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DVI, INC.,
Issuer
to
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
--------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 30, 1997
to
DEBT SECURITIES INDENTURE
Dated as of January 27, 1997.
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FIRST SUPPLEMENTAL INDENTURE, dated as of January 30, 1997,
between DVI, Inc., a Delaware corporation, and First Trust National Association,
a national banking association, trustee (the "Trustee") under the Debt
Securities Indenture dated as of January 27, 1997 (the "Indenture").
RECITALS
Section 901(2) of the Indenture permits supplements thereto
without the consent of Holders of Securities to add to the covenants of the
Company for the benefit of all or any series of Securities and Section 902(7) of
the Indenture permits supplements thereto to establish the form or terms of
Securities of any series as permitted by Sections 201 and 301; and
The Company wishes to establish the form and terms of its 9 7/8%
Senior Notes due 2004 (the "Notes") and to add to the Indenture certain
covenants of the Company only for the benefit of the Holders of the Notes.
NOW THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE ONE
THE NOTES
SECTION 1.01. Creation of the Debt Securities. In accordance with
Section 301 of the Indenture, the Company hereby creates the Notes as a series
of its Securities issued pursuant to the Indenture. The Notes shall be issued in
an aggregate principal amount not to exceed $100,000,000.
SECTION 1.02. Form of the Debt Securities. The Notes shall be
represented by a single fully-registered global note in book-entry form (the
"Global Note") which shall be deposited with, or on behalf of, The Depository
Trust Company, New York, New York ("DTC") and registered in the name of the
nominee of DTC. The Notes shall be in the form of Exhibit A attached hereto. So
long as DTC, or its nominee, is the registered owner of a Global Note, DTC or
its nominee, as the case may be, shall be considered the sole owner or Holder of
the Notes represented by such Global Note for all purposes under the Indenture.
Ownership of beneficial interests in the Global Notes shall be shown on, and
transfers thereof shall be effected only through, records maintained by DTC
(with respect to beneficial interests of participants or persons that hold
interests through participants) or by participants or persons that hold
interests through participants (with respect to beneficial interests of
beneficial owners).
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SECTION 1.03. Terms and Conditions of the Debt Securities. The Notes
shall be governed by all the terms and conditions of the Indenture, as
supplemented by this First Supplemental Indenture, and in particular, the
following provisions shall be terms of the Notes:
(a) Redemption. The Notes shall be redeemable at the election of the
Company, as a whole or from time to time in part, at any time on or after
February 1, 2002, on not less than 30 nor more than 60 days' prior notice at the
Redemption Prices (expressed as percentages of principal amount) set forth
below, together with accrued interest, if any, to the Redemption Date, if
redeemed during the 12-month period beginning on February 1 of the years
indicated below (subject to the right if Holders of record on the relevant
record date to receive interest due on an Interest Payment Date):
Year Redemption Price
---- ----------------
2002 102.821
2003 101.411
and thereafter at 100% of the principal amount, together with accrued interest,
if any, to the Redemption Date.
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee by such method as the Trustee deems fair and appropriate.
(b) Payment of Principal and Interest. Settlement for the Notes shall
be made in immediately available funds. All payments of principal and interest
shall be made by the Company in immediately available funds. The Notes shall
trade in the Same-Day Funds Settlement System of the DTC until Maturity, and
secondary market trading activity for the Notes shall settle in immediately
available funds.
(c) Applicability of Defeasance or Covenant Defeasance. The provisions
of Article 14 of the Indenture shall apply to the Notes.
ARTICLE TWO
DEFINITIONS
SECTION 201. For purposes of this First Supplemental Indenture,
all terms used herein, unless otherwise defined, shall have the meanings
assigned to them in the Indenture. Except as the context otherwise requires,
references to the "Indenture" are to the Indenture as amended and supplemented
hereby.
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SECTION 202. Section 101 of the Indenture is hereby amended by deleting
the definitions of "Closing Date," "Debt," "Maturity" and "Qualified Equity
Interest" therein contained and by adding thereto the definitions of "Acquired
Debt," "Asset Sale," "Average Life," "Change of Control," "Consolidated Adjusted
Net Income," "Consolidated Leverage Ratio," "Disinterested Director," "Excess
Spread," "Excess Spread Receivables," "guarantee," "Hedging Obligations,"
"Investment," "Net Cash Proceeds," "Permitted Investments," "Permitted Joint
Ventures," "Permitted Warehouse Debt," "Preferred Stock," "Qualified Equity
Interest," "Qualified Stock," "Receivables," "Subordinated Debt," "Unrestricted
Subsidiary," "Warehouse Debt" and "Warehouse Facility" set forth below:
"Acquired Debt" means Debt of a Person (a) existing at the time
such Person is merged with or into the Company or becomes a Subsidiary
or (b) assumed in connection with the acquisition of assets from such
Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease
or other disposition (including, without limitation, by way of merger
or consolidation) (collectively, a "transfer") by the Company or a
Restricted Subsidiary, directly or indirectly, in one or a series of
related transactions, to any Person other than the Company or a
Restricted Subsidiary of (a) any Capital Stock of any Restricted
Subsidiary, (b) all or substantially all of the properties and assets
of the Company and its Restricted Subsidiaries representing a division
or line of business, (c) any other properties or assets of the Company
or any Restricted Subsidiary, other than transactions in the ordinary
course of business or (d) any Excess Spread Receivables. For the
purposes of this definition, the term "Asset Sale" does not include any
transfer of properties or assets (i) that is governed by the provisions
of the Indenture described under "Consolidation, Merger and Sale of
Assets", (ii) between or among the Company and its Restricted
Subsidiaries pursuant to transactions that do not violate any other
provision of the Indenture, (iii) to an Unrestricted Subsidiary, if
permitted under the "Limitation on Restricted Payments" covenant, or
(iv) the gross proceeds of which do not exceed $1 million for any
particular item. For purposes of this definition, the term "ordinary
course of business" shall include, without limitation, (x) dispositions
of collateral acquired by the Company through foreclosure or otherwise
and (y) disposals of Receivables through securitization, whole loan
sales or other similar transactions.
