECTION 5.1 Duties and Responsibilities of the Trustee; During
--------------------------------------------------
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
- -------------------------
Default and after the curing or waiving of all Events of Default that may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred that has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs. The Trustee shall not be
charged with knowledge of the existence of an Event of Default, other than with
respect to a payment default, unless and until the Trustee has actual knowledge
of such Event of Default or the Trustee shall have received notice thereof in
writing from the Company or from the holders of a majority in principal amount
of the Securities.
46
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions that are specifically required by any provision
hereof to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a responsible officer or responsible officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the Securities at
the time outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
This Section 5.1 is in furtherance of and subject to Sections 315 and
316 of the Trust Indenture Act.
SECTION 5.2 Certain Rights of the Trustee. In furtherance of and
-----------------------------
subject to the Trust Indenture Act, and subject to Section 5.1:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note,
47
coupon, security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance on such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers under this Indenture at the request, order or direction of any
of the Securityholders pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee indemnification satisfactory
to it in its sole discretion against all losses and expenses;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing to do so by the
holders of not less than a majority in aggregate principal amount of the
Securities then outstanding; provided that, if the payment within a reasonable
--------
time to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Company or, if paid by the Trustee
or any predecessor trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Securities or Application of Proceeds Thereof. The recitals contained herein
- ---------------------------------------------
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the
48
Company, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representation as to the validity or sufficiency of
this Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Company of any of the Securities or of the
proceeds thereof.
SECTION 5.4 Trustee and Agents May Hold Securities; Collections, etc.
--------------------------------------------------------
The Trustee or any agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee or such
agent.
SECTION 5.5 Moneys Held by Trustee. Subject to the provisions of
----------------------
Section 9.6, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Company
or the Trustee shall be under any liability for interest on any moneys received
by it hereunder.
SECTION 5.6 Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim. The Company covenants and agrees to pay to the Trustee from time to
- -----
time, and the Trustee shall be entitled to, such compensation as agreed to by
the Company and the Trustee (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust), and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of enforcing this Indenture against the Company (including this
Section 5.6) and of defending itself against or investigating any claim (whether
asserted by a Holder or the Company) of liability in the premises. The
obligations of the Company under this Section to compensate and indemnify the
Trustee and each predecessor trustee and to pay or reimburse the Trustee and
each predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a lien
prior to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the holders
of particular Securities, and the Securities are hereby subordinated to such
senior claim.
SECTION 5.7 Right of Trustee to Rely on Officer's Certificate, Etc.
------------------------------------------------------
Subject to Sections 5.1 and 5.2, whenever in the administration of the trusts of
this Indenture the
49
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
SECTION 5.8 Persons Eligible for Appointment as Trustee. The Trustee
-------------------------------------------
hereunder shall at all times be a corporation having a combined capital and
surplus of at least $50,000,000, and which is eligible in accordance with the
provisions of Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of a Federal, State or District of Columbia supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
SECTION 5.9 Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee. (a) The Trustee may at any time resign by giving written notice of
resignation to the Company and by mailing notice thereof by first-class mail to
holders of Securities at their last addresses as they shall appear on the
Security register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper, prescribe and appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act, after written request therefor
by the Company or by any Securityholder who has been a bona fide holder of
a Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 5.8 and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall
50
be appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act, the Trustee or any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months may on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
appoint a successor trustee by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Company the evidence provided for in
Section 6.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee and any appointment of
a successor trustee pursuant to any of the provisions of this Section 5.9 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 5.10.
SECTION 5.10 Acceptance of Appointment by Successor Trustee. Any
----------------------------------------------
successor trustee appointed as provided in Section 5.9 shall execute and deliver
to the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 9.6, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 5.6.
Upon acceptance of appointment by a successor trustee as provided in
this Section 5.10, the Company shall mail notice thereof by first-class mail to
the holders of Securities at their last addresses as they shall appear in the
Security register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 5.9.
If the Company fails to mail such notice within 10 days after acceptance of
appointment by the
51
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee. Any corporation into which the Trustee may be merged or
- -------------------
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
--------
corporation shall be eligible under the provisions of Section 5.8, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture; provided
--------
that the certificate of the Trustee shall have provided that the right to adopt
the certificate of authentication of any predecessor trustee or to authenticate
Securities in the name of any predecessor trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 5.12 Notice of Defaults. If a Default or Event of Default
------------------
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Holder notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, or interest on, any Security (including
payments pursuant to the optional redemption or required repurchase provisions
of such Security, if any), the Trustee may withhold the notice if and so long as
its board of directors, the Executive Committee of its board of directors or a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 5.13 Reports by the Trustee. The Trustee shall by October 1
----------------------
of each year transmit to the Holders all reports required under Section 313(a)
of the Trust Indenture Act.
ARTICLE VI
CONCERNING THE SECURITYHOLDERS
------------------------------
SECTION 6.1 Evidence of Action Taken by Securityholders. Any
-------------------------------------------
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one
52
or more instruments of substantially similar tenor signed by such
Securityholders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 5.1 and 5.2)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of Holding of
---------------------------------------------------
Securities; Record Date. Subject to Sections 5.1 and 5.2, the execution of any
- -----------------------
instrument by a Securityholder or his agent or proxy may be proved in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The holding of
Securities shall be proved by the Security register or by a certificate of the
registrar thereof. The Company may set a record date for purposes of
determining the identity of holders of Securities entitled to vote or consent to
any action referred to in Section 6.1, which record date may be set at any time
or from time to time by notice to the Trustee, for any date or dates (in the
case of any adjournment or resolicitation) not more than 60 days nor less than
five days prior to the proposed date of such vote or consent, and thereafter,
notwithstanding any other provisions hereof, only holders of Securities of
record on such record date shall be entitled to so vote or give such consent or
to withdraw such vote or consent.
SECTION 6.3 Holders to be Treated as Owners. The Company, the
-------------------------------
Trustee and any agents of the Company or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security register
as the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice to the contrary;
provided, however, that the Depository, or its nominee, shall be deemed the
- -------- -------
owner of the Restricted Global Security, and owners of beneficial interests in
the Restricted Global Security will not be considered the owners of any
Securities. All such payments so made to any such person, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Security.
SECTION 6.4 Securities Owned by Company Deemed Not Outstanding. In
--------------------------------------------------
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Company or any other obligor on the
Securities or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any other obligor
on the Securities shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, consent
or waiver only Securities which the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with
53
respect to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities. In case of a dispute as to such right, the
advice of counsel shall be full protection in respect of any decision made by
the Trustee in accordance with such advice. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Securities, if any, known by the Company to be owned or held
by or for the account of any of the above-described persons; and, subject to
Sections 5.1 and 5.2, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are outstanding for the purpose of
any such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time prior
-----------------------------------
to (but not after) the evidencing to the Trustee, as provided in Section 6.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action, any holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as aforesaid, any
such action taken by the holder of any Security shall be conclusive and binding
upon such holder and upon all future holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the holders of the percentage in aggregate principal amount
of the Securities specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the holders of
all the Securities.
