EXHIBIT T3C
MARINER HEALTH CARE, INC., as Issuer,
THE GUARANTORS (as defined herein), as Guarantors,
THE BANK OF NEW YORK, as Trustee
INDENTURE
Dated as of ____ __, 2002
$150,000,000
Second Priority Secured Notes due 2009
TABLE OF CONTENTS
PAGE
ARTICLE 1 Definitions and Incorporation By Reference..............................................................1
SECTION 1.1. Definitions..............................................................................1
SECTION 1.2. Other Definitions.......................................................................21
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.......................................21
SECTION 1.4. Rules of Construction...................................................................22
ARTICLE 2 The Senior Notes.......................................................................................22
SECTION 2.1. Dating; Incorporation of Form in Indenture..............................................22
SECTION 2.2. Execution and Authentication............................................................23
SECTION 2.3. Agents..................................................................................23
SECTION 2.4. Paying Agent to Hold Money in Trust.....................................................23
SECTION 2.5. Noteholder Lists........................................................................24
SECTION 2.6. Transfer and Exchange...................................................................24
SECTION 2.7. Replacement Senior Notes................................................................25
SECTION 2.8. Outstanding Senior Notes................................................................25
SECTION 2.9. Temporary Senior Notes..................................................................25
SECTION 2.10. Cancellation...........................................................................26
SECTION 2.11. Defaulted Interest.....................................................................26
SECTION 2.12. Deposit of Moneys......................................................................26
SECTION 2.13. CUSIP Number...........................................................................26
SECTION 2.14. Payments to Holders....................................................................27
SECTION 2.15. Book-Entry Provisions for Global Notes.................................................27
SECTION 2.16. Record Date............................................................................28
i
ARTICLE 3 Redemption.............................................................................................28
SECTION 3.1. Notices to Trustee......................................................................28
SECTION 3.2. Selection by Trustee of Senior Notes to Be Redeemed.....................................29
SECTION 3.3. Notice of Redemption....................................................................29
SECTION 3.4. Effect of Notice of Redemption..........................................................30
SECTION 3.5. Deposit of Redemption Price.............................................................30
SECTION 3.6. Senior Notes Redeemed in Part...........................................................30
SECTION 3.7. Optional Redemption.....................................................................30
ARTICLE 4 Covenants..............................................................................................31
SECTION 4.1. Payment of Senior Notes.................................................................31
SECTION 4.2. Reports.................................................................................31
SECTION 4.3. Waiver of Stay, Extension or Usury Laws.................................................31
SECTION 4.4. Compliance Certificate..................................................................32
SECTION 4.5. Taxes...................................................................................32
SECTION 4.6. Limitation on Additional Indebtedness...................................................32
SECTION 4.7. Limitation on Restricted Payments.......................................................33
SECTION 4.8. Limitation on Certain Asset Sales.......................................................35
SECTION 4.9. Limitation on Transactions with Affiliates..............................................38
SECTION 4.10. Limitations on Liens....................................................................38
SECTION 4.11. Limitations on Investments..............................................................38
SECTION 4.12. Future Subsidiary Guarantors............................................................38
SECTION 4.13. Designation of Subsidiaries and Unrestricted Subsidiaries...............................39
SECTION 4.14. Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries...........40
SECTION 4.15. Restriction on Sale and Issuance of Certain Subsidiary Equity Interests.................41
ii
SECTION 4.16. Limitation on Sale and Lease-Back Transactions.........................................41
SECTION 4.17. Line of Business.......................................................................41
SECTION 4.18. Limitation on Status as Investment Company.............................................41
SECTION 4.19. Corporate Existence....................................................................42
SECTION 4.20. Maintenance of Office or Agency........................................................42
SECTION 4.21. Maintenance of Insurance; Books and Records; Compliance with Laws......................42
SECTION 4.22. Further Assurances to the Trustee......................................................43
SECTION 4.23. Collateral Documents...................................................................43
SECTION 4.24. Subsidiary Guarantees..................................................................43
ARTICLE 5 Successor Corporation..................................................................................44
SECTION 5.1. Merger, Consolidation or Sale of Assets.................................................44
SECTION 5.2. Successor Person Substituted............................................................44
ARTICLE 6 Defaults and Remedies..................................................................................45
SECTION 6.1. Events of Default.......................................................................45
SECTION 6.2. Acceleration............................................................................46
SECTION 6.3. Other Remedies..........................................................................47
SECTION 6.4. Waiver of Defaults and Events of Default................................................47
SECTION 6.5. Control by Majority.....................................................................47
SECTION 6.6. Limitation on Suits.....................................................................48
SECTION 6.7. Rights of Holders to Receive Payment....................................................48
SECTION 6.8. Collection Suit by Trustee..............................................................48
SECTION 6.9. Trustee May File Proofs of Claim........................................................48
SECTION 6.10. Priorities.............................................................................49
SECTION 6.11. Undertaking for Costs..................................................................49
SECTION 6.12. Restoration of Rights and Remedies.....................................................49
iii
SECTION 6.13. Delay or Omission Not Waiver............................................................50
ARTICLE 7 Trustee................................................................................................50
SECTION 7.1. Duties of Trustee.......................................................................50
SECTION 7.2. Rights of Trustee.......................................................................51
SECTION 7.3. Individual Rights of Trustee............................................................52
SECTION 7.4. Trustee's Disclaimer....................................................................52
SECTION 7.5. Notice of Defaults......................................................................52
SECTION 7.6. Reports by Trustee to Holders...........................................................52
SECTION 7.7. Compensation and Indemnity..............................................................53
SECTION 7.8. Replacement of Trustee..................................................................54
SECTION 7.9. Successor Trustee by Consolidation, Merger or Conversion................................54
SECTION 7.10. Eligibility; Disqualification...........................................................55
SECTION 7.11. Preferential Collection of Claims Against Company.......................................55
SECTION 7.12. Paying Agents...........................................................................55
SECTION 7.13. Co-Trustee and Separate Trustees........................................................55
ARTICLE 8 Amendments, Supplements and Waivers....................................................................57
SECTION 8.1. Without Consent of Holders..............................................................57
SECTION 8.2. With Consent of Holders.................................................................58
SECTION 8.3. Compliance with Trust Indenture Act.....................................................59
SECTION 8.4. Revocation and Effect of Consents.......................................................59
SECTION 8.5. Notation on or Exchange of Senior Notes.................................................59
SECTION 8.6. Trustee to Sign Amendments, etc.........................................................59
ARTICLE 9 Discharge Of Indenture; Defeasance.....................................................................60
SECTION 9.1. Discharge of Indenture..................................................................60
SECTION 9.2. Legal Defeasance........................................................................60
iv
SECTION 9.3. Covenant Defeasance.....................................................................61
SECTION 9.4. Conditions to Legal Defeasance or Covenant Defeasance...................................61
SECTION 9.5. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions...............................................62
SECTION 9.6. Reinstatement...........................................................................63
SECTION 9.7. Moneys Held by Paying Agent.............................................................63