"Average Life" means, as of the date of determination with respect
to any Debt or Disqualified Stock, the quotient obtained by dividing
(a) the sum of the products of (i) the number of years from the date of
determination to the date or dates of each successive scheduled
principal or liquidation value payment of such Debt or Disqualified
Stock, respectively, multiplied by (ii) the amount of each such
principal or liquidation value payment by (b) the sum of all such
principal or liquidation value payments.
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"Change of Control" means the occurrence of any of the following
events:
(a) any Person or "group" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the Voting Stock of the Company;
(b) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election to such Board
of Directors, or whose nomination for election by the stockholders of
the Company, was approved by a vote of 66-2/3% of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
(c) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
"Closing Date" means the date on which the Notes are originally issued
under the Indenture.
"Consolidated Adjusted Net Income" means, for any period, the net
income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding (a)
any net after-tax extraordinary gains or losses (less all fees and expenses
relating thereto), (b) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (c) the portion of net
income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
Restricted Subsidiary in cash during such period, (d) the net income (or loss)
of any Person combined with the Company or any Restricted Subsidiary on a
"pooling of interests" basis attributable to any period prior to the date of
combination and (e) the net income (but not the net loss) of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is at the date of determination
restricted, directly or indirectly, except to
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the extent that such net income could be paid to the Company or a Restricted
Subsidiary thereof by loans, advances, intercompany transfers, principal
repayments or otherwise.
"Consolidated Leverage Ratio" means, at any date of determination, the
ratio of (i) the aggregate amount of all Debt of the Company and its Restricted
Subsidiaries at such date on a consolidated basis, excluding (A) Permitted
Warehouse Debt and (B) Hedging Obligations permitted to be incurred pursuant to
clause (v) of Section 1007 to (ii) the Consolidated Net Worth of the Company at
such date.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (a) every obligation of such Person for money borrowed, (b) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services, (e) Capitalized Lease
Obligations, (f) all Disqualified Stock of such Person valued at its maximum
fixed repurchase price, plus accrued and unpaid dividends, (g) all obligations
of such Person under or in respect of Hedging Obligations, and (h) every
obligation (to the extent guaranteed by such Person) of the type referred to in
clauses (a) through (g) of another Person and all dividends of another Person
the payment of which, in either case, such Person has guaranteed. For purposes
of this definition, the "maximum fixed repurchase price" of any Disqualified
Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Stock as if such Disqualified
Stock were repurchased on any date on which Debt is required to be determined
pursuant to the Indenture, and if such price is based upon, or measured by, the
fair market value of such Disqualified Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer of such
Disqualified Stock. Notwithstanding the foregoing, trade accounts payable and
accrued liabilities arising in the ordinary course of business and any liability
for federal, state or local taxes or other taxes owed by such Person shall not
be treated as Debt for purposes of this definition. Furthermore, any securities
issued in a securitization by a special purpose owner trust or other entity
formed by or on behalf of a Person and to which Receivables have been sold or
otherwise transferred by or on behalf of such Person or its Subsidiaries shall
not be treated as Debt of such Person or its Subsidiaries for purposes of this
definition, regardless of whether such securities are treated as indebtedness
for tax or accounting purposes; provided, however, that any guarantee by the
Company or a Restricted Subsidiary (other than such special purpose owner trust
or similar entity) of indebtedness arising in connection with such
securitization shall be treated as Debt for purposes of this definition.
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"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under the Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions (other than by ownership of securities issued by the Company).
"Excess Spread" means, over the life of a "pool" of Receivables that
have been sold by the Company or a Restricted Subsidiary to a trust or other
Person in a securitization or sale, the rights retained by the Company or its
Restricted Subsidiaries at or subsequent to the closing of such securitization
or sale with respect to such "pool", including any rights to receive cash flows
attributable to such pool and any servicing rights retained.
"Excess Spread Receivables" of the Company or a Restricted Subsidiary
means the right to Excess Spread capitalized on the Company's consolidated
balance sheet (the amount of which shall be the present value of the Excess
Spread, calculated in accordance with GAAP).
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limitation, the payment of
amounts drawn down under letters of credit. For purposes of this definition, the
following actions, taken by any Person in connection with a disposition or
permanent funding of Receivables through a securitization, whole loan sale or
other similar transaction, shall not constitute a guarantee by that Person: (i)
the furnishing of collateral or credit enhancement, whether in the form of cash,
marketable securities, Excess Spread Receivables or otherwise; (ii) the
acquisition and ownership of a subordinated or junior class of equity or debt
securities issued in a securitization; or (iii) the provision of customary
representations and warranties regarding the documentation of and credit
underwriting practices followed with respect to, the Receivables being disposed
of or funded.
"Hedging Obligations" means the obligations of any Person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or the value of foreign
currencies.
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"Investment" means, (i) directly or indirectly, any advance, loan or
other extension of credit (including, without limitation, by way of guarantee or
similar arrangement) or capital contribution to, the purchase of any stock,
bonds, notes, debentures or other securities of, or the acquisition, by purchase
or otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the making of any
investment in any Person, (ii) the designation of any Restricted Subsidiary as
an Unrestricted Subsidiary and (iii) the transfer of any assets or properties
from the Company or a Restricted Subsidiary to any Unrestricted Subsidiary,
other than the transfer of assets or properties made in the ordinary course of
business. Investments exclude extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices.