ARTICLE VII
AMENDMENTS
----------
SECTION 7.1 Without Consent of Holders. The Company and the Trustee
--------------------------
may amend this Indenture or the Securities without notice to or consent of any
Holder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article VIII;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the uncertificated
-------- -------
Securities are issued in registered form for purposes of Section 163(f) of the
Code or in a manner such that the uncertificated Securities are described in
Section 163(f)(2)(B) of the Code;
(d) to add Guarantees with respect to the Securities or to secure the
Securities;
54
(e) to add to the covenants of the Company for the benefit of the
Holders of the Securities or to surrender any right or power herein conferred
upon the Company;
(f) to comply with any requirements of the Commission in connection
with qualifying this Indenture under the Trust Indenture Act;
(g) to make any change that does not adversely affect the rights of
any Holder; or
(h) to provide for the issuance of the Exchange Notes, which will
have terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will be
modified or eliminated, as appropriate), and which will be treated, together
with any outstanding Initial Notes, as a single issue of securities.
After an amendment under this Section 7.1 becomes effective, the
Company shall mail to each Holder a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 7.1.
SECTION 7.2 With Consent of Holders. The Company and the Trustee may
-----------------------
amend this Indenture or the Securities without notice to any Holder but with the
written consent of the Holders of at least a majority in principal amount of the
Securities. However, without the consent of each Holder of an outstanding
Security affected, no amendment may:
(a) reduce the amount of Securities whose Holders must consent to an
amendment;
(b) reduce the rate of or extend the time for payment of interest on
any Security;
(c) reduce the principal of or extend the Stated Maturity of any
Security;
(d) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be redeemed
or repurchased in accordance with this Indenture;
(e) make any Security payable in money other than that stated in the
Security;
(f) modify or affect in any manner adverse to the Holders, the terms
and conditions of the obligation of the Company for the due and punctual payment
of the principal of or interest on Securities; or
(g) make any change in Section 4.4 or 4.7 or the second sentence of
this Section 7.2.
55
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section 7.2 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 7.2.
SECTION 7.3 Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Securities shall comply with the Trust Indenture Act as
then in effect.
SECTION 7.4 Revocation and Effect of Consents and Waivers. A consent
---------------------------------------------
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of Security if the Trustee receives the notice of revocation before
the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 7.5 Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 7.6 Trustee to Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article VII if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
56
ARTICLE VIII
MERGER AND CONSOLIDATION
------------------------
SECTION 8.1 When Company May Merge, Etc. The Company shall not
----------------------------
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless: (i) the resulting,
surviving or transferee Person (the "Successor Company") shall be a Person
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia and the Successor Company (if not the
Company) shall expressly assume, by an indenture supplemental to this Indenture,
executed and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and this
Indenture; (ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor Company
or any Restricted Subsidiary as a result of such transaction as having been
incurred by such Successor Company or such Restricted Subsidiary at the time of
such transaction), no Event of Default shall have occurred and be continuing;
(iii) immediately after giving pro forma effect to such transaction, as if such
transaction had occurred at the beginning of the applicable four-quarter period,
the Successor Company would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Coverage Ratio test set forth in
Section 3.8(a); and (iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
SECTION 8.2 Successor Corporation Substituted. The Successor Company
---------------------------------
shall be the successor of the Company and shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the predecessor Company in the case of a conveyance, transfer or
lease shall not be released from the obligation to pay the principal of and
interest on the Securities.
Such Successor Company may cause to be signed, and may issue either in
its own name or in the name of the Company prior to such succession any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Securities so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Securities had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
57
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any Successor Company which shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 9.1 Discharge of Liability on Securities: Defeasance. (a)
------------------------------------------------
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.6) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article XII and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities (other than Securities
replaced pursuant to Section 2.6), including interest thereon to maturity or
such redemption date, and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Section
9.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
(accompanied by an Officers' Certificate and an Opinion of Counsel stating that
all conditions precedent specified herein relating to the satisfaction and
discharge of this Indenture have been complied with) and at the cost and expense
of the Company.
(b) Subject to Sections 9.1(c) and 9.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture and
all obligations of the Subsidiary Guarantors under the Subsidiary Guarantee and
this Indenture ("legal defeasance option") or (ii) its obligations under
Sections 3.5, 3.7 through 3.19, 8.1(iii) and 8.1(iv) and the operation of
Sections 4.1(d), 4.1(e), 4.1(f) and 4.1(i) ("covenant defeasance option");
provided, however, no deposit under this Article IX shall be effective to
- -------- -------
terminate the obligations of the Company under the Securities or this Indenture
prior to 123 days following any such deposit. The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 4.1(d),
(e), (f), (i) or (j) or because of the failure of the Company to comply with
Section 8.1(iii) and Section 8.1(iv).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 9.1(a) and (b), the
Company's obligations in Article II, Sections 5.6, 5.9, 9.4, 9.5 and 9.6 shall
survive until the Securities
58
have been paid in full. Thereafter, the Company's obligations in Sections 5.6,
9.4 and 9.5 shall survive.
SECTION 9.2 Conditions to Defeasance. The Company may exercise its
------------------------
legal defeasance option or its covenant defeasance option only if:
(a) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest on
the Securities to maturity or redemption, as the case may be;
(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their opinion
that the payments of principal and interest when due and without reinvestment of
the deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Securities to
maturity or redemption, as the case may be;
(c) no Event of Default shall have occurred or be continuing on the
date of such deposit and 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 4.1(g) or 4.1(h) with respect to
the Company occurs which is continuing at the end of such period;
(d) the deposit does not constitute a default under any other
agreement binding on the Company;
(e) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940;
(f) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (B) since the date hereof there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders 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 purposes on the same
amounts, in the same manner and at the same times as would have been the case if
such legal defeasance had not occurred;
(g) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders 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;
59
(h) The Holders shall have a perfected security interest under
applicable law in the cash or U.S. Government Obligations deposited pursuant to
Section 9.2(a);
(i) The Company shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to the
effect that, after the passage of 123 days following the deposit, the trust
funds will not be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally;
(j) such defeasance shall not cause the Trustee to have a conflicting
interest with respect to any securities of the Company; and
(k) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as contemplated by
this Article IX have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article III.
SECTION 9.3 Application of Trust Money. The Trustee shall hold in
--------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article IX. It shall apply the deposited money and the money from U.S.
Government Obligations through the paying agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 9.4 Repayment to Company. The Trustee and the paying agent
--------------------
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee and the
paying agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Holders entitled to the money must look to the
Company for payment as general creditors.
SECTION 9.5 Indemnity for U.S. Government Obligations. The Company
-----------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 9.6 Reinstatement. If the Trustee or paying agent is unable
-------------
to apply any money or U.S. Government Obligations in accordance with this
Article IX by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company and the
Subsidiary Guarantors under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article IX
until such time as the Trustee or paying agent is permitted to apply all such
money
60
or U.S. Government Obligations in accordance with this Article IX;
provided, however, that, if the Company has made any payment of interest on or
- -------- -------
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or paying agent.