SECTION 9.8. Moneys Held by Trustee..................................................................63
SECTION 9.9. Senior Note Collateral..................................................................64
ARTICLE 10 Collateral And Security...............................................................................64
SECTION 10.1. Security................................................................................64
SECTION 10.2. Certificates, Opinions and Recording....................................................65
SECTION 10.3. Release of Collateral...................................................................66
SECTION 10.4. Protection of the Trust Estate..........................................................67
SECTION 10.5. Certificates of the Company.............................................................67
SECTION 10.6. Certificates of the Trustee.............................................................67
SECTION 10.7. Authorization of Actions to be Taken by the Trustee Under the Collateral Documents......68
SECTION 10.8. Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.........68
SECTION 10.9. Termination of Security Interest........................................................69
SECTION 10.10. Cooperation of Trustee..................................................................69
SECTION 10.11. Collateral Agent........................................................................69
SECTION 10.12. Intercreditor Agreement.................................................................69
ARTICLE 11 Guarantee of Senior Notes.............................................................................70
SECTION 11.1. Guarantee...............................................................................70
SECTION 11.2. Execution and Delivery of Guarantees....................................................71
v
SECTION 11.3. Limitation of Guarantee................................................................71
SECTION 11.4. Release of Guarantor...................................................................72
SECTION 11.5. Additional Guarantors..................................................................72
ARTICLE 12 Miscellaneous.........................................................................................72
SECTION 12.1. Trust Indenture Act Controls...........................................................72
SECTION 12.2. Notices................................................................................72
SECTION 12.3. Communications by Holders with Other Holders...........................................73
SECTION 12.4. Certificate and Opinion as to Conditions Precedent.....................................73
SECTION 12.5. Statements Required in Certificate and Opinion.........................................74
SECTION 12.6. When Treasury Senior Notes Disregarded.................................................74
SECTION 12.7. Rules by Trustee and Agents............................................................74
SECTION 12.8. Business Days; Legal Holidays..........................................................74
SECTION 12.9. GOVERNING LAW..........................................................................75
SECTION 12.10. No Adverse Interpretation of Other Agreements..........................................75
SECTION 12.11. No Recourse Against Others.............................................................75
SECTION 12.12. Successors.............................................................................75
SECTION 12.13. Multiple Counterparts..................................................................76
SECTION 12.14. Table of Contents, Headings, etc.......................................................76
SECTION 12.15. Separability...........................................................................76
EXHIBITS
Exhibit A Form of Guarantee Notation
Exhibit B Form of Senior Note
Exhibit C Form of Global Note Legend
Exhibit D Form of Supplemental Indenture
vi
SCHEDULE 1
vii
Reconciliation and Tie between Trust
Indenture Act of 1939 and Indenture, dated
as of _____ __, 2002
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
Section 310(a)(1)............................................................................... 7.10
(a)(2)............................................................................ 7.10
(a)(3)............................................................................ 7.13
(a)(4)............................................................................ N.A.
(b)............................................................................... 7.8; 7.10
(b)(1)............................................................................ 7.10
(c)............................................................................... N.A.
Section 311(a).................................................................................. 7.11
(b)............................................................................... 7.11
(c)............................................................................... N.A.
Section 312(a).................................................................................. 2.5
(b)............................................................................... 12.3
(c)............................................................................... 12.3
Section 313(a).................................................................................. 7.6
(b)............................................................................... 10.3
(b)(1)............................................................................ 10.2
(b)(2)............................................................................ 10.2; 7.6
(c)............................................................................... 7.6
(d)............................................................................... 7.6
Section 314(a).................................................................................. 4.2; 4.4; 12.5
(a)(4)............................................................................ 10.2
(b)............................................................................... 10.2
(c)............................................................................... 12.4
(c)(1)............................................................................ 12.4; 12.5
(c)(2)............................................................................ 12.4; 12.5
(c)(3)............................................................................ 12.4; 12.5
(d)............................................................................... 10.2
(e)............................................................................... 10.2; 12.5
(f)............................................................................... N.A.
Section 315(a).................................................................................. 7.1; 7.2
(b)............................................................................... 7.5
(c)............................................................................... 7.1
(d)............................................................................... 6.5; 7.1; 7.2
(e)............................................................................... 6.11
Section 316(a)(last sentence)................................................................... 12.6
(a)(1)(A)......................................................................... 6.5
(a)(1)(B)......................................................................... 6.4
(a)(2)............................................................................ N.A.
(b)............................................................................... 6.7; 8.4
(c)............................................................................... 8.4; 2.16
viii
Section 317(a)(1)............................................................................... 6.8
(a)(2)............................................................................ 6.9
(b)............................................................................... 7.12
Section 318(a).................................................................................. 12.1
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be part of the Indenture.
Attention should also be directed to TIA Section 318(c), which provides
that the provisions of TIA Sections 310 to and including 317 of the TIA are a
part of and govern every qualified indenture, whether or not physically
contained therein.
ix
THIS INDENTURE is dated as of __________, 2002 (the "Effective Date"),
among MARINER HEALTH CARE, INC., a Delaware corporation formerly known as
Mariner Post-Acute Network, Inc., as Issuer (the "Company"), the GUARANTORS
listed on Schedule 1 hereto and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
The Company and the Guarantors have duly authorized the execution and
delivery of this Indenture to provide for the issuance of the Second Priority
Secured Notes due 2009 to be issued as provided for in this Indenture.
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as hereinafter defined) of the
Second Priority Secured Notes due 2009, which are unconditionally guaranteed by
the Guarantors.
ARTICLE 1
Definitions and Incorporation By Reference
SECTION 1.1. Definitions. All terms defined in the Plan of
Reorganization shall have such defined meanings when used herein or in any
Exhibit hereto unless otherwise defined herein or therein. As used in this
Agreement, the following terms shall have the following meanings:
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Subsidiary or assumed in connection with an Asset
Acquisition from such Person.
"Acquisition Indebtedness" means Indebtedness incurred by the Company
or by a Subsidiary after the Issue Date the proceeds of which are used for an
Asset Acquisition.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser
of (x) the amount by which the fair value of the property of such Guarantor
exceeds the total amount of liabilities (after giving effect to all fixed and
contingent liabilities (including, without limitation, any guarantees of
Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor
at such date and (y) the amount by which the present fair salable value of the
assets of such Guarantor at such date exceeds the total amount of its debts
(after giving effect to all fixed and contingent liabilities (including, without
limitation, any guarantees of Indebtedness), and after giving effect to any
collection from any Subsidiary of such Guarantor in respect of the obligations
of such Subsidiary under the Guarantee), but excluding liabilities under the
Guarantee.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.