"Maturity" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein or in the Indenture
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption, purchase or otherwise.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or cash equivalents, including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of (a) brokerage commissions and other fees and
expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (b) provisions for all taxes payable as a result of
such Asset Sale, (c) payments made to retire Debt where payment of such Debt is
secured by the assets that are the subject of such Asset Sale, (d) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets that are subject to the
Asset Sale and (e) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required in accordance
with GAAP against any liabilities associated with such Asset Sale and retained
by the seller after such Asset Sale, including pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Permitted Investments" means any of the following:
(a) Investments in (i) securities with a maturity of 180 days or
less issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof);
(ii) certificates of deposit or acceptances with a maturity of 180 days
or less of any financial institution that
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is a member of the Federal Reserve System having combined capital and
surplus of not less than $500 million; and (iii) commercial paper with
a maturity of 180 days or less issued by a corporation that is not an
Affiliate of the Company and is organized under the laws of any state
of the United States or the District of Columbia and having the highest
rating obtainable from ▇▇▇▇▇'▇ Investors Service, Inc. or Standard &
Poor's Ratings Services;
(b) the application, directly or indirectly of up to $5 million of
the net proceeds from the sale of the Notes to an Investment in a
Permitted Joint Venture doing business in Latin America;
(c) Investments by the Company or any Restricted Subsidiary in
another Person, if as a result of such Investment (i) such other Person
becomes a Restricted Subsidiary or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially
all of its assets to, the Company or a Restricted Subsidiary;
(d) Investments by the Company or any of the Restricted
Subsidiaries in any of the other of them;
(e) Investments in Receivables or assets owned or used in the
ordinary course of business;
(f) Investments in existence on the Closing Date and any renewals,
extensions, substitutions, refinancing or replacements of any such
Investments to the extent they do not require an increase in the amount
of such Investment;
(g) promissory notes received as a result of Asset Sales permitted
under Section 1010;
(h) Excess Spread Receivables arising from the securitization or
sale of Receivables by the Company or any of its Restricted
Subsidiaries;
(i) Investments comprised of promissory notes, stock, obligations
or securities received in the ordinary course of business in settlement
of debts owing to the Company or any of its Restricted Subsidiaries, or
on sales of assets acquired through foreclosure or similar
transactions;
(j) other Investments in Permitted Joint Ventures that do not
exceed $20 million at any time outstanding; and
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(k) Loans or other extensions of credit from the Company or a
Restricted Subsidiary to a Permitted Joint Venture for the purpose of
providing liquidity to such Permitted Joint Venture to allow it to
originate or acquire Receivables in the ordinary course, provided that
the Company or the Restricted Subsidiary has effective operational
control of such Permitted Joint Venture.
"Permitted Joint Venture" means any joint venture between the Company
or one of its Restricted Subsidiaries and any other Person, which is primarily
engaged in the business of originating, purchasing, brokering and marketing,
pooling, selling, securitizing or servicing medical equipment loan receivables
or medical receivables.
"Permitted Warehouse Debt" means all Warehouse Debt outstanding from
time to time; provided, however, that (i) the Warehouse Debt shall be deemed to
be Permitted Warehouse Debt only to the extent that the assets to which such
Warehouse Debt relates are expected by the Company to be permanently funded
through a securitization or sale transaction and (ii) such Warehouse Debt shall
be deemed to be Permitted Warehouse Debt only to the extent of the realizable
value of the Receivables to which such Warehouse Debt relates and that were not
originated or acquired by the Company more than 364 days prior to the date of
determination (such realizable value to be determined in good faith by the Board
of Directors of the Company) if that value is less than the amount of the
Warehouse Debt..
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock, whether now outstanding or issued
after the initial issuance of the Notes, and including, without limitation, all
classes and series of preferred or preference stock of such Person.
"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any Person means any and all Capital Stock of such
Person, other than Disqualified Stock.
"Receivables" means consumer and commercial loans, leases and
receivables purchased or originated by the Company or any Restricted Subsidiary
in the ordinary course of business; provided, however, that, for purposes of
determining the amount of a Receivable at any time, such amount shall be
determined in accordance with GAAP, consistently applied, as of the most recent
practicable date.
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"Subordinated Debt" means Debt of the Company that is subordinated
in right of payment to the Notes.
"Unrestricted Subsidiary" means (a) any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary in
accordance with Section 1015 and (b) any Subsidiary of an Unrestricted
Subsidiary.
"Warehouse Debt" means Debt incurred by the Company or a
Restricted Subsidiary under a Warehouse Facility. Warehouse Debt under
any Warehouse Facility shall be deemed to equal the principal amount of
such Debt or, if less, the book value of the Receivables pledged under
such Warehouse Facility to secure such Warehouse Debt.
"Warehouse Facility" means any funding arrangement with a
financial institution or other lender or purchaser a principal purpose
of which is to finance the purchase or origination of Receivables by
the Company or one or more of its Restricted Subsidiaries for the
purpose of pooling such Receivables prior to securitization or sale in
the ordinary course of business, including purchase and sale facilities
pursuant to which the Company or a Restricted Subsidiary sells
Receivables to a financial institution and retains a right of first
refusal upon the subsequent resale of such Receivables by such
financial institution.
ARTICLE THREE
ADDITIONAL COVENANTS
SECTION 301. For the benefit of the holders of all Notes, Article
Ten of the Indenture shall be amended by adding the following covenants:
SECTION 1007. Limitation on Debt.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create, issue, assume, guarantee or in any manner become
directly or indirectly liable for the payment of, or otherwise incur
(collectively, "incur"), any Debt (including Acquired Debt and the
issuance of Disqualified Stock), except that the Company may incur Debt
or issue Disqualified Stock if, on the date of such incurrence or
issuance and after giving effect thereto, the Consolidated Leverage
Ratio does not exceed 2.0 to 1.0.