ARTICLE X
SUBSIDIARY GUARANTEE
--------------------
SECTION 10.1 Subsidiary Guarantee. Each Guarantor hereby
--------------------
unconditionally guarantees (each a "Subsidiary Guarantee") on a senior unsecured
basis to each Holder and to the Trustee and its successors and assigns the
performance and punctual payment when due, whether at maturity, by acceleration
or otherwise, of all obligations of the Company under this Indenture and the
Securities. The Guarantor further agrees that the obligations of the Company
may be extended or renewed, in whole or in part, without notice or further
assent from such Guarantor, and that such Guarantor will remain bound under this
Article X notwithstanding any extension or renewal of any such obligation.
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Company's obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Securities or the Company's obligations. The obligations of any
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the obligations of
the Company or any of them; (e) the failure of any Holder or Trustee to exercise
any right or remedy against any other guarantor of the obligations of the
Company; or (f) any change in the ownership of such Guarantor.
Each Guarantor further agrees that its Subsidiary Guarantee
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
obligations of the Company.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of set-off, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or
any other agreement,
61
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Subsidiary Guarantee shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right that any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any of the Securities when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other monetary obligation of the Company under this Indenture
or the Securities, each Guarantor hereby promises to and will, upon receipt of
written demand by the Trustee, pay, or cause to be paid, in cash, to the Holders
or the Trustee an amount equal to the sum of (i) the unpaid principal amount of
such obligations, (ii) accrued and unpaid interest on such obligations (but only
to the extent not prohibited by law) and (iii) all other monetary obligations of
the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all such obligations. Each Guarantor further
agrees that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article IV for the purposes of such Guarantor's
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as
provided in Article IV, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this
Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable counsels' fees and expenses) incurred by the Trustee or
any Holder of a Security in enforcing any rights under this section with respect
to such Guarantor.
To further evidence its Subsidiary Guarantee to the Holders, each
Guarantor hereby agrees to execute its Subsidiary Guarantee in substantially the
form set forth in Exhibit A and B hereto to be endorsed on each Security ordered
to be authenticated and delivered by the Trustee. Each Guarantor hereby agrees
that its Subsidiary Guarantee set forth in this Section 10.1 shall remain in
full force and effect notwithstanding any failure to endorse on each Security a
notation of its Subsidiary Guarantee. The Subsidiary Guarantee shall be signed
on behalf of each Guarantor by its Chairman of the Board, any Vice Chairman of
the Board, its Chief Executive Officer, its President, any executive vice
president, any senior vice president, its Controller, Treasurer, or any
Assistant Treasurer or its Secretary or any Assistant
62
Secretary or any authorized signatory prior to the authentication of the
Security on which it is endorsed, and the delivery of such Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee on behalf of such Guarantor. Such signature
upon a Subsidiary Guarantee may be the manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee, and in case such officer who shall have signed the Subsidiary
Guarantee shall cease to be such officer before the Security on which the
Subsidiary Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Subsidiary Guarantee had not ceased to be such officer of such Guarantor.
SECTION 10.2 Limitation on Liability. Any term or provision of this
-----------------------
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that can, after giving effect to all other contingent and fixed
liabilities of such Guarantor be hereby guaranteed without rendering this
Indenture, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 10.3 Successors and Assigns. This Article X shall be binding
----------------------
upon each Guarantor and its respective successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.4 No Waiver. Neither a failure nor a delay on the part of
---------
either the Trustee or the Holders in exercising any right, power or privilege
under this Article X shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article X at law,
in equity, by statute or otherwise.
SECTION 10.5 Modification. No modification, amendment or waiver of
------------
any provision of this Article X, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstance.
SECTION 10.6 Release. If at any time shares of the Capital Stock of
-------
any Guarantor shall be sold in a transaction the Net Cash Proceeds of which are
applied in accordance with the provisions of Section 3.12 which results in such
Guarantor no longer
63
constituting a Subsidiary, the Trustee is hereby authorized and directed to
execute and deliver a release of such Guarantor from its obligations and
liabilities under this Article X upon receipt by the Trustee of reasonable
evidence of compliance with the requirements of this Section 10.6.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
------------------------------------------------------
Company Exempt from Individual Liability. No recourse under or upon any
- ----------------------------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the holders thereof
and as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
-------------------------------------------------------
and Securityholders. Nothing in this Indenture or in the Securities, expressed
- -------------------
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and their successors and the holders
of the Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the holders of the Securities.
SECTION 11.3 Successors and Assigns of Company Bound by Indenture.
----------------------------------------------------
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Company, Trustee and
-------------------------------------------
Securityholders. Any notice or demand which by any provision of this Indenture
- ---------------
is required or permitted to be given or served by the Trustee or by the holders
of Securities to or on the Company may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Company is filed by the Company
with the Trustee) to Schein Pharmaceutical, Inc., 100 Campus Drive, Florham
Park, NJ 07932, Chief Financial Officer with a copy to the General Counsel. Any
notice, direction, request or demand by the Company or any Securityholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed,
64
first-class postage prepaid, to each Holder entitled thereto, at his last
address as it appears in the Security register. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
-----------------------------------------------
Statements to Be Contained Therein. Upon any application or demand by the
- ----------------------------------
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters and information in the possession of the Company, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company, unless such counsel knows that the certificate,
statement or opinion or representations with respect to
65
the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 11.6 Payments Due on Saturdays; Sundays and Holidays. If the
-----------------------------------------------
date due for payment of interest on or principal of the Securities or the date
fixed for redemption of any Security shall not be a Business Day, then payment
of interest or principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest shall accrue
for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
-------------------------------------------------
Indenture Act. If and to the extent that any provision of this Indenture
- -------------
limits, qualifies or conflicts with another provision included in this Indenture
by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act (an
"incorporated provisions), such incorporated provision shall control.
SECTION 11.8 APPLICABLE LAW. THIS INDENTURE AND EACH SECURITY SHALL
--------------
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.9 Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
66
ARTICLE XII
REDEMPTION OF SECURITIES
------------------------
SECTION 12.1 Right of Optional Redemption; Prices. At any time, the
------------------------------------
Company may redeem, in whole or in part, the Securities on not less than 30 nor
more than 60 days' prior notice at a redemption price equal to 103.00% of the
aggregate principal amount thereof if redeemed prior to January 15, 1999,
101.50% of the aggregate principal amount thereof if redeemed on or after
January 15, 1999 and prior to January 15, 2000, 100.75% of the aggregate
principal amount thereof if redeemed on or after January 15, 2000 and prior to
January 15, 2001 and 100% of the aggregate principal amount thereof if redeemed
on or after January 15, 2001, plus, in each case, accrued interest thereon to,
but excluding, the date of redemption.
SECTION 12.2 Applicability of Article. Redemption of Securities at
------------------------
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION 12.3 Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities pursuant to Section 12.1 shall be evidenced
by a resolution of the Board of Directors. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
redemption date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such redemption date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 12.4(e).