2
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company, or shall be merged with or into the
Company or any Subsidiary of the Company, (b) the acquisition by the Company or
any Subsidiary of the Company of the assets of any Person (other than a
Subsidiary of the Company) which constitute all or substantially all of the
assets of such Person or (c) the acquisition by the Company or any Subsidiary of
the Company of any division or line of business of any Person (other than a
Subsidiary of the Company).
"Asset Sale" means the direct or indirect sale, transfer, issuance,
conveyance, lease (other than operating leases entered into in the ordinary
course of business pursuant to ordinary business terms, it being understood that
the lease of a healthcare facility shall not be considered to be in the ordinary
course but that leases of portions of a healthcare facility to service providers
shall be considered to be in the ordinary course), assignment or other
disposition (including, without limitation, by Condemnation) and any merger or
consolidation of any Subsidiary of the Company with or into another Person
(other than the Company or any Wholly-Owned Subsidiary of the Company) in any
single transaction or series of related transactions (separate Condemnation
proceedings to each be considered a single transaction but not to be considered
together as a series of related transactions) involving property or assets with
a fair market value in excess of $500,000 of (a) any Equity Interest in any
Subsidiary, (b) real property owned by the Company or any Subsidiary thereof, or
a division, line of business or healthcare facility or comparable business
segment of the Company or any Subsidiary thereof or (c) other property, assets
or rights (including, without limitation, leasehold rights) of the Company, any
Subsidiary thereof or any division, line of business or healthcare facility of
the Company or any Subsidiary thereof; provided, however, that Asset Sales shall
not include (i) sales, issuances, leases, conveyances, transfers, assignments or
other dispositions to the Company or to a Subsidiary thereof or to any other
Person if after giving effect to such sale, issuance, lease, conveyance,
transfer, assignment or other disposition such other Person becomes a
Wholly-Owned Subsidiary of the Company, (ii) transactions complying with Section
5.1, (iii) sales, transfers, issuances, conveyances, leases, assignments or
other dispositions to the Company or any Wholly-Owned Subsidiary of the Company,
and (iv) sales, leases, conveyances, transfers or other dispositions in any 12
month period the fair market value of which does not, in the aggregate, exceed
$5 million.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
or Temporary Cash Investments received by the Company or any Subsidiary thereof
from such Asset Sale, after (a) provision for all income or other taxes measured
by or resulting from such Asset Sale, (b) payment of all brokerage commissions,
underwriting and other fees and expenses related to such Asset Sale, (c)
provision for minority interest holders in any Subsidiary as a result of such
Asset Sale, (d) payments made to retire Indebtedness secured by the assets
subject to such Asset Sale, (e) payments made to the Trustee, the Collateral
Agent and the agent of the holders of the Senior
3
Indebtedness under the Intercreditor Agreement and (f) deduction of appropriate
amounts to be provided by the Company or a Subsidiary thereof as a reserve, in
accordance with GAAP, against any liabilities associated with the assets sold or
disposed of in such Asset Sale and retained by the Company or a Subsidiary
thereof after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with the assets
sold or disposed of in such Asset Sale, and (ii) promissory notes and other
non-cash consideration received by the Company or any Subsidiary thereof from
such Asset Sale or other disposition upon the liquidation or conversion of such
notes or non-cash consideration into cash.
"Attributable Indebtedness" when used with respect to any Sale and
Lease-Back Transaction [or an operating lease with respect to a long-term care
facility] means, as at the time of determination, the present value (discounted
at a rate equivalent to the interest rate implicit in the lease, compounded on a
semi-annual basis) of the total obligations of the lessee for rental payments
(after excluding all amounts required to be paid on account of maintenance and
repairs, insurance, taxes, utilities and other similar expenses payable by the
lessee pursuant to the terms of the lease) during the remaining term of the
lease included in any such Sale and Lease-Back Transaction [such operating
lease] or until the earliest date on which the lessee may terminate such lease
without penalty or upon payment of a penalty (in which case the rental payments
shall include such penalty); provided, that the Attributable Indebtedness with
respect to a Sale and Lease-Back Transaction shall be no less than the fair
market value (as determined reasonably and in good faith by the Board of
Directors of the Person incurring the Attributable Indebtedness) of the property
subject to such Sale and Lease-Back Transaction.
"Bankruptcy Court" means, in the case of the Company and its
Wholly-Owned Debtor Subsidiaries, the United States Bankruptcy Court for the
District of Delaware, in which the Cases were filed.
"Board of Directors" means, as to any Person, the board of directors or
any duly authorized committee thereof of such Person or, if such Person is a
partnership (or other non-corporate Person), of the managing general partner or
partners (or Persons serving an analogous function) of such Person.
"Board Resolution" means, as to any Person, a copy of a resolution
certified pursuant to an Officers' Certificate to have been duly adopted by the
Board of Directors of such Person, and to be in full force and effect, and, if
required hereunder, delivered to the Trustee.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cases" means, collectively, the cases under chapter 11 of the United
States Bankruptcy Code commenced by the Company and substantially all of its
Subsidiaries, and by Mariner Health Group, Inc. and substantially all of its
Wholly-Owned Subsidiaries, in the Bankruptcy Court on January 18, 2000.
4
"Casualty" with respect to any Collateral, means loss of, damage to or
destruction of all or any part of such Collateral.
"Collateral" shall have the meaning assigned to it on the date hereof
in the Credit Agreement.
"Collateral Agent" means General Electric Capital Corporation as joint
collateral agent under the Intercreditor Agreement, and its successors.
"Collateral Documents" shall have the meaning assigned to it on the
date hereof in the Credit Agreement.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 of this
Indenture and thereafter means the successor.
"Company Request" means any written request signed in the name of the
Company by any two of the following: the Chief Executive Officer; the President;
any Vice President; the Chief Financial Officer; the Treasurer; or the Secretary
or any Assistant Secretary (but not both the Secretary and any Assistant
Secretary) of the Company.
"Condemnation" means any taking of the Collateral or any part thereof,
in or by Condemnation, expropriation or similar proceeding, eminent domain
proceedings, seizure or forfeiture, pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of the
Collateral, or any part thereof, by a governmental authority.
"Condemnation Proceeds" means any awards, proceeds, payment or other
compensation arising out of a Condemnation less any and all payments made to the
Trustee, the Collateral Agent and the agent of the holders of the Senior
Indebtedness under the Credit Facility.