Notwithstanding the foregoing, the Company may, and may
permit its Restricted Subsidiaries to, incur the following Debt
("Permitted Debt"):
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(i) Permitted Warehouse Debt of the Company or any Restricted
Subsidiary;
(ii) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date;
(iii) Debt owed by the Company to any Restricted Subsidiary or
owed by any Restricted Subsidiary to the Company or any other
Restricted Subsidiary (provided that such Debt is held by the Company
or such Restricted Subsidiary);
(iv) Debt represented by the Notes and any guarantees thereof by
Restricted Subsidiaries;
(v) Debt of the Company or any Restricted Subsidiary in respect
of Hedging Obligations incurred in the ordinary course of business;
(vi) either (A) Capitalized Lease Obligations of the Company or
any Restricted Subsidiary or (B) Debt under purchase money mortgages or
secured by purchase money security interests so long as (x) such Debt
is not secured by any property or assets of the Company or any
Restricted Subsidiary other than the property and assets so acquired
and (y) such Debt is created within 60 days of the acquisition of the
related property; provided that the aggregate amount of Debt under
clauses (A) and (B) does not exceed in the aggregate $5 million at any
one time outstanding;
(vii) Debt of the Company or any Restricted Subsidiary consisting
of guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of
assets, including, without limitation, shares of Capital Stock;
(viii) Acquired Debt of a Person, other than Debt incurred in
connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary or the acquisition of assets from such Person, as
the case may be, provided that the Company on a pro forma basis could
incur $1.00 of additional Debt (other than Permitted Debt) pursuant to
the first paragraph of this Section;
(ix) Debt of the Company, not permitted by any other clause of
this definition, in an aggregate principal amount not to exceed $20
million at any one time outstanding;
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(x) Debt incurred under one or more working capital facilities
in an amount not to exceed $10 million at any one time outstanding;
(xi) Debt of the Company or any Restricted Subsidiary, which Debt
is in the form of a guarantee and is incurred in connection with a
securitization or sale of Receivables; provided, that the Company has
concluded (as determined in good faith by the Board of Directors of the
Company) that the incurrence of such Debt is necessary to obtain an
investment grade rating for other Debt issued in connection with such
securitization or sale of Receivables; and
(xii) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of
any outstanding Debt, other than Debt incurred pursuant to clause (i),
(vi), (ix), (x) or (xi) of this definition, including any successive
refinancings thereof, so long as (A) any such new Debt is in a
principal amount that does not exceed the principal amount so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing, plus the amount of
the expenses of the Company incurred in connection with such
refinancing, (B) in the case of any refinancing of Subordinated Debt,
such new Debt is made subordinate to the Notes at least to the same
extent as the Debt being refinanced and (C) such refinancing Debt does
not have an Average Life less than the Average Life of the Debt being
refinanced and does not have a final scheduled maturity earlier than
the final scheduled maturity, or permit redemption at the option of the
holder earlier than the earliest date of redemption at the option of
the holder, of the Debt being refinanced.
SECTION 1008. Limitation on Restricted Payments.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take any of the following actions:
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any
Restricted Subsidiary (other than dividends or distributions payable
solely in Qualified Equity Interests and other than dividends or
distributions by a Restricted Subsidiary payable to the Company or
another Restricted Subsidiary);
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of the Company or
any
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Restricted Subsidiary, or any options, warrants or other rights to
acquire such shares of Capital Stock (other than any such Capital Stock
owned by the Company or any of its Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease
or otherwise acquire or retire for value, prior to any scheduled
principal payment, sinking fund payment or maturity, any Subordinated
Debt; and
(d) make any Investment (other than a Permitted Investment) in
any Person
(such payments or other actions described in (but not excluded from)
clauses (a) through (d) being referred to as "Restricted Payments"),
unless at the time of, and immediately after giving effect to, the
proposed Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing,
(ii) the Company could incur at least $1.00 of additional
Debt (other than Permitted Debt) pursuant to the first paragraph
of Section 1007 and
(iii) the aggregate amount of all Restricted Payments made
after the Closing Date does not exceed the sum of:
(A) 25% of the aggregate Consolidated Adjusted Net
Income of the Company during the period (taken as one
accounting period) from the first day of the Company's fiscal
quarter during which the Closing Date occurred to the last
day of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time
of such proposed Restricted Payment (or, if such aggregate
cumulative Consolidated Adjusted Net Income is a loss, minus
100% of such amount), plus
(B) the aggregate net proceeds including the fair
market value of property other than cash (as determined by
the Board of Directors, whose good faith determination shall
be conclusive), received by the Company after the initial
issuance of the Notes from the issuance or sale (other than
to a Subsidiary) of Qualified Equity Interests of the
Company; plus
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(C) the aggregate net proceeds including the fair
market value of property other than cash (as determined by
the Board of Directors, whose good faith determination shall
be conclusive), received by the Company after the initial
issuance of the Notes from the issuance or sale (other than
to a Restricted Subsidiary) of debt securities or
Disqualified Stock that have been converted into or exchanged
for Qualified Stock of the Company, together with the
aggregate net cash proceeds received by the Company at the
time of such conversion or exchange.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take the following actions, so long as (with respect to clauses
(e), (f) and (g) below) no Default or Event of Default has occurred and is
continuing or would occur:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at the declaration date such payment would not
have been prohibited by the foregoing provision;
(b) the repurchase, redemption or other acquisition or retirement
for value of any shares of Capital Stock of the Company, in exchange
for, or out of the net cash proceeds of a substantially concurrent
issuance and sale (other than to a Subsidiary) of Qualified Equity
Interests of the Company;
(c) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Debt in exchange for, or out
of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Subsidiary) of Qualified Equity Interests of the
Company;
(d) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Debt in exchange for, or out of
the net cash proceeds of a substantially concurrent issuance or sale
(other than to a Subsidiary) of, Subordinated Debt, so long as the
Company or a Restricted Subsidiary would be permitted to refinance such
original Subordinated Debt with such new Subordinated Debt pursuant to
clause (xii) of the definition of Permitted Debt;
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(e) the repurchase of any Subordinated Debt at a purchase price
not greater than 101% of the principal amount of such Subordinated Debt
in the event of a change of control in accordance with provisions
similar to Section 1009, provided that, prior to or simultaneously with
such repurchase, the Company has made the Change of Control Offer as
provided in Section 1009 with respect to the Notes and has repurchased
all Notes validly tendered for payment in connection with such Change
of Control Offer;
(f) loans or advances to officers, directors and employees of the
Company or any of its Restricted Subsidiaries made in the ordinary
course of business after the Closing Date in an amount not to exceed $1
million in the aggregate at any one time outstanding;
(g) Investments by the Company or a Restricted Subsidiary in
another Person made with, or out of the net cash proceeds of, a
substantially concurrent issuance and sale (other than to a Subsidiary)
of Qualified Stock of the Company; and
(h) the making of an Investment in a Permitted Joint Venture so
long as the aggregate amount of all such Investments pursuant to this
clause (h) made after the Closing Date does not exceed the difference
between (A) 25% of the aggregate Consolidated Adjusted Net Income
(without giving effect to clause (e) of the definition thereof) of the
Company during the period (taken as one accounting period) from the
first day of the Company's fiscal quarter during which the Closing Date
occurred to the last day of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such proposed Investment, minus (B) the aggregate amount of all
Restricted Payments made after the Closing Date in reliance on the
foregoing clause (iii)(A); provided, that, at the time of, and
immediately after giving effect to, the proposed Investment in a
Permitted Joint Venture pursuant to this clause (h), the Company could
incur at least $1.00 of additional Debt (other than Permitted Debt)
pursuant to the first paragraph of Section 1007.