SECTION 12.4 Notice of Redemption; Partial Redemptions. (a) Notice
-----------------------------------------
of redemption to the holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such holders of Securities at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
(b) The notice of redemption to each such holder shall identify the
Security, including CUSIP numbers, and shall specify the principal amount of
each Security held by such holder to be redeemed, the date fixed for redemption,
the redemption price, the place or places of payment, that payment will be made
upon presentation and surrender of such Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice and that on
and after said date interest thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security is to be redeemed in part only the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new
67
Security or Securities in principal amount equal to the unredeemed portion
thereof will be issued.
(c) The notice of redemption of Securities to be redeemed at the
option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
(d) At least one business day prior to the redemption date specified
in the notice of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.4) an amount of money sufficient to redeem on the
redemption date all the Securities so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If less than all the outstanding Securities are to be redeemed the
Company will deliver to the Trustee at least 60 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed.
(e) The Trustee shall select the Securities or portions thereof,
either pro rata, by lot or by such method as the Trustee shall deem fair and
reasonable, securities to be redeemed in whole or in part. Securities may be
redeemed in part in multiples of $1,000 or an integral multiple thereof. The
Trustee shall, upon the request of the Company, promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.5 Payment of Securities Called for Redemption. (a) If
-------------------------------------------
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Company shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue and, except as provided in Sections 5.5 and 9.6, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided that any quarterly payment of interest becoming due on the date fixed
- --------
for redemption shall be payable to the holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of Section
2.4.
68
(b) If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Security.
(c) Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to or on
the order of the holder thereof, at the expense of the Company, a new Security
or Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.6 Exclusion of Certain Securities from Eligibility for
----------------------------------------------------
Selection for Redemption. Securities not held through DTC shall be excluded
- ------------------------
from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Company and delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Company or (b) an entity specifically identified in such written statement
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.
69
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date and year first above mentioned.
SCHEIN PHARMACEUTICAL, INC.
By:
-------------------------------------------
Name: Dariush Ashrafi
Title: Executive Vice President and
Chief Financial Officer
SCHEIN PHARMACEUTICAL INTERNATIONAL, INC., as
Guarantor
By:
-------------------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL PA, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL SERVICE
COMPANY, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
STERIS LABORATORIES, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
70
MARSAM PHARMACEUTICALS INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
DANBURY PHARMACAL, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
DANBURY PHARMACAL PUERTO RICO, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------------------
Name:
Title:
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INSTITUTION") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION AND (2) AGREES THAT IT
WILL NOT, WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY,
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO SCHEIN PHARMACEUTICAL,
INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) TO AN ACCREDITED INSTITUTION THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE HEREOF, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INSTITUTION, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
CUSIP NO.
No. $
SCHEIN PHARMACEUTICAL, INC.
Senior Floating Rate Notes due 2004
Schein Pharmaceutical, Inc., a Delaware corporation (the "Company"),
for value received hereby promises to pay to _____________ or its registered
assigns the principal sum of _________________ Dollars on December 15, 2004, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest at a rate per annum equal to the Applicable LIBOR Rate (as defined
herein).
The Company shall pay interest quarterly on January 15, April 15, July
15, and October 15, of each year, commencing with January 15, 1998. Interest on
the Securities will accrue from the most recent interest payment date to which
interest on the Securities has been paid or duly provided for, or if no interest
has been paid or duly provided for on the Securities, from December 24, 1997,
until payment of said principal sum has been made or duly provided for. The
interest so payable on any January 15, April 15, July 15, and October 15, will,
except as otherwise provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Security is registered at the close of
business on the December 31, March 31, June 30, and September 30, preceding such
January 15, April 15, July 15, or October 15, whether or not such day is a
business day; provided that interest may be paid, at the option of the Company,
--------
by mailing a check therefor payable to the registered holder entitled thereto at
his last address as it appears on the Security register.
A-2
Interest on this Security will accrue at a rate equal to the
Applicable LIBOR Rate (as defined herein) and will be calculated on a formula
basis by multiplying the principal amount of the Securities then outstanding by
the Applicable LIBOR Rate, and multiplying such product by the LIBOR Fraction
(as defined herein).
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
This Security shall be deemed to be contract under the laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of the State of New York, without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
SCHEIN PHARMACEUTICAL, INC.
By:
-------------------------------------------
Name:
Title:
A-3
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------------------
Authorized Signatory
A-4
[FORM OF REVERSE OF INITIAL NOTE]
SCHEIN PHARMACEUTICAL, INC.
Senior Floating Rate Notes due 2004
This Security is one of a duly authorized issue of debt securities of
the Company, limited to the aggregate principal amount of $___________ (except
as otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an Indenture dated as of December 24, 1997 (the "Indenture"), duly
executed and delivered by the Company and the Guarantors to the Trustee (herein
called the "Trustee"). The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as in effect on the date of the Indenture (the "Trust
Indenture Act"). Capitalized terms used herein and not defined have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms and Securityholders are referred to the Indenture and the Trust
Indenture Act for a statement of those terms. The terms of the Indenture shall
govern any inconsistencies between the Indenture and the Securities.
This Security is one of the Initial Notes referred to in the
Indenture. The Securities include the Initial Notes and the Exchange Notes
issued in exchange for the Initial Notes pursuant to the Indenture and the
Registration Rights Agreement. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture.
Each Guarantor has jointly and severally guaranteed, pursuant to
Article X of the Indenture, the due and punctual payment of the principal of,
premium (if any) and interest on the Securities and all other amounts payable by
the Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture.
The Securities will bear interest at the Applicable LIBOR Rate.