"Consolidated Cash Flow Available for Fixed Charges" means, with
respect to any Person for any period, on a consolidated basis in accordance with
GAAP, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (A) (i) Consolidated Net Income, (ii) Consolidated
Non-cash Charges, (iii) Consolidated Interest Expense, (iv) Consolidated Income
Tax Expense, and (v) one-third of Consolidated Rental Payments, less (B) any
non-cash items increasing Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means with respect to any
Person, the ratio of the aggregate amount of Consolidated Cash Flow Available
for Fixed Charges of such Person for the four full fiscal quarters immediately
preceding the date of the transaction (the "Transaction Date") giving rise to
the need to calculate the Consolidated Fixed Charge Coverage Ratio (such four
full fiscal quarter period being referred to herein as the "Four Quarter
Period") to the aggregate amount of Consolidated Fixed Charges of such Person
for the Four Quarter Period. In addition to and without limitation of the
foregoing, for purposes of this definition, "Consolidated Cash Flow Available
for Fixed Charges" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation to,
without duplication, (a) the incurrence of any Indebtedness of such Person or
any of its Subsidiaries (and the application of the net proceeds thereof) during
the period commencing on
5
the first day of the Four Quarter Period to and including the Transaction Date
(the "Reference Period"), including, without limitation, the incurrence of the
Indebtedness giving rise to the need to make such calculation (and the
application of the net proceeds thereof), as if such incurrence (and
application) occurred on the first day of the Four Quarter Period (it being
understood that with respect to Indebtedness incurred under a revolving facility
used primarily to finance working capital, the average daily principal amount
outstanding during the Reference Period shall be deemed to be the amount
incurred during the Reference Period), and (b) any Asset Sales or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of such Person or one of its
Subsidiaries (including any Person who becomes a Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness) occurring during the Four Quarter Period, as if such Asset Sale or
Asset Acquisition occurred on the first day of the Four Quarter Period.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (i) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; and (ii) if interest on Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period. In calculating the Consolidated
Fixed Charge Coverage Ratio and giving pro forma effect to the incurrence of
Indebtedness during a Reference Period, pro forma effect shall be given to use
of proceeds thereof to permanently repay or retire Indebtedness. If such Person
or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, for purposes of determining the "Consolidated Fixed Charge
Coverage Ratio," effect shall be given to the incurrence of such guaranteed
Indebtedness as if such Person or such Subsidiary had directly incurred or
otherwise assumed such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication, the amounts for such period of (i)
Consolidated Interest Expense, (ii) the product of (a) the aggregate amount of
dividends and other distributions paid in cash during such period in respect of
Disqualified Equity Interests of such Person and its Subsidiaries on a
consolidated basis and (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 income tax rate of such Person, expressed as a decimal, (iii)
one-third of Consolidated Rental Payments, and (iv) the aggregate of all
mandatory scheduled payments, prepayments and sinking fund payments with respect
to principal paid or accrued by such Person in respect of Indebtedness,
including payments in the nature of principal under Capitalized Lease
Obligations.
"Consolidated Income Tax Expense" means, with respect to any Person for
any period, the provision for federal, state, local and foreign income taxes of
such Person and its Subsidiaries for each period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person, on a
consolidated basis in accordance with GAAP, for any period, the sum of, without
duplication, (a) the aggregate amount of interest which, in conformity with
GAAP, would be set forth opposite the caption "interest expense" or any like
6
caption on an income statement for such Person and its Subsidiaries on a
consolidated basis, (b) imputed interest included in Capitalized Lease
Obligations, (c) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (d) the net
costs associated with Interest Rate Agreements, (e) amortization of other
financing fees and expenses, (f) the interest portion of any deferred payment
obligation, (g) amortization of discount or premium, if any, (h) all other
non-cash interest expense (other than interest amortized to cost of sales), (i)
the interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP and (j) all
interest incurred or paid under any guarantee of Indebtedness (including a
guarantee of principal, interest or any combination thereof) of any Person.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP, plus
the amount of any dividends or distributions received by such Person from
Unrestricted Subsidiaries; provided, however, that (a) the Net Income of any
Person (the "other Person") in which the Person in question or any of its
Subsidiaries has less than a 100% interest (which interest does not cause the
net income of such other Person to be consolidated into the net income of the
Person in question in accordance with GAAP) shall be included only to the extent
of the amount of dividends or distributions paid to the Person in question or
its Subsidiaries, (b) the Net Income of any Subsidiary of the Person in question
that is incorporated in a jurisdiction other than the United States, or a state
or territory thereof, shall be included only to the extent of the amount of
dividends or distributions paid to the Person in question or its Subsidiaries,
(c) the Net Income of any Subsidiary of the Person in question that is subject
to any restriction or limitation (whether by terms of its charter, agreement or
applicable law) on the payment of dividends or the making of other distributions
shall be excluded to the extent such restriction or limitation would prevent
such Subsidiary from being able to pay dividends or make other distributions out
of its Net Income, (d)(i) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(ii) any net gain or loss resulting from an Asset Sale by the Person in question
or any of its Subsidiaries other than in the ordinary course of business shall
be excluded, (e) extraordinary gains and losses (including any related tax
effects) shall be excluded and (f) the cumulative effect of changes in
accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person at any date,
the consolidated stockholders' equity of such Person less the amount of such
stockholders' equity attributable to Disqualified Equity Interests of such
Person and its Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Subsidiaries reducing Consolidated Net Income of such
Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such charges constituting an
extraordinary item or loss or any such charge which required an accrual of or a
reserve for cash charges for any future period).
7
"Consolidated Rental Payments" of any Person means, for any period, the
aggregate rental obligations of such Person and its consolidated Subsidiaries
(not including taxes, utilities, insurance, maintenance and repairs and other
similar expenses that the lessee is obligated to pay under the terms of the
relevant leases), determined on a consolidated basis in accordance with GAAP,
payable in respect of such period (net of income from subleases thereof, not
including taxes, utilities, insurance, maintenance and repairs and other similar
expenses that the sublessee is obligated to pay under the terms of such
sublease), whether or not such obligations are reflected as liabilities or
commitments on a consolidated balance sheet of such Person and its Subsidiaries
or in the notes thereto, excluding, however, in any event, (i) that portion of
Consolidated Interest Expense of such Person representing payments by such
Person or any of its consolidated Subsidiaries in respect of Capitalized Lease
Obligations (net of payments to such Person or any of its consolidated
Subsidiaries under subleases qualifying as capitalized lease subleases to the
extent that such payments would be deducted in determining Consolidated Interest
Expense) and (ii) the aggregate amount of amortization of obligations of such
Person and its consolidated Subsidiaries in respect of such Capitalized Lease
Obligations for such period (net of payments to such Person or any of its
consolidated Subsidiaries and subleases qualifying as capitalized lease
subleases to the extent that such payments could be deducted in determining such
amortization amount).
"Consolidated Total Assets" of any person means the consolidated total
assets of such Person and its consolidated Subsidiaries, as set forth on the
most recent consolidated balance sheet of such Person and its consolidated
Subsidiaries determined in accordance with GAAP.
"Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the dated hereof is located at 000 Xxxxxxx Xxxxxx, Xxxxx 21 West, New
York, New York 10286, Attention: Corporate Trust Department, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as such successor Trustee may designate from time
to time by notice by notice to the Holders and the Company).