The actions described in clauses (b), (c), (e), (f), (g) and (h)
of this paragraph shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph but shall reduce the amount that would
otherwise be available for Restricted Payments under clause (iii) of the first
paragraph of this Section and the actions described in clauses (a) and (d) of
this paragraph shall be Restricted Payments that shall be permitted to be taken
in accordance with this
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paragraph and shall not reduce the amount that would otherwise be available for
Restricted Payments under clause (iii) of the first paragraph of this Section.
For the purpose of making any calculations under this Indenture
(i) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the
Company shall be deemed to have made an Investment in an amount equal to the
fair market value of the net assets of such Restricted Subsidiary at the time of
such designation as determined by the Board of Directors of the Company, whose
good faith determination shall be conclusive, (ii) any property transferred to
or from an Unrestricted Subsidiary shall be valued at fair market value at the
time of such transfer, as determined by the Board of Directors of the Company,
whose good faith determination shall be conclusive and (iii) subject to the
foregoing, the amount of any Restricted Payment, if other than cash, shall be
determined by the Board of Directors of the Company, whose good faith
determination shall be conclusive.
If the aggregate amount of all Restricted Payments calculated
under the foregoing provision includes an Investment in an Unrestricted
Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision shall be reduced by the lesser of (x) the net asset value of such
Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial
amount of such Investment.
If an Investment resulted in the making of a Restricted Payment,
the aggregate amount of all Restricted Payments calculated under the foregoing
provision shall be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise), to the extent such net reduction is not included in the
Company's Consolidated Adjusted Net Income; provided that the total amount by
which the aggregate amount of all Restricted Payments may be reduced may not
exceed the lesser of (x) the cash proceeds received by the Company and its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
In computing Consolidated Adjusted Net Income of the Company under
the foregoing clause (iii)(A), (i) the Company may use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period and (ii) the Company shall
be permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment that, at the time of the making of such
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Restricted Payment, would in the good faith determination of the Company be
permitted under the requirements of this Indenture, such Restricted Payment
shall be deemed to have been made in compliance with this Indenture
notwithstanding any subsequent adjustments made in good faith to the Company's
financial statements affecting Consolidated Adjusted Net Income of the Company
for any period.
SECTION 1009. Purchase of Notes upon a Change of Control.
If a Change of Control occurs at any time, then each holder of
Notes shall have the right to require that the Company purchase such holder's
Notes, in whole or in part in integral multiples of $1,000, at a purchase price
in cash equal to 101% of the principal amount of such Notes, plus accrued and
unpaid interest, if any, to the date of purchase, pursuant to the offer
described below (the "Change of Control Offer") and the other procedures set
forth in this Indenture.
Within 30 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 Notes by first-class mail, postage prepaid, at its address
appearing in the Security Register, stating, among other things, (i) the
purchase price and the 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;
(ii) that any Note not tendered shall continue to accrue interest; (iii) that,
unless the Company defaults in the payment of the purchase price, any Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control purchase date; and (iv) certain
other procedures that a holder of Notes must follow to accept a Change of
Control Offer or to withdraw such acceptance.
The Company shall comply with the applicable tender offer rules
including Rule l4e-l under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create any restriction (other than restrictions existing under
Debt as in effect on the Closing Date or in refinancings of such Debt) that
would materially impair the ability of the Company to make a Change of Control
Offer to purchase the Notes or, if such Change of Control Offer is made, to pay
for the Notes tendered for purchase.
SECTION 1010. Limitation on Certain Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration
received by
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the Company or such Restricted Subsidiary for such Asset Sale is not
less than the fair market value of the assets sold (as determined by
the Board of Directors of the Company, whose good faith determination
shall be conclusive) and (ii) the consideration received by the Company
or the relevant Restricted Subsidiary in respect of such Asset Sale
consists of at least 85% cash or cash equivalents.
(b) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company may, at its option, within 12 months after such
Asset Sale, (i) apply all or a portion of such Net Cash Proceeds to the
repayment of senior Debt of the Company or a Restricted Subsidiary or
(ii) invest (or enter into a legally binding agreement to invest) all
or a portion of such Net Cash Proceeds in properties and assets to
replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that shall be used in businesses of
the Company or its Restricted Subsidiaries, as the case may be,
existing on the Closing Date, or in Permitted Joint Ventures. If any
such legally binding agreement to invest such Net Cash Proceeds is
terminated, the Company may, within 90 days of such termination or
within 12 months of such Asset Sale, whichever is later, invest such
Net Cash Proceeds as provided in clause (i) or (ii) (without regard to
the parenthetical contained in such clause (ii)) above. The amount of
such Net Cash Proceeds not so used as set forth above in this paragraph
(b) constitutes "Excess Proceeds".