"Applicable LIBOR Rate" means, for each quarterly period during which any
Security is outstanding subsequent to the initial quarterly period, 300 basis
points over the rate determined by the Company (notice of such rate to be sent
to the Trustee by the Company on the date of determination thereof) equal to the
average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the
offered rates for deposits in U.S. dollars for a period of three months, as set
forth on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the
Interest Rate Determination Date for such quarterly period; provided, however,
that if only one such offered rate appears on the Reuters Screen LIBO Page, the
Applicable LIBOR Rate for such quarterly period will mean such offered rate. If
such rate is not available at 11:00 a.m., London time, on the Interest Rate
Determination Date for such quarterly period, then the Applicable LIBOR Rate for
such quarterly period will mean the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the interest rates per annum at which
deposits in amounts equal to US$1 million are offered by the Reference Banks to
leading banks in the London interbank market for a period of three months as of
11:00 a.m., London time, on the Interest Rate Determination Date for such
quarterly period. If on any Interest Rate Determination Date, at least two of
the Reference Banks provide such offered quotations, then the Applicable LIBOR
Rate for such quarterly period will be determined in accordance with the
preceding sentence
A-5
on the basis of the offered quotation of those Reference Banks providing such
quotations; provided, however, that if fewer than two of the Reference Banks are
so quoting such interest rates as mentioned above, the Applicable LIBOR Rate for
such quarterly period shall be deemed to be the applicable LIBOR Rate for the
next preceding quarterly period and in the case of the quarterly period next
succeeding the initial quarterly period, the Applicable LIBOR Rate shall be
8.9375%. Notwithstanding the foregoing, the Applicable LIBOR Rate for the
initial quarterly period shall be 8.9375%. "Interest Rate Determination Date"
means, with respect to each quarterly period, the second London Banking Day
prior to the first day of such quarterly period. "London Banking Day" means any
day in which dealings in United States dollars are transacted or, with respect
to any future date, are expected to be transacted in the London interbank
market. "LIBOR Fraction" means the actual number of days in the quarterly period
divided by 360; provided, however, that the number of days in each quarterly
period shall be calculated by including the first day of such quarterly period
and excluding the last. "Quarterly period" means the period from and including a
scheduled payment date (or December 24, 1997, in the case of the initial
quarterly period) through the day next preceding the following scheduled
interest payment date. "Reference Banks" means each of Societe Generale, London
Branch, The Chase Manhattan Bank, London Branch, Deutsche Bank, London Branch
and Rabobank Nederland, London Branch, and any such replacement bank thereof as
listed on the Reuters Screen LIBO Page and their respective successors, and if
any such banks are not at the applicable time providing interest rates as
contemplated within the definition of the "Applicable LIBOR Rate," Reference
Banks shall mean the remaining bank or banks so providing such rates. In the
event that less than two of such banks are providing such rates, the Company
shall use reasonable efforts to appoint additional Reference Banks so that there
are at least two such banks providing such rates; provided, however, that such
banks appointed by the Company shall be London offices of leading banks engaged
in the London interbank market. "Reuters Screen LIBO Page" means the display
deigned as page "LIBO" on the Reuter Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of displaying
London Interbank Offered Rates of leading banks).
If the date due for payment of interest on or principal of the
Securities or the date fixed for redemption of any Security shall not be a
Business Day, then payment of interest or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Indenture. The Indenture provides that in certain
events such declaration and its consequences may be waived by the holders of a
majority in aggregate principal amount of the Securities then outstanding and
that, prior to any such declaration, such holders may waive any past default
under the Indenture and its consequences except a default in the payment of
principal of or premium, if any, or interest on any of the Securities. Any such
consent or waiver by the holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Security and any Security which
A-6
may be issued in exchange or substitution herefor, whether or not any notation
thereof is made upon this Security or such other Securities.
Subject to certain exceptions set forth in the Indenture, the
Indenture or the Securities may be amended without notice to any Holder but with
the written consent of the Holders of at least a majority in outstanding
principal amount of the Securities; provided that no such amendment shall (a)
--------
reduce the amount of Securities whose Holders must consent to an amendment; (b)
reduce the rate of or extend the time for payment of interest on any Security;
(c) reduce the principal of or extend the Stated Maturity of any Security; (d)
reduce the premium payable upon the redemption or repurchase of any Security or
change the time at which any Security may or shall be redeemed or repurchased in
accordance with this Indenture; (e) make any Security payable in money other
than that stated in the Security; (f) modify or affect in any manner adverse to
the Holders the terms and conditions of the obligation of the Company for the
due and punctual payment of the principal of or interest on Securities; or (g)
make any change in Section 4.4 or 4.7 of the Indenture or the second sentence of
Section 7.2 of the Indenture, without the consent of each holder of Securities
affected by such amendment.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company or the
Guarantors, which are absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the place, times, and rate,
and in the currency, herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple thereof.
The Securities may be exchanged for a like aggregate principal amount
of Securities of other authorized denominations in accordance with and subject
to the limitations provided in the Indenture.
Upon due presentment for registration of transfer of this Security, a
new Security or Securities of authorized denominations, for a like aggregate
principal amount, will be issued to the transferee as provided in the Indenture.
No service charge shall be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto.
At any time, the Company may redeem, in whole or in part, the
Securities on not less than 30 nor more than 60 days' prior notice at a
redemption price equal to 103.00% of the aggregate principal amount thereof if
redeemed prior to January 15, 1999, 101.50% of the aggregate principal amount
thereof if redeemed on or after January 15, 1999 and prior to January 15, 2000,
100.75% of the aggregate principal amount thereof if redeemed on or after
January 15, 2000 and prior to January 15, 2001, and 100% of the aggregate
principal amount thereof if redeemed on or after January 15, 2001, plus, in each
case, accrued interest thereon to, but excluding, the date of redemption.
Subject to payment by the Company of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part)
A-7
shall cease to accrue upon the date duly fixed for redemption of this Security
(or portion hereof if this Security is redeemed in part).
The election of the Company to redeem any Securities pursuant to
Section 12.1 of the Indenture shall be evidenced by a resolution of the Board of
Directors. In case of any redemption at the election of the Company, the
Company shall, at least 60 days prior to the redemption date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such redemption date and of the principal amount of Securities to
be redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to
Section 12.4(e) of the Indenture.
In the event of a Change of Control, the Company will make a Change of
Control Offer to purchase all of the Securities outstanding at a price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
and unpaid interest thereon to the date of purchase, pursuant to an offer made
in conformity with the procedures set forth in Section 3.15 of the Indenture.
In the event of certain Asset Dispositions, subject to certain
conditions, the Company will make an Offer to purchase an aggregate principal
amount of Securities outstanding equal to the amount of Net Available Cash at a
price equal to 100% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest thereon to the date of purchase.
The Company, the Trustee, and any authorized agent of the Company or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or the Trustee or any authorized agent of the Company or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any, and, subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Company nor
the Trustee nor any authorized agent of the Company or the Trustee shall be
affected by any notice to the contrary. So long as the Depository, or its
nominee, is the registered holder of the Restricted Global Security for the
Initial Notes, the Depository, or its nominee, will be considered the absolute
owner of the Initial Notes represented by the Restricted Global Security for all
purposes under the Indenture and this Security. Owners of beneficial interests
in the Restricted Global Security will not be considered the owners or Holders
of any Securities.
The Securities are subject to defeasance as described in the
Indenture.
No recourse shall be had for the payment of the principal of and
premium, if any, or the interest on this Security, for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the
A-8
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
A-9
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEES]
Each Guarantor has unconditionally and irrevocably guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the
Indenture, on a senior unsecured basis to each Holder and to the Trustee and its
successors and assigns all obligations of the Company under this Indenture and
the Securities. Each Guarantor has further agreed that the obligations of the
Company may be extended or renewed, in whole or in part, without notice or
further assent from such Guarantor, and that such Guarantor will remain bound
under Article X of the Indenture notwithstanding any extension or renewal of any
such obligation.
The obligations of the Guarantors to the holders of Securities and to
the Trustee pursuant to the Subsidiary Guarantees and the Indenture are
expressly set forth in Article X of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Subsidiary Guarantees.
SCHEIN PHARMACEUTICAL
INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL PA, INC.
By:
--------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL SERVICE
COMPANY, INC.
By:
--------------------------------
Name:
Title:
STERIS LABORATORIES, INC.