"Credit Agreement" means that certain Credit and Guaranty Agreement by
and among the Company, the Guarantors, the lenders party thereto, Xxxxxxx Sachs
Credit Partners L.P., and UBS AG, Stamford Branch as Joint Lead Arrangers,
Xxxxxxx Xxxxx Credit Partners L.P. as Syndication Agent, General Electric
Capital Corporation as Collateral Agent and Documentation Agent and UBS AG,
Stamford Branch as Administrative Agent, and their respective successors, as
amended, amended and restated or otherwise modified from time to time.
"Credit Facility" means (i) the Credit Agreement; (ii) any and all
agreements, instruments and documents executed or delivered pursuant to or in
connection with such Credit Agreement; and (iii) any and all credit agreements,
loan agreements, note purchase agreements, indentures or other agreements,
documents or instruments refinancing, refunding or otherwise replacing, in whole
or in part, the Credit Agreement or any other agreement deemed a Credit Facility
under clause (ii) hereof, whether or not with the same agent, trustee,
representative, lenders or holders, regardless of whether the Credit Facility or
any portion thereof was outstanding or in effect at the time of such
restatement, renewal, extension, restructuring, supplement or modification.
Without limiting the generality of the foregoing, the term "Credit Facility"
shall include any amendment,
8
restatement, renewal, extension, restructuring, supplement or modification to
any Credit Facility and all refundings, refinancings and replacements of any
Credit Facility, in whole or in part, including any agreement (w) extending the
maturity of any Indebtedness incurred thereunder or contemplated thereby, (x)
adding or deleting borrowers or guarantors thereunder, provided that the
addition of such borrower or guarantor would not be prohibited by this
Indenture, (y) increasing the amount for Indebtedness incurred thereunder or
available to be borrowed thereunder, provided such increase is permitted to be
incurred under this Indenture, or (z) otherwise altering the terms and
conditions thereof in a manner not prohibited by this Indenture.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values and not for the purpose of
speculation.
"Default" means any event that is, or after notice or passage of time
of notice or both would be, an Event of Default.
"Depository" means, with respect to the Senior Notes issued in the form
of one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"Designated Facility" means any nursing facility, assisted and
independent living center or other asset of the Company designated as a
Designated Facility pursuant to an Officers' Certificate certifying that such
facility had negative operating income based on the financial statements of such
facility for the previous fiscal year.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by the Company or one of its Subsidiaries in
connection with an Asset Sale, including the cancellation of any Indebtedness,
that is so designated as Designated Noncash Consideration pursuant to an
Officers' Certificate, setting forth the basis of such valuation, or, in the
case of the cancellation of any Indebtedness, the principal amount of such
cancelled Indebtedness, executed by an Officer of the Company.
"Disqualified Equity Interests" means any Equity Interest of the
Company or any of its Subsidiaries which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is subject
to mandatory redemption, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date of the Senior Notes, for cash or securities
constituting Indebtedness. Without limitation of the foregoing, Disqualified
Equity Interests shall also be deemed to include any Preferred Equity Interests
of the Company or a Subsidiary of the Company with respect to which, under the
terms of such Preferred Equity Interests, by agreement or otherwise, the Company
or such Subsidiary is obligated to pay current dividends or distributions in
cash during the period prior to the Maturity Date.
"Equity Interests" means, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other
9
participation, right or other interests in the nature of an equity interest in
such Person or any option, warrant or other security convertible into or
exchangeable for any of the foregoing.
"Fair market value" or "fair value" means, with respect to any assets
or property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a fully informed, willing
and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction, all as reasonably determined by a majority of the
Board of Directors acting in good faith, such determination to be evidenced by a
Board Resolution delivered to the Trustee.
"Final Decree" means with respect to the Company and the Guarantors
which on the Issue Date are the subject of the Cases, an order entered in the
Cases by the Bankruptcy Court closing the Cases.
"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States from time to time.
"Global Note" means a Senior Note evidencing all or a part of the
Senior Notes issued to and registered in the name of the Depository and bearing
the Global Note Legend prescribed in Exhibit C.
"Global Note Legend" means the legend set forth in Exhibit C, which is
required to be placed on all Global Notes issued under this Indenture.
"Guarantee" means, as the context may require, individually, a
guarantee, or collectively, any and all guarantees, of the Obligations of the
Company with respect to the Senior Notes by each Guarantor pursuant to the terms
of Article 11 hereof, substantially in the form set forth as part of Exhibit A.
"Guarantor" means each of the Wholly-Owned Debtor Subsidiaries of the
Company on the Issue Date other than the PHCMI Debtors, and any other Subsidiary
that subsequently guarantees the Senior Notes pursuant to Section 4.24.
"Health Care Facility" means any facility owned, leased, operated or
managed by the Company which provides any level of geriatric care, home care,
medical care (including, without limitation, sub-acute care), assisted living or
rehabilitative services, whether licensed as a skilled nursing facility,
intermediate care facility, personal care facility, out-patient clinic or
hospital (including, without limitation, any long-term acute care hospital) or
any products or services reasonably related thereto.
"Healthcare Related Business" means any business conducted by the
Company and its Subsidiaries as providers of post-acute health care services as
of the Issue Date and any and all healthcare service businesses that are related
thereto including the following principal areas: (a) inpatient services at
skilled nursing and assisted living facilities, (b) long-term acute-care
hospitals and (c) pharmaceutical product distribution and services acquired in
relation to any other Healthcare Related Business; provided, however, that the
Company shall use commercially reasonable efforts to divest itself of such
pharmaceutical product distribution and services within one year from the date
on which it is acquired.
10
"Holder" or "Noteholder" means the Person in whose name a Senior Note
is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become, directly or indirectly, liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "incurrence," "incurred," "incurable," and
"incurring" shall have meanings correlative to the foregoing). Any Indebtedness
or Equity Interests of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be incurred by such Person at the time it becomes a Subsidiary.
Indebtedness consisting of reimbursement obligations in respect of a letter of
credit will be deemed to be incurred when the letter of credit is issued or
renewed.