(c) When the aggregate amount of Excess Proceeds exceeds $5
million the Company shall, within 30 days thereafter, make an offer to
purchase from all holders of Notes, on a pro rata basis, in accordance
with the procedures set forth in this Indenture, the maximum principal
amount (expressed as a multiple of $1,000) of Notes that may be
purchased with the Excess Proceeds, at a purchase price in cash equal
to 100% of the principal amount thereof, plus accrued interest, if any,
to the date such offer to purchase is consummated. To the extent that
the aggregate principal amount of Notes tendered pursuant to such offer
to purchase is less than the Excess Proceeds, the Company may use such
deficiency for general corporate purposes. If the aggregate principal
amount of Notes validly tendered and not withdrawn by holders thereof
exceeds the Excess Proceeds, the Notes to be purchased shall be
selected on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset to zero.
SECTION 1011. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction with, or for the
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benefit of, any Affiliate of the Company or any beneficial owner of 5% or more
of any class of the Capital Stock of the Company at any time outstanding
("Interested Persons"), unless (a) such transaction is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that could have been obtained in an arm's length transaction with third
parties who are not Interested Persons and (b) either (i) with respect to any
transaction or series of transactions involving aggregate payments in excess of
$1 million, but less than $5 million, the Company delivers an officers'
certificate to the Trustee certifying that such transaction or transactions
comply with clause (a) above or (ii) with respect to a transaction or series of
transactions involving aggregate payments equal to or greater than $5 million,
such transaction or transactions have been approved by the Board of Directors
(including a majority of the Disinterested Directors) of the Company or the
Company has obtained a written opinion from a nationally recognized investment
banking firm to the effect that such transaction or transactions are fair to the
Company or such Restricted Subsidiary from a financial point of view.
The foregoing covenant shall not restrict
(A) transactions among the Company and/or its Restricted
Subsidiaries;
(B) the Company from paying reasonable and customary regular
compensation and fees to directors of the Company or any Restricted
Subsidiary who are not employees of the Company or any Restricted
Subsidiary; and
(C) the application, directly or indirectly, of up to $5 million
of the net proceeds from the sale of the Notes to fund the Company's
Investment in a Permitted Joint Venture doing business in Latin
America.
SECTION 1012. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock, (b) pay any Debt owed to the Company or any other Restricted Subsidiary,
(c) make loans or advances to the Company or any other Restricted Subsidiary,
(d) transfer any of its properties or assets to the Company or any other
Restricted Subsidiary or (e) guarantee any Debt of
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the Company or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of:
(i) any agreement in effect on the Closing Date;
(ii) customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary;
(iii) the refinancing or successive refinancings of Debt incurred
under the agreements in effect on the Closing Date, so long as such
encumbrances or restrictions are no less favorable to the Company or
any Restricted Subsidiary than those contained in such original
agreement;
(iv) Warehouse Facilities and other credit facilities, provided,
however, that the terms and conditions of any such encumbrances or
restrictions are not materially more restrictive in the aggregate than
those contained in the revolving credit agreement with a syndicate of
banks and Fleet Bank, National Association, as agent, dated March 28,
1995, in effect on the Closing Date in the judgment of the Board of
Directors of the Company as evidenced by a resolution of the Board of
Directors of the Company and filed with the Trustee; or
(v) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired.
SECTION 1013. Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries.
The Company (a) shall not permit any Restricted Subsidiary to
issue any Capital Stock (other than to the Company or a Restricted Subsidiary)
and (b) shall not permit any Person (other than the Company or a Restricted
Subsidiary) to own any Capital Stock of any Restricted Subsidiary; provided,
however, that this Section shall not prohibit (i) the sale or other disposition
of all, but not less than all, of the issued and outstanding Capital Stock of a
Restricted Subsidiary owned by the Company and its Restricted Subsidiaries in
compliance with the other provisions of this Indenture or (ii) the ownership by
directors of director's qualifying shares or the ownership by foreign nationals
of Capital Stock of any Restricted Subsidiary, to the extent mandated by
applicable law.
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SECTION 1014. Limitation on Guarantees of Debt by Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary, directly
or indirectly, to guarantee, assume or in any other manner become liable for the
payment of any Debt of the Company or any Debt of any other Restricted
Subsidiary, unless (a) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture providing for a guarantee of payment of the
Notes by such Restricted Subsidiary and (b) with respect to any guarantee of
Subordinated Debt by a Restricted Subsidiary, any such guarantee is subordinated
to such Restricted Subsidiary's guarantee with respect to the Notes at least to
the same extent as such Subordinated Debt is subordinated to the Notes, provided
that the foregoing provision shall not be applicable to any guarantee by any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary.
Any guarantee by a Restricted Subsidiary of the Notes pursuant to
the preceding paragraph shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer to any Person not an Affiliate of the Company of all of the
Company's and the Restricted Subsidiaries' Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (ii) the release or
discharge of the guarantee that resulted in the creation of such guarantee of
the Notes, except a discharge or release by or as a result of payment under such
guarantee.
SECTION 1015. Unrestricted Subsidiaries.
(a) The Board of Directors of the Company may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to
be an Unrestricted Subsidiary so long as (i) neither the Company nor
any Restricted Subsidiary is directly or indirectly liable for any Debt
of such Subsidiary, (ii) no default with respect to any Debt of such
Subsidiary would permit (upon notice, lapse of time or otherwise) any
holder of any other Debt of the Company or any Restricted Subsidiary to
declare a default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity, (iii) any
Investment in such Subsidiary made as a result of designating such
Subsidiary an Unrestricted Subsidiary shall not violate the provisions
of Section 1008, (iv) neither the Company nor any Restricted Subsidiary
has a contract, agreement, arrangement, understanding or obligation of
any kind, whether written or oral, with such Subsidiary other than
those
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that might be obtained at the time from Persons who are not Affiliates
of the Company and (v) neither the Company nor any Restricted
Subsidiary has any obligation to subscribe for additional shares of
Capital Stock or other equity interest in such Subsidiary, or to
maintain or preserve such Subsidiary's financial condition or to cause
such Subsidiary to achieve certain levels of operating results.