By:
--------------------------------
Name:
Title:
A-10
MARSAM PHARMACEUTICALS INC.
By:
-------------------------------------------
Name:
Title:
DANBURY PHARMACAL, INC.
By:
-------------------------------------------
Name:
Title:
DANBURY PHARMACAL PUERTO RICO, INC., as Guarantor
By:
-------------------------------------------
Name:
Title:
A-11
[ASSIGNMENT FORM]
For value received ____________________________________________________________
hereby sells, assigns and transfers unto
____________________________________________________________
____________________________________________________________
Please insert social security or other identifying number of
assignee
Please print or typewrite name and address including zip code of
assignee:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
the within Security and does hereby irrevocably constitute and appoint
________________________________ Attorney to transfer the Security on the books
of the Company with full power of substitution in the premises.
Date: _______________ Your Signature: _________________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:_____________________________________
A-12
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have the Security attached hereto purchased by
the Company pursuant to Section 3.10 or 3.15 of the Indenture, check the
appropriate box below:
[_] Section 3.10 [_] Section 3.15
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 3.10 or Section 3.15 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Date: _______________________ Your Signature:________________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.:________________
Signature Guarantee:___________________
A-13
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
CUSIP NO.
No. $
SCHEIN PHARMACEUTICAL, INC.
Senior Floating Rate Notes due 2004
Schein Pharmaceutical, Inc., a Delaware corporation (the "Company"),
for value received hereby promises to pay to ______________________ or its
registered assigns the principal sum of _________________ Dollars on December
24, 2004, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest at a rate per annum equal to the Applicable LIBOR
Rate (as defined herein).
The Company shall pay interest quarterly on January 15, April 15, July
15, and October 15, of each year, commencing with January 15, 1998. Interest on
the Securities will accrue from the most recent interest payment date to which
interest on the Securities has been paid or duly provided for, or if no interest
has been paid or duly provided for on the Securities, from December 24, 1997,
until payment of said principal sum has been made or duly provided for. The
interest so payable on any January 15, April 15, July 15 and October 15, will,
except as otherwise provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Security is registered at the close of
business on the December 31, March 31, June 30, and September 30 preceding such
January 15, April 15, July 15 and October 15, whether or not such day is a
business day; provided that interest may be paid, at the option of the Company,
--------
by mailing a check therefor payable to the registered holder entitled thereto at
his last address as it appears on the Security register.
Interest on this Security will accrue at a rate equal to the
Applicable LIBOR Rate (as defined herein) and will be calculated on a formula
basis by multiplying the principal amount of the Securities then outstanding by
the Applicable LIBOR Rate, and multiplying such product by the LIBOR Fraction
(as defined herein).
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
B-1
This Security shall be deemed to be contract under the laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of the State of New York, without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
SCHEIN PHARMACEUTICAL, INC.
By:
------------------------------------
Name:
Title:
B-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in
the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:_____________________________________
Authorized Signatory
B-3
[FORM OF REVERSE OF EXCHANGE NOTE]
SCHEIN PHARMACEUTICAL, INC.
Senior Floating Rate Notes due 2004
This Security is one of a duly authorized issue of debt securities of
the Company, limited to the aggregate principal amount of $___________ (except
as otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an Indenture dated as of December 24, 1997 (the "Indenture"), duly
executed and delivered by the Company and the Guarantors to the Trustee (herein
called the "Trustee"). The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as in effect on the date of the Indenture (the "Trust
Indenture Act"). Capitalized terms used herein and not defined have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms and Securityholders are referred to the Indenture and the Trust
Indenture Act for a statement of those terms. The terms of the Indenture shall
govern any inconsistencies between the Indenture and the Securities.
This Security is one of the Exchange Notes referred to in the
Indenture.
Each Guarantor has jointly and severally guaranteed, pursuant to
Article X of the Indenture, the due and punctual payment of the principal of,
premium (if any) and interest on the Securities and all other amounts payable by
the Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture.
The Securities will bear interest at the Applicable LIBOR Rate.
"Applicable LIBOR Rate" means, for each quarterly period during which any
Security is outstanding subsequent to the initial quarterly period, 300 basis
points over the rate determined by the Company (notice of such rate to be sent
to the Trustee by the Company on the date of determination thereof) equal to the
average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the
offered rates for deposits in U.S. dollars for a period of three months, as set
forth on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the
Interest Rate Determination Date for such quarterly period; provided, however,
that if only one such offered rate appears on the Reuters Screen LIBO Page, the
Applicable LIBOR Rate for such quarterly period will mean such offered rate. If
such rate is not available at 11:00 a.m., London time, on the Interest Rate
Determination Date for such quarterly period, then the Applicable LIBOR Rate for
such quarterly period will mean the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the interest rates per annum at which
deposits in amounts equal to US$1 million are offered by the Reference Banks to
leading banks in the London interbank market for a period of three months as of
11:00 a.m., London time, on the Interest Rate Determination Date for such
quarterly period. If on any Interest Rate Determination Date, at least two of
the Reference Banks provide such offered quotations, then the Applicable LIBOR
Rate for such quarterly period will be determined in accordance with the
preceding sentence
B-4
on the basis of the offered quotation of those Reference Banks providing such
quotations; provided, however, that if fewer than two of the Reference Banks are
so quoting such interest rates as mentioned above, the Applicable LIBOR Rate for
such quarterly period shall be deemed to be the applicable LIBOR Rate for the
next preceding quarterly period and in the case of the quarterly period next
succeeding the initial quarterly period, the Applicable LIBOR Rate shall be
8.9375%. Notwithstanding the foregoing, the Applicable LIBOR Rate for the
initial quarterly period shall be 8.9375%. "Interest Rate Determination Date"
means, with respect to each quarterly period, the second London Banking Day
prior to the first day of such quarterly period. "London Banking Day" means any
day in which dealings in United States dollars are transacted or, with respect
to any future date, are expected to be transacted in the London interbank
market. "LIBOR Fraction" means the actual number of days in the quarterly period
divided by 360; provided, however, that the number of days in each quarterly
period shall be calculated by including the first day of such quarterly period
and excluding the last. "quarterly period" means the period from and including a
scheduled payment date (or December 24, 1997, in the case of the initial
quarterly period) through the day next preceding the following scheduled
interest payment date. "Reference Banks" means each of Societe Generale, London
Branch, The Chase Manhattan Bank, London Branch, Deutsche Bank, London Branch
and Rabobank Nederland, London Branch, and any such replacement bank thereof as
listed on the Reuters Screen LIBO Page and their respective successors, and if
any such banks are not at the applicable time providing interest rates as
contemplated within the definition of the "Applicable LIBOR Rate," Reference
Banks shall mean the remaining bank or banks so providing such rates. In the
event that less than two of such banks are providing such rates, the Company
shall use reasonable efforts to appoint additional Reference Banks so that there
are at least two such banks providing such rates; provided, however, that such
banks appointed by the Company shall be London offices of leading banks engaged
in the London interbank market. "Reuters Screen LIBO Page" means the display
deigned as page "LIBO" on the Reuter Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of displaying
London Interbank Offered Rates of leading banks).