"Indebtedness" means (without duplication), with respect to any Person,
any indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
property (excluding, without limitation, any balances that constitute accounts
payable or trade payables) and shall also include, to the extent not otherwise
included, (i) any Capitalized Lease Obligations, (ii) obligations secured by a
Lien to which the property or assets owned or held by such Person is subject,
whether or not the obligation or obligations secured thereby shall have been
assumed, (iii) all Indebtedness of others of the type described in the other
clauses of this definition (including all dividends of other Persons) the
payment of which is guaranteed, directly or indirectly, by such Person or that
is otherwise its legal liability or which such Person has agreed to purchase or
repurchase or in respect of which such Person has agreed contingently to supply
or advance funds (whether or not such items would appear upon the balance sheet
of the guarantor), (iv) all obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transaction, (v)
Disqualified Equity Interests, (vi) obligations of any such Person under any
Interest Rate Agreement applicable to any of the foregoing and (vii)
Attributable Indebtedness. 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, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation;
provided, however, that (1) the amount outstanding at any time of any
Indebtedness issued with original issue discount is the principal amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP, and (ii) Indebtedness shall not include any liability for federal, state,
local or other taxes. Notwithstanding any other provision of the foregoing
definition, any trade payable arising from the purchase of goods or materials or
for services obtained in the ordinary course of business shall not be deemed to
be "Indebtedness" of the Company or any Subsidiaries for purposes of this
definition. Furthermore, guarantees of, or obligations with respect to letters
of credit supporting, Indebtedness otherwise included in the determination of
such amount shall not also be included.
"Indenture" means this Indenture as amended, restated or supplemented
from time to time.
11
"Insurance Proceeds" means any payment, proceeds or other amounts
received at any time under any insurance policy as compensation in respect of a
Casualty, less any and all payments made to the Trustee, the Collateral Agent
and the agent of the holders of the Senior Indebtedness under the Intercreditor
Agreement, provided that business interruption insurance proceeds shall not
constitute Insurance Proceeds.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of the date hereof by and among the agent under the Credit Agreement,
the Collateral Agent and the Trustee, and their respective successors, as
amended, amended and restated or otherwise modified from time to time.
"Interest" when used with respect to any Senior Note, means the amount
of all interest accruing on such Senior Note, including all interest accruing
subsequent to the occurrence of any events specified in Sections 6.1(7) and (8)
or which would have accrued but for any such event.
"Interest Payment Date" means each ________, _______, _________,
_________ of each year, commencing ________, 2002.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investment" means, with respect to any Person, directly or indirectly,
(i) any advance, account receivable (other than an account receivable arising in
the ordinary course of business, including accounts receivable arising in the
ordinary course of business and acquired as part of the assets acquired by the
Company in connection with an acquisition of assets which is otherwise permitted
by the terms of this Indenture), loan or capital contribution to any other
Person (by means of transfers of property to others, payments for property or
services for the account or use of others or otherwise), (ii) the purchase of
any stock, bonds, notes, debentures, partnership or joint venture interests or
other securities of any other Person, (iii) the acquisition, by purchase or
otherwise, of all or substantially all of the business or stock or other
evidence of beneficial ownership of, any other Person, (iv) the guarantee or
assumption of the Indebtedness of any other Person (except for an assumption of
Indebtedness for which the assuming Person receives consideration with a fair
market value at least equal to the principal amount of the Indebtedness
assumed), (v) the designation of a Subsidiary as an Unrestricted Subsidiary and
(vi) all other items that would be classified as investments on a balance sheet
of such Person prepared in accordance with GAAP. Investments shall exclude
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Investor Notes" shall have the meaning assigned to it in the Plan of
Reorganization.
"Issue Date" means the date on which the Senior Notes are issued, which
shall be the effective date of the Plan of Reorganization.
"Lien" means, with respect to any property or assets of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets
12
(including, without limitation, any Capitalized Lease Obligation, conditional
sales, or other title retention agreement having substantially the same economic
effect as any of the foregoing).
"Loss Event" means a Condemnation or Casualty involving an actual or
constructive total loss or agreed or compromised actual or constructive total
loss of all or substantially all of any Property constituting Collateral, except
where the Company reasonably concludes that Restoration of such Property can be
made in accordance with this Indenture and elects to do so in an Officers'
Certificate delivered to the Trustee within 90 days of the relevant Condemnation
or Casualty.
"Maturity Date" means _______________, 2009.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person determined in accordance with GAAP.
"Net Investments" means the excess of (i) the aggregate of all
Investments made by the Company or a Subsidiary thereof on or after the Issue
Date (in the case of an Investment made other than in cash, the amount shall be
the fair market value of such Investment) over (ii) the sum of (A) the aggregate
amount returned in cash on such Investments whether through interest payments,
principal payments, dividends or other distributions, (B) the net cash proceeds
received by the Company or such Subsidiary from the disposition of all or any
portion of such Investments (other than to a Subsidiary of the Company), and (C)
the fair market value of any Unrestricted Subsidiary that is redesignated by the
Company as a Subsidiary, as determined in good faith by the Board of Directors
of the Company; provided, however, that with respect to all Investments made in
Unrestricted Subsidiaries, the sum of clauses (A), (B) and (C) above with
respect to such Investments shall not exceed the aggregate amount of all
Investments made in all Unrestricted Subsidiaries.
"Net Proceeds" means (a) in the case of any sale of Equity Interests by
the Company, the aggregate net proceeds received by the Company, less payment of
expenses, commissions and the like incurred in connection therewith and any and
all payments made to the Trustee, the Collateral Agent and the agent of the
holders of the Senior Indebtedness under the Intercreditor Agreement, whether
such proceeds are in cash or in property (valued at the fair market value
thereof at the time of receipt), and (b) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind (other than Equity
Interests of the Company which are not Disqualified Equity Interests) for or
into Equity Interests of the Company which are not Disqualified Equity
Interests, the net book value of such outstanding securities on the date of such
exchange, exercise, conversion or surrender plus any additional amount required
to be paid by the holder to the Company upon such exchange, exercise, conversion
or surrender (e.g., on account of fractional shares and less all expenses
incurred by the Company in connection therewith).
"Obligations" means, with respect to any Indebtedness, any principal,
premium, interest, penalties, fees, indemnifications, reimbursements, damages
and other expenses payable under the documentation governing such Indebtedness.
13
"Officer" means, with respect to any Person, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer or the
Treasurer of such Person, the Controller, the Secretary or any Assistant
Secretary of the Company or a Guarantor, or any other officer designated by the
Board of Directors of such Person, as the case may be (or, in the case of a
Person that is a partnership (or other noncorporate Person), a general partner
(or analogous individuals) of such Person in such capacity).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer or any Treasurer of such Person (or,
in the case of a Person that is a partnership (or other non-corporate Person),
by a general partner (or analogous individuals) of such Person in such capacity)
that shall comply with applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel which
counsel is reasonably acceptable to the Trustee.
