EXHIBIT (c)2
--------------------------------------------------------------------------------
ROTECH MEDICAL CORPORATION
AND
PNC BANK, KENTUCKY, INC.,
AS TRUSTEE
-----------------
SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 21, 1997
-----------------
$110,000,000
5 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003
--------------------------------------------------------------------------------
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
October 21, 1997 between ROTECH MEDICAL CORPORATION, a corporation duly
organized and existing under the laws of the State of Florida (herein called the
"COMPANY"), and PNC BANK, KENTUCKY, INC., a Kentucky banking corporation, as
Trustee (herein called the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has issued $110,000,000 in principal amount of its 5 1/4%
Convertible Subordinated Debentures due 2003 (herein called the "SECURITIES") on
June 1, 1996 as contemplated by the Indenture (the "INDENTURE"), dated as of
June 1, 1996, between the Company and the Trustee.
On July 6, 1997, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Integrated Health Services, Inc., a
Delaware corporation ("IHS"), and IHS Acquisition XXIV, Inc., a Florida
corporation that is wholly owned by IHS ("Merger Sub"), pursuant to which Merger
Sub will be merged with and into the Company (the "Merger") and the Company will
be the surviving corporation and a wholly owned subsidiary of IHS.
As a result of the Merger each issued and outstanding share of Common
Stock, par value $.0002 per share, of RoTech (the "RoTech Common Stock" and the
issued and outstanding shares thereof, the "RoTech Shares"), without any further
action by the holder thereof, shall be converted into the right to receive, and
become exchangeable for a merger consideration (the "Merger Consideration")
consisting of .5806 (the "Exchange Ratio") validly issued, fully paid and
nonassessable shares of Common Stock, $.001 par value, of IHS (the "IHS Common
Stock," shares thereof, "IHS Shares" and the IHS Shares to be issued pursuant
hereto, the "IHS Merger Shares"); provided however, that in lieu of issuing
certificates or scrip representing fractional shares of IHS Common Stock upon
the surrender for exchange of stock certificates representing shares of IHS
Common Stock, each holder of RoTech Shares exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of IHS
Common Stock (after taking into account all stock certificates representing
RoTech Shares delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of IHS
Common Stock multiplied by the average closing New York Stock Exchange price of
such stock for the thirty (30) trading day period ending on the date which is
two (2) trading days prior to the Effective Time.
Pursuant to Section 1311 of the Indenture, as a result of the Merger,
the Holder (such term and each other capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to such term in the
Indenture) of each Security then Outstanding shall have the right after the
effective time of the Merger (the "Effective Time"), during the period such
Security shall be convertible as specified in Section 1301 of the Indenture (the
"Conversion Period"), to convert such Security only into the kind and amount of
securities, cash and other property, if any, receivable upon
-2-
the occurrence of the Merger by a holder of the number of shares of RoTech
Common Stock into which such Security might have been converted immediately
prior to the Merger, assuming that such holder of RoTech Common Stock (i) is not
a Constituent Person, or an Affiliate of a Constituent Person, and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon the Merger (an "Unaffected
Person").
Pursuant to Section 1311 of the Indenture, as a result of the Merger,
the Company as the surviving entity of the Merger is required to execute and
deliver this Supplemental Indenture to the Trustee.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
EFFECT OF MERGER
SECTION 101. CONVERSION RIGHTS. Commencing at the Effective Time, during the
Conversion Period, if and to the extent that any Holder of any Security then
Outstanding (other than Unaffected Persons) would otherwise have been entitled
to convert such Security into RoTech Shares, such Security shall be convertible
into IHS Shares, and accordingly, Article Thirteen of the Indenture
automatically shall be deemed amended, effective as of the Effective Time, so
that all references therein to "Common Stock" shall thereafter be deemed to
refer to shares of IHS Common Stock, references therein to the "Company" in
Sections 1303 through and including 1312 shall be deemed to refer to IHS (unless
the context shall require otherwise), and the conversion price referred to
therein shall be $45.21 until further adjusted in accordance with Article
Thirteen of the Indenture as amended by this Supplemental Indenture.
SECTION 102 COMPLIANCE WITH SECTION 801 AND 903. Concurrently herewith, the
Company is delivering to the Trustee, an Officers' Certificate and Opinion of
Counsel from the Company's General Counsel, each stating that the Merger and
this Supplemental Indenture comply with Articles Eight and Nine of the Indenture
and all conditions precedent set forth in Section 801 and 903 of the Indenture
have been complied with.
ARTICLE TWO
MISCELLANEOUS
SECTION 201 NO OTHER AMENDMENTS. Except for the amendments expressly set forth
herein, the Indenture shall not be deemed to have been modified or amended and
shall remain in full force and effect.
-3-
SECTION 202 COUNTERPARTS. This instrument may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ROTECH MEDICAL
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President, Chief Operating Officer
Attest:
/s/ Xxxxxxx X. Xxxxxx XX
-----------------------------
Xxxxxxx X. Xxxxxx XX
Corporate Secretary
PNC BANK, KENTUCKY, INC.,
AS TRUSTEE
By: /s/
----------------------------------
Name:
----------------------------------
Title: Assistant Vice President
Attest:
/s/
-----------------------------
Name:________________________
Title:_______________________
-4-
STATE OF FLORIDA )
) ss.
COUNTY OF ORANGE )
On the 20th day of October, 1997, before me personally came Xxxxxxx X.
Xxxxxx, to me known who, being by me duly sworn, did depose and say that he is
President, Chief Operating Officer of RoTech Medical Corporation, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
/s/ M. Xxxxxxx Xxxxxx
-----------------------------------------
M. Xxxxxxx Xxxxxx
)
) ss.
)
On the day of , 1997, before me personally came Xxxx X.
Xxxxxxxx, to me known who, being by me duly sworn, did depose and say that he is
Assistant Vice President of PNC BANK, KENTUCKY, INC., a Kentucky banking
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
-----------------------------------------
-5-