If the date due for payment of interest on or principal of the
securities or the date fixed for redemption of any Security shall not be a
Business Day, then payment of interest or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Indenture. The Indenture provides that in certain
events such declaration and its consequences may be waived by the holders of a
majority in aggregate principal amount of the Securities then outstanding and
that, prior to any such declaration, such holders may waive any past default
under the Indenture and its consequences except a default in the payment of
principal of or premium, if any, or interest on any of the Securities. Any such
consent or waiver by the holder of this
B-5
Security (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Security
and any Security which may be issued in exchange or substitution herefor,
whether or not any notation thereof is made upon this Security or such other
Securities.
Subject to certain exceptions set forth in the Indenture, the
Indenture or the Securities may be amended without notice to any Holder but with
the written consent of the Holders of at least a majority in outstanding
principal amount of the Securities; provided that no such amendment shall (a)
--------
reduce the amount of Securities whose Holders must consent to an amendment; (b)
reduce the rate of or extend the time for payment of interest on any Security;
(c) reduce the principal of or extend the Stated Maturity of any Security; (d)
reduce the premium payable upon the redemption or repurchase of any Security or
change the time at which any Security may or shall be redeemed or repurchased in
accordance with this Indenture; (e) make any Security payable in money other
than that stated in the Security; (f) modify or affect in any manner adverse to
the Holders the terms and conditions of the obligation of the Company for the
due and punctual payment of the principal of or interest on Securities; or (g)
make any change in Section 4.4 or 4.7 of the Indenture or the second sentence of
Section 7.2 of the Indenture, without the consent of each holder of Securities
affected by such amendment.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company or the
Guarantors, which are absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the place, times, and rate,
and in the currency, herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple thereof.
The Securities may be exchanged for a like aggregate principal amount
of Securities of other authorized denominations in accordance with and subject
to the limitations provided in the Indenture.
Upon due presentment for registration of transfer of this Security, a
new Security or Securities of authorized denominations, for a like aggregate
principal amount, will be issued to the transferee as provided in the Indenture.
No service charge shall be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto.
At any time, the Company may redeem, in whole or in part, the
Securities on not less than 30 nor more than 60 days' prior notice at a
redemption price equal to 103.00% of the aggregate principal amount thereof if
redeemed prior to January 15, 1999, 101.50% of the aggregate principal amount
thereof if redeemed on or after January 15, 1999 and prior to January 15, 2000,
100.75% of the aggregate principal amount
B-6
thereof if redeemed on or after January 15, 2000 and prior to January 15, 2001
and 100% of the aggregate principal amount thereof if redeemed on or after
January 15, 2001, plus, in each case, accrued interest thereon to, but
excluding, the date of redemption.
Subject to payment by the Company of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the date duly fixed for
redemption of this Security (or portion hereof if this Security is redeemed in
part).
The election of the Company to redeem any Securities pursuant to
Section 12.1 of the Indenture shall be evidenced by a resolution of the Board of
Directors. In case of any redemption at the election of the Company, the
Company shall, at least 60 days prior to the redemption date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such redemption date and of the principal amount of Securities to
be redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to
Section 12.4(e) of the Indenture.
In the event of a Change of Control, the Company will make a Change of
Control Offer to purchase all of the Securities outstanding at a price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
and unpaid interest thereon to the date of purchase, pursuant to an offer made
in conformity with the procedures set forth in Section 3.15 of the Indenture.
In the event of certain Asset Dispositions, subject to certain
conditions, the Company will make an Offer to purchase an aggregate principal
amount of Securities outstanding equal to the amount of Net Available Cash at a
price equal to 100% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest thereon to the date of purchase.
The Company, the Trustee, and any authorized agent of the Company or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or the Trustee or any authorized agent of the Company or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any, and, subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Company nor
the Trustee nor any authorized agent of the Company or the Trustee shall be
affected by any notice to the contrary.
The Securities are subject to defeasance as described in the
Indenture.
No recourse shall be had for the payment of the principal of and
premium, if any, or the interest on this Security, for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto,
B-7
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
B-8
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEES]
Each Guarantor has unconditionally and irrevocably guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the
Indenture, on a senior unsecured basis to each Holder and to the Trustee and its
successors and assigns all obligations of the Company under this Indenture and
the Securities. Each Guarantor has further agreed that the obligations of the
Company may be extended or renewed, in whole or in part, without notice or
further assent from such Guarantor, and that such Guarantor will remain bound
under Article X of the Indenture notwithstanding any extension or renewal of any
such obligation.
The obligations of the Guarantors to the holders of Securities and to
the Trustee pursuant to the Subsidiary Guarantees and the Indenture are
expressly set forth in Article X of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Subsidiary Guarantees.
SCHEIN PHARMACEUTICAL
INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL PA, INC.
By:
-------------------------------------
Name:
Title:
SCHEIN PHARMACEUTICAL SERVICE
COMPANY, INC.
By:
-------------------------------------
Name:
Title:
B-9
STERIS LABORATORIES, INC.
By:
-------------------------------------
Name:
Title:
MARSAM PHARMACEUTICALS INC.
By:
-------------------------------------
Name:
Title:
DANBURY PHARMACAL, INC.
By:
-------------------------------------
Name:
Title:
DANBURY PHARMACAL PUERTO RICO, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
B-10
[ASSIGNMENT FORM]
For value received ____________________________________________________________
hereby sells, assigns and transfers unto
____________________________________________________________
____________________________________________________________
Please insert social security or other identifying number of
assignee
Please print or typewrite name and address including zip code of
assignee:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
the within Security and does hereby irrevocably constitute and appoint
________________________________ Attorney to transfer the Security on the books
of the Company with full power of substitution in the premises.
Date: Your Signature:___________________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:________________________________________
B-11
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have the Security attached hereto purchased by
the Company pursuant to Section 3.10 or 3.15 of the Indenture, check the
appropriate box below:
[_] Section 3.10 [_] Section 3.15
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 3.10 or Section 3.15 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Date: _______________________ Your Signature:________________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.:________________
Signature Guarantee:___________________
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE FOR
TRANSFER FROM RESTRICTED GLOBAL SECURITY OR
RESTRICTED SECURITY TO RESTRICTED SECURITY
(Transfers Pursuant to (S) 2.5(b)(ii)
or (S) 2.5(b)(iv) of the Indenture)
_______________, 199_
[Trustee]
[Address]
Re: Schein Pharmaceutical, Inc.
Senior Floating Rate Notes
due 2004 (the "Securities")
---------------------------
Reference is hereby made to the Indenture dated as of December __,
1997 (the "Indenture") among Schein Pharmaceutical, Inc., the Guarantors and
_____________________, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to $ aggregate principal amount of
Securities which are held [in the form of the Restricted Global Security (CUSIP
No. ) with the Depository]/*/ in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities.