"Permitted Investments" means, for any Person, Investments made on or
after the date of this Indenture consisting of:
(i) Temporary Cash Investments;
(ii) Investments in the Company or a Subsidiary of
the Company;
(iii) Investments in any Person, if (A) as a result
of such Investment (1) such Person becomes a Wholly-Owned
Subsidiary of the Company or (2) such Person is merged,
consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated
into, the Company or a Wholly-Owned Subsidiary thereof and (B)
after giving effect to such Investment the Company is in
compliance with Sections 4.17 and 5.1 hereof;
(iv) Investments represented by accounts receivable
created or acquired in the ordinary course of business;
(v) Advances to employees in the ordinary course
of business, including, but not limited to, advances for
anticipated relocation expenses, and loans to employees not
exceeding the amount thereof permitted under the Credit
Agreement;
(vi) Investments under or pursuant to Interest Rate
Agreements;
(vii) An investment that is made by the Company or a
Subsidiary thereof in the form of any Equity Interests,
Indebtedness or securities that are issued by any Person
solely as partial consideration for the consummation of an
Asset Sale that is otherwise permitted under Section 4.8
hereof;
(viii) Investments in the Senior Notes;
(ix) Investments existing on the Issue Date;
14
(x) Investments in connection with a Permitted
Mortgage Financing;
(xi) Investments provided for in the Plan of
Reorganization; and
(xii) Net Investments in any Person; provided,
however, that the aggregate amount of all such Net Investments
made pursuant to this clause (xii) shall not exceed $10
million at any one time outstanding.
"Permitted Liens" means, without duplication,
(i) Liens securing Senior Indebtedness permitted
to be incurred under clause (i) of the second paragraph of
Section 4.6,
(ii) Liens existing on the Issue Date,
(iii) Liens in favor of the Company or any
Subsidiary thereof, provided that if such Liens are on any
Collateral as defined in the Intercreditor Agreement, that
such Liens are either collaterally assigned to the Collateral
Agent or the Trustee or subordinated to the Lien in favor of
the Collateral Agent securing the Senior Notes,
(iv) Liens on property of a Person existing at the
time such Person becomes a Subsidiary of, or is acquired by,
merged into or consolidated with the Company or any Subsidiary
thereof, or such property is otherwise acquired by the Company
or a Subsidiary thereof; provided, however, that such Liens
(a) were not created in connection with or in anticipation of
such acquisition, merger or consolidation or such Person
becoming a Subsidiary and (b) are not applicable to any other
property of the Company or any of the other Subsidiaries of
the Company,
(v) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are
being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; provided,
however, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor,
(vi) landlords', carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to
amounts which are not yet delinquent or are being contested in
good faith by appropriate proceedings,
(vii) Liens incurred or deposits made in the
ordinary course of business (a) to secure the performance of
tenders, bids, leases, contracts (other than for the repayment
of Indebtedness), statutory obligations and other similar
obligations, or arising as a result of progress payments under
government contracts, , (b) in connection with workers'
compensation, unemployment insurance and other social security
legislation, or (c) to secure the performance of
15
surety bonds, and appeal bonds required in connection with
judgments that are not paid by an unaffiliated insurance
carrier pursuant to any insurance policy maintained by the
Company,
(viii) easements, rights-of-way, restrictions, minor
defects or irregularities in title and other similar
encumbrances which, in the aggregate, do not materially
detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business
of the Company or any Subsidiary in connection therewith,
(ix) Liens to secure Purchase Money Indebtedness
that is otherwise permitted under this Indenture; provided,
however, that (a) any such Lien is solely for the purpose of
securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct
costs of, and other direct expenses paid or charged in
connection with, such a purchase or construction) of such
Property, (b) the principal amount of the Indebtedness secured
by such Lien does not exceed 100% of such costs, (c) the
principal amount of all Purchase Money Indebtedness secured by
such Liens does not exceed $100 million at any time, (d) such
Lien does not extend to or cover any Property other than such
item or items of Property and any improvements on such item(s)
and (e) such Lien is granted within 180 days of the incurrence
of such Purchase Money Indebtedness,
(x) Liens securing Capitalized Lease Obligations
permitted to be incurred under clause (v) of the second
paragraph of Section 4.6 hereof; provided, however, that such
Lien does not extend to any property other than that subject
to the underlying lease,
(xi) Liens pursuant to leases and subleases of real
property which do not interfere with the ordinary conduct of
the business of the Company or any of its Subsidiaries and
which are made on customary and usual terms applicable to
similar properties and in the case of any lease of a Health
Care Facility do not extend to any property of the Company or
a Subsidiary other than the personal property located at such
facility,
(xii) Liens securing reimbursement obligations under
commercial letters of credit, but only in or upon the goods
the purchase of which were financed by such letters of credit,
(xiii) Liens securing Acquisition Indebtedness,
provided that such Liens do not extend to or cover any
property other than the property directly or indirectly
acquired with the proceeds of such Acquisition Indebtedness
and any improvements thereto (unless such Liens are otherwise
Permitted Liens),
(xiv) Liens securing Refinancing Indebtedness;
provided, however, that such Liens extend only to the assets
securing the Indebtedness being extended, refinanced, renewed
or replaced, and such Indebtedness was previously
16
secured by such asset and provided, further, the terms of such
Liens are no less favorable to the holders of the Senior Notes
than the Liens being extended, refinanced, renewed or
replaced,
(xv) Liens securing a Permitted Mortgage Financing
permitted to be incurred under clause (v) of the second
paragraph of Section 4.6 hereof,
(xvi) Liens in favor of the Trustee or the
Collateral Agent for the benefit of, among others, the holders
of the Senior Notes,
(xvii) any Lien provided for in the Plan of
Reorganization or as part of any settlement or restructuring
entered into prior to the Issue Date and approved by the
Bankruptcy Court,
(xviii) Liens on accounts receivable or inventory of
the Company or any Subsidiary;
(xix) other Liens on assets of the Company or its
Subsidiaries securing Indebtedness having an aggregate
principal amount at any one time outstanding not to exceed $15
million.
"Permitted Mortgage Financing" means a transaction in which (i) the
Company and/or certain of its Subsidiaries would transfer certain assets to one
or more Unrestricted Subsidiaries, (ii) in consideration for such transfer of
assets, the Company would retain, directly or indirectly, 100% of the Equity
Interests in such Unrestricted Subsidiary or Subsidiaries; (iii) such
Unrestricted Subsidiary or Subsidiaries would use the assets contributed by the
Company and/or its Subsidiaries as security for a mortgage refinancing and (iv)
all net proceeds received by such Unrestricted Subsidiary or Subsidiaries in
such mortgage refinancing would be dividended or otherwise transferred to the
Company.
"Person" means any individual, corporation, partnership, limited
liability company or partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government (including any agency
or political subdivision thereof).
"PHCMI" means Professional Health Care Management, Inc., a Michigan
corporation.
"PHCMI Debtors" means PHCMI and each of its Wholly Owned Subsidiaries
that were debtors in the Cases.
"Plan Disclosure Statement" means that certain Disclosure Statement for
Second Amended Joint Plan of Reorganization for Mariner Post-Acute Network,
Inc., Mariner Health Group, Inc. and their respective Debtor Affiliates, as
approved by the Bankruptcy Court for use by the Company in soliciting votes on
the Plan of Reorganization, including all schedules and exhibits thereto and all
documents incorporated by reference therein or contained in the documentary
supplement thereto.