Notwithstanding the foregoing, the Company may not designate DVI
Business Credit Corporation or DVI Financial Services Inc. as an
Unrestricted Subsidiary and may not sell, transfer or otherwise dispose
of any properties or assets of DVI Business Credit Corporation or DVI
Financial Services Inc. to an Unrestricted Subsidiary, other than in
the ordinary course of business.
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Debt by a Restricted
Subsidiary of any outstanding Debt of such Unrestricted Subsidiary and
such designation shall only be permitted if (i) such Debt is permitted
under Section 1007 and (ii) no Default or Event of Default shall have
occurred and be continuing following such designation.
SECTION 1016. Limitation on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind on or with respect to any of its property or assets,
including any shares of stock or indebtedness of any Restricted Subsidiary,
whether owned at the Closing Date or thereafter acquired, or any income, profits
or proceeds therefrom, or assign or otherwise convey any right to receive income
thereon, unless (a) in the case of any Lien securing Subordinated Debt, the
Notes are secured by a Lien on such property, assets or proceeds that is senior
in priority to such Lien and (b) in the case of any other Lien, the Notes are
equally and ratably secured with the obligation or liability secured by such
Lien.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, incur the following Liens ("Permitted Liens"):
(i) Liens on property or assets securing Permitted Warehouse Debt
of the Company or any Restricted Subsidiary, other than Liens on Excess
Spread Receivables related to such Permitted Warehouse Debt not created
in favor of the lenders under the related Warehouse Facility;
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(ii) Liens incurred in connection with a securitization or sale
of Receivables, other than Liens on Excess Spread Receivables related
to such securitization or sale transaction that were not created at the
time of such securitization or sale transaction;
(iii) Liens existing as of the Closing Date;
(iv) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Restricted Subsidiary;
(v) Liens securing the Notes;
(vi) Liens representing the interest or title of lessors under
Capitalized Lease Obligations or Liens securing purchase money
mortgages or purchase money security interests, so long as the
aggregate amount secured by such Liens does not exceed the amount
permitted by clause (vi) of the definition of "Permitted Debt";
(vii) Liens securing Acquired Debt created prior to (and not in
connection with or in contemplation of) the incurrence of such Debt by
the Company or any Restricted Subsidiary; provided that such Lien does
not extend to any property or assets of the Company or any Restricted
Subsidiary other than the property and assets acquired in connection
with the incurrence of such Acquired Debt;
(viii) Liens (other than on any Excess Spread Receivables)
securing obligations under Hedging Obligations permitted to be incurred
pursuant to clause (v) of the definition of "Permitted Debt";
(ix) statutory Liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business with respect to (A) amounts
not yet delinquent or (B) amounts being contested in good faith by
appropriate proceedings or (C) an aggregate amount at any one time not
in excess of $1 million;
(x) Liens for taxes, assessments, government charges or claims
that are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted;
(xi) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal
bonds,
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government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than
contracts for the payment of money);
(xii) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering in any material respect with
the business of the Company or any Restricted Subsidiary incurred in
the ordinary course of business;
(xiii) Liens arising by reason of any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any
appropriate legal proceedings that may have been duly initiated for the
review of such judgment, decree or order have not been finally
terminated or the period within which such proceedings may be initiated
has not expired;
(xiv) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof;
(xv) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(xvi) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses (i) through (xv);
provided that any such extension, renewal or replacement is no more
restrictive in any material respect than the Lien so extended, renewed
or replaced and does not extend to any additional property or assets.
SECTION 1017. Limitation on Investment Company Status.
The Company shall not take any action, or otherwise permit to
exist any circumstance, that would require the Company or any of its
Subsidiaries to register as an "investment company" under the Investment Company
Act of 1940, as amended.
SECTION 1018. Maintenance of Properties.
The Company shall cause all material properties owned by or leased
to it or any Restricted Subsidiary of the Company and necessary in the conduct
of its business or the business of such Restricted Subsidiary to be maintained
and kept in normal condition, repair and working order, ordinary wear and tear
excepted;
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provided that nothing in this Section shall prevent the Company or any
Restricted Subsidiary of the Company from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of the
Company or the Restricted Subsidiary concerned, or of any officer (or other
agent employed by the Company or any Restricted Subsidiary of the Company) of
the Company or such Restricted Subsidiary having managerial responsibility for
any such property, desirable in the conduct of the business of the Company or
any Restricted Subsidiary of the Company and if such discontinuance or disposal
is not adverse in any material respect to the Holders.
The Company shall provide or cause to be provided, for itself and
any Restricted Subsidiaries of the Company, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like properties in the same
general areas in which the Company or such Restricted Subsidiaries operate.
SECTION 1019. Provision of Financial Statements.
(a) The Company shall supply without cost to each Holder of the
Securities of any series, and file with the Trustee (if not otherwise
filed with the Trustee pursuant to Section 703) within 15 days after
the Company is required to file the same with the Commission, copies of
the annual reports and quarterly reports and of the information,
documents and other reports which the Company may be required to file
with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the
Securities Exchange Act of 1934.
(b) If the Company is not required to file with the Commission
such reports and other information referred to in Section 1012(a), the
Company shall furnish without cost to each Holder of the Securities and
file with the Trustee (i) within 140 days after the end of each fiscal
year, annual reports containing the information required to be
contained in Items 1, 2, 3, 6, 7, 8 and 9 of Form 10-K promulgated
under the Securities Exchange Act of 1934, or substantially the same
information required to be contained in comparable items of any
successor form, and (ii) within 75 days after the end of each of the
first three fiscal quarters of each fiscal year, quarterly reports
containing the information required to be contained in Form 10-Q
promulgated under the Securities Exchange Act of 1934, or substantially
the same information required to be contained in any successor form.