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Securities, (ii)
to a transferee that the Transferor reasonably believes (a) is an Institutional
Accredited Investor and is acquiring Securities for its own account or for one
or more accounts as to which the transferee exercises sole investment discretion
and (b) is not a pharmaceutical company or an Affiliate of a pharmaceutical
company, and (iii) and in accordance with applicable securities laws of any
state of the United States or any other jurisdiction.
- ---------------
/*/ Insert and modify, if appropriate.
[Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
cc: Schein Pharmaceutical, Inc.
C-2
EXHIBIT D
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers Pursuant to (S) 2.5(b)(ii)
and (S) 2.5(b)(iv) of the Indenture)
________________, 199_
[Trustee]
[Address]
Re: Schein Pharmaceutical, Inc.
Senior Floating Rate Notes
due 2004 (the "Securities")
---------------------------
Reference is hereby made to the Indenture dated as of December __,
1997 (the "Indenture") among Schein Pharmaceutical, Inc., the Guarantors and
________________________________, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to $ aggregate principal amount of
Securities which are held [in the form of the Global Security (CUSIP No. )
with the Depository]/*/ in the name of [name of transferor] (the "Transferor")
to effect the transfer of the Securities to the undersigned.
In connection with such request, and in respect of such Securities, we
confirm that:
1. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold within the United States or to or for the account or
benefit of U.S. persons, except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a domestic broker-dealer) to
the Trustee (as defined in the Indenture relating to the Securities) a
signed letter containing certain representations and agreements relating to
the
- ---------------
/*/ Insert and modify, if appropriate.
D-1
the restrictions on transfer of the Securities (the form of which letter
can be obtained from the Trustee), (D) outside the United States in
accordance with Regulation S under the Securities Act (if available), (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (F) pursuant to an effective registration
statement under the Securities Act.
2. We understand that, on any proposed resale of Securities, we will
be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions.
3. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or their investment, as the case may be.
4. We are a corporation, partnership or other entity or person having
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the
Securities, and we are (or any account for which we are purchasing is) an
Institutional Accredited Investor, able to bear the economic risk of
investment in the Securities.
5. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have
authority to make, and do make, the statements contained in this letter)
and not with a view to any distribution of the Securities, subject,
nevertheless, to the understanding that the disposition of our property
shall at all times be and remain within our control.
6. We understand that (a) the Securities will be delivered to us in
registered form only and that the certificate delivered to us in respect of
the Securities will bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), OR (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
D-2
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INSTITUTION"), OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION AND (2) AGREES THAT IT WILL NOT,
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY,
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO SCHEIN
PHARMACEUTICAL, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) TO AN ACCREDITED INSTITUTION THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER
THE ORIGINAL ISSUANCE HEREOF, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INSTITUTION, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
and (b) such certificates will be reissued without the foregoing
legend only in the event of a disposition of the Securities in
accordance with the provisions of Section 2.5 of the Indenture.
7. We agree that we will give to each person to whom we transfer
Securities notice of any restrictions on transfer of Securities.
D-3
8. We acknowledge that the Trustee will not be required to accept for
registration of transfer any Securities acquired by us, except upon
presentation of evidence satisfactory to the Company and the Trustee that
the restrictions set forth herein have been complied with.
9. We acknowledge that the Company, the Trustee and others will rely
upon the truth and accuracy of the foregoing acknowledgments,
representations or agreements and agree that if any of the acknowledgments,
representations or agreements deemed to have been made by our purchase of
Notes are no longer accurate, we shall promptly notify the Company and the
Trustee.
The Company and the Trustee are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Purchaser]
By:
___________________________________
Name:
_________________________________
Title:
________________________________
Dated:
cc: Schein Pharmaceutical, Inc.
D-4
EXHIBIT E
FORM OF LEGAL OPINION ON TRANSFER
_________________, 199[ ]
[Trustee]
[Address]
Re: Schein Pharmaceutical, Inc.
Senior Floating Rate Notes
due 2004 (the "Securities")
---------------------------
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the sale by
__________________ (the "Transferor") to ____________________________ (the
"Purchaser") of $_____________ aggregate principal amount of _______ Senior
Floating Rate Notes due 2004 of Schein Pharmaceutical, Inc. (the "Securities").
We have examined such documents and records as we have deemed
appropriate. In our examination of the foregoing, we have assumed the
authenticity of all documents, the genuineness of all signatures and the due
authorization, execution and delivery of the aforementioned by each of the
parties thereto. We have further assumed the accuracy of the representations
contained in the documents set forth above made by the parties executing such
documents. We have also assumed that the sale of the Securities to the
Transferor was exempt from the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended (the "Securities Act").
Based on the foregoing, we are of the opinion that the sale to the
Purchaser of the Securities does not require registration of such Securities
under the Securities Act.
Very truly yours,
E-1
EXHIBIT F
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM RESTRICTED SECURITY TO RESTRICTED GLOBAL SECURITY
(Transfers Pursuant to (S) 2.5(b)(iii) of the Indenture)
[Trustee]
[Address]
Re: Schein Pharmaceutical, Inc.
Senior Floating Rate Notes
due 2004 (the "Securities")
---------------------------
Reference is hereby made to the Indenture dated as of December __,
1997 (the "Indenture") among Schein Pharmaceutical, Inc., the Guarantors and
________________________, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to $ aggregate principal amount of
Securities which are held in the name of [name of transferor] (the "Transferor")
to effect the transfer of the Securities in exchange for an equivalent
beneficial interest in the Restricted Global Security.
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Securities and
(ii) Rule 144A under the Securities Act to a transferee that the Transferor
reasonably believes is purchasing the Securities for its own account or an
account with respect to which the transferee and any such account is a Qualified
Institutional Buyer in a transaction meeting the requirements of Rule 144A and
in accordance with any applicable securities law of any state of the United
States.
[Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
cc: Schein Pharmaceutical, Inc.
F-1
SCHEDULE 1.1
PERMITTED HOLDERS
Marvin H. Schein.
Trust established by Marvin H. Schein under trust agreement dated September 9,
1994 (including trustee thereunder)
Trust established by Marvin H. Schein under trust agreement dated December 31,
1993 (including trustee thereunder)
Trust established by Pamela Schein under trust agreement dated October 26, 1994
(including trustee thereunder)
Trust established by the trustees under article fourth of the Will of Jacob M.
Schein for the benefit of Pamela Schein and her issue under trust agreement
dated September 29, 1994 (including trustee thereunder)
Pamela Joseph
Trust established by Pamela Joseph under trust agreement dated September 28,
1994 (including trustee thereunder)
Martin Sperber
Trust established by Martin Sperber under trust agreement dated December 31,
1993 (including trustee thereunder)
Trust established by Martin Sperber under trust agreement dated April 28, 1995
(including trustee thereunder)
Stanley M. Bergman
Trust established by Stanley M. Bergman under trust agreement dated December 31,
1993 (including trustee thereunder)
Trust established by Stanley M. Bergman under trust agreement dated April 14,
1995 (including trustee thereunder)
Voting Trustee under Voting Trust Agreement dated September 30, 1994 (including
trustee thereunder)