"Plan of Reorganization" means the Joint Plan of Reorganization for
Mariner Post-Acute Network, Inc., Mariner Health Group, Inc., and their
respective Debtor Affiliates, as confirmed
17
by an order of the United States Bankruptcy Court for the District of Delaware,
dated April 3, 2002, including all schedules and exhibits thereto and all
documents incorporated by reference therein or contained in the documentary
supplement thereto.
"Preferred Equity Interest" means any Equity Interest of the Company or
any of its Subsidiaries, however designated, which entitles the holder thereof
to a preference with respect to dividends, distributions or liquidation proceeds
of such Person over the holders of any other Equity Interest issued by such
Person.
"principal" of a debt security means the principal amount of the
security plus, when appropriate, the premium, if any, on the security.
"Proceeding" means a liquidation, dissolution, bankruptcy, insolvency
reorganization, receivership or similar proceeding under Bankruptcy Law, an
assignment for the benefit of creditors, any marshalling of assets or
liabilities or winding up or dissolution, but shall not include any transaction
permitted by and made in compliance with Article 5 hereof.
"Property" or "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 and
its Subsidiaries under GAAP.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of Property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Redemption Date" when used with respect to any Senior Note to be
redeemed means the date fixed for such redemption pursuant to this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
renews, replaces or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Issue Date (other than Indebtedness incurred under the Credit
Facility) or other Indebtedness permitted to be incurred by the Company or any
Guarantor pursuant to the first paragraph of Section 4.6, whether involving the
same or any other lender or creditor or group of lenders or creditors, but only
to the extent that (i) the Refinancing Indebtedness is subordinated to the
Senior Notes to at least the same extent as the Indebtedness being refunded,
refinanced or extended, if at all, (ii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refunded,
refinanced or extended, or (b) after the maturity date of the Senior Notes,
(iii) such Refinancing Indebtedness has a weighted average life to maturity at
the time such Refinancing Indebtedness is incurred that is equal to or greater
than the weighted average life to maturity of the Indebtedness being refunded,
refinanced or extended, (iv) such Refinancing Indebtedness is in an aggregate
principal amount that is less than or equal to the aggregate principal then
outstanding under the Indebtedness being refunded, refinanced or extended, plus
reasonable transaction costs and expenses incurred by the Company and its
Subsidiaries in connection with consummating such Refinancing Indebtedness, and
(v) such Refinancing Indebtedness is incurred by the same Person that initially
incurred the Indebtedness being refunded, refinanced or extended, except that
the Company may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any
18
Wholly-Owned Subsidiary of the Company or any Person that, contemporaneously
with such refunding, refinancing or extension of Indebtedness, will become a
Wholly-Owned Subsidiary of the Company.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restoration" means the restoration of all or any portion of the
Collateral in connection with any destruction or Condemnation thereof.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Equity Interests
of the Company or any Subsidiary thereof or any payment made to the direct or
indirect holders (in their capacities as such) of Equity Interests of the
Company or any Subsidiary thereof (other than (a) dividends or distributions
payable solely in Equity Interests (other than Disqualified Equity Interests) or
in options, warrants or other rights to purchase Equity Interests (other than
Disqualified Equity Interests) or (b) in the case of Subsidiaries of the
Company, dividends or distributions payable to the Company or to a Wholly-Owned
Subsidiary of the Company), (ii) the purchase, redemption or other acquisition
or retirement for value of any Equity Interest of the Company or any Subsidiary
thereof (other than Equity Interests owned by the Company or a Wholly-Owned
Subsidiary, excluding Disqualified Equity Interests), (iii) the making of any
principal payment on, or the purchase, defeasance, repurchase, redemption or
other acquisition or retirement for value, prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, of any Subordinated
Indebtedness (other than Subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal installment or final
maturity, in each case within one year of the date of such acquisition), or (iv)
the making of any Investment or guarantee of any Investment in any Person other
than a Permitted Investment. For purposes of determining the amount expended for
Restricted Payments, cash distributed or invested shall be valued at the face
amount thereof and property other than cash shall be valued at its fair market
value.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of the Company of any
real or tangible personal Property, which Property (i) has been or is to be
sold, conveyed or transferred by the Company or such Subsidiary to such Person
in contemplation of such leasing and (ii) would constitute an Asset Sale if such
Property had been sold in an outright sale thereof.
"SEC" or "Commission" means the United States Securities and Exchange
Commission as constituted from time to time or any successor performing
substantially the same functions.
"Securities Act" means the Securities Act of 1933, as amended.
19
"Senior Note Documents" means this Indenture, the Senior Notes, the
Guarantees and all other documents and instruments entered into in connection
with this Indenture.
"Senior Notes" means the Second Priority Secured Notes due 2009, being
the securities that are issued under this Indenture, as amended or supplemented
from time to time pursuant to this Indenture, including, without limitation, any
notes issued in accordance with Section 2.2 hereof.
"Senior Indebtedness" means the following obligations, whether
outstanding on the Issue Date or thereafter incurred: all Indebtedness and other
monetary obligations of the Company or any Subsidiary of the Company under or in
respect of the Credit Facility (including obligations in respect of any lease
financing facility of the Credit Facility) or any Interest Rate Agreement or
Currency Agreement related to Indebtedness under the Credit Facility, whether
for principal, interest (including interest accruing after the filing of a
petition by or against the Company or any Subsidiary of the Company under any
state or federal Bankruptcy Laws, whether or not such interest is allowed as a
claim after such filing in any proceeding under such law), fees, expenses,
indemnification or otherwise.
"Subordinated Indebtedness" means Indebtedness of any Person which is
expressly subordinated in right of payment to any other Indebtedness of such
Person.
"Subsidiary" of any specified Person means any corporation,
partnership, limited liability company, joint venture, association or other
business entity, whether now existing or hereafter organized or acquired, (i) in
the case of a corporation, of which more than 50% of the total voting power of
the Equity Interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, officers or trustees thereof
is held by such first-named Person or any of its Subsidiaries; or (ii) in the
case of a partnership, limited liability company, joint venture, association or
other business entity, with respect to which such first-named Person or any of
its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the first-named Person for
financial statement purposes. Notwithstanding the foregoing, an Unrestricted
Subsidiary shall not be deemed a Subsidiary of the Company other than for
purposes of the definition of Unrestricted Subsidiary, unless the Company shall
have designated such Unrestricted Subsidiary as a "Subsidiary" by written notice
to the Trustee.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in
Section 8.3 hereof).
"Temporary Cash Investments" means (i) Investments in marketable,
direct obligations issued or fully guaranteed by the United States of America,
or of any governmental agency or political subdivision thereof, backed by the
full faith and credit of the United States and maturing within one year of the
date of purchase; (ii) Investments in time deposits, certificates of