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SECTION 1020. Reports.
The Company shall be required to file on a timely basis with the
Commission, to the extent such filings are accepted by the Commission and
whether or not the Company has a class of securities registered under the
Exchange Act, the annual reports, quarterly reports and other documents that the
Company would be required to file if it were subject to Section 13 or 15(d) of
the Exchange Act. The Company shall also be required (a) to file with the
Trustee, and provide to each holder of Notes, without cost to such holder,
copies of such reports and documents within 15 days after the date on which the
Company files such reports and documents with the Commission or the date on
which the Company would be required to file such reports and documents if the
Company were so required and (b) if filing such reports and documents with the
Commission is not accepted by the Commission or is prohibited under the Exchange
Act, to supply at the Company's cost copies of such reports and documents to any
prospective holder of Notes promptly upon written request.
SECTION 1021. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1007 through 1016 and 1018 through
1020 with respect to Securities of any series if, before or after the time for
such compliance, the Holders of a majority in aggregate principal amount of all
Outstanding Securities of the series shall, by Act of such Holders, waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE FOUR
FURTHER AMENDMENT
SECTION 401. SECTION 1403 of the Indenture is deleted and replaced
by the following:
SECTION 1403. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be
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released from its obligations under Sections 1007 through 1016 and 1018 through
1020 and, if specified pursuant to Section 301, its obligations under any other
covenant, with respect to such Outstanding Securities and any related coupons on
and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any related
coupons shall thereafter be deemed not to be "Outstanding" for the purposes of
any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any related coupons, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 501(4) or Section 501(8) or otherwise, as the case may be, but, except
as specified above, the remainder of this Indenture and such Securities and any
related coupons shall be unaffected thereby.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 501. This First Supplemental Indenture shall be deemed to
be a contract made 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. The
terms and conditions of this First Supplemental Indenture shall be, and be
deemed to be, part of the terms and conditions of the Indenture for any and all
purposes applicable to the Notes, in accordance with the terms and provisions of
Section 901 of the Indenture. Other than as amended and supplemented by this
First Supplemental Indenture, the Indenture is in all respects ratified and
confirmed.
SECTION 502. The Trustee hereby accepts this First Supplemental
Indenture and agrees to perform the same upon the terms and conditions set forth
in the Indenture.
SECTION 503. This First Supplemental 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.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed all as of the day and year first
above written.
DVI, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
FIRST TRUST NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
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EXHIBIT A
FORM OF NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DVI, INC.
9 7/8% Senior Notes due 2004
CUSIP NO. ▇▇▇▇▇▇▇▇▇
No. 1 $ 100,000,000
DVI, Inc., a Delaware corporation (herein called the "Company",
which term includes any successor entity under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns the principal sum of ONE HUNDRED MILLION DOLLARS on February
1, 2004, at the office or agency of the Company referred to below, and to pay
interest thereon on August 1, 1997 and semiannually thereafter, on February 1
and August 1 in each year, from January 30, 1997 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 9 7/8% per annum, until the principal hereof is paid or duly
provided for, and (to the extent lawful) to pay on demand interest on any
overdue interest at the rate borne by the Securities from the date of the
Interest Payment Date on which such overdue interest becomes payable to the date
payment of such interest has been made or duly provided for. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall, as provided in such Indenture, be paid to the Person in whose name this
Security is registered at the close of business on the Regular Record Date for
such interest, which shall be the January 15 or July 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for, and interest on
such defaulted interest at the interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date
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for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Payment of the principal
of (and premium, if any) and interest on this Security shall be made at the
office or agency of the Company maintained for that purpose in The City of New
York, or at such other office or agency of the Company as may be maintained for
such purpose, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the address of the Person entitled thereto as such
address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
DVI, INC.
By: _______________________________
Attest:
________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By: ____________________________
Authorized Signatory
Dated: ___________________
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[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of
the Company designated as its 9 7/8% Senior Notes due 2004 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $100,000,000 which may be issued in
one or more series under an indenture (herein called the "Indenture") dated as
of January 27, 1997, between the Company and First Trust National Association,
trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture with respect to the series of which this Security is a part)
as supplemented by the First Supplemental Indenture dated as of January 30, 1997
between the Company and the Trustee (together the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities shall be redeemable at the election of the Company,
as a whole or from time to time in part, at any time on or after February 1,
2002, on or not less than 30 nor more than 60 days' prior notice at the
redemption prices (expressed as percentages of principal amount) set forth
below, together with accrued interest, if any, to the Redemption Date, if
redeemed during the 12-month period beginning on February 1 of the years
indicated below (subject to the right of Holders of record on the relevant
record date to receive interest due on an Interest Payment Date):
Redemption
Year Price
---- ----------
2002........................................ 102.821%
2003........................................ 101.411%
and thereafter at 100% of the principal amount, together with accrued interest,
if any, to the Redemption Date.
If less than all of the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee by such method as the Trustee deems
fair and appropriate.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
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The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of each series affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in aggregate principal amount of the Securities of
such series at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all the Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place, and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, shall be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form, without
coupons in denominations of $1,000 and any integral multiple thereof. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment in certain circumstances of a
sum sufficient to cover any tax or governmental charges that may be imposed in
connection therewith.
Prior to the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes,
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whether or not this Security be overdue, and neither the Company, the Trustee
nor any agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on the
face of this Security, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-...... Custodian.....
(Cust.) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
Act....................................
(State)
JT TEN - as joint tenants with right
of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: __________________ Signature:____________________________________________
(sign exactly as name appears on the other
side of this Security)
Signature guaranteed by: _________________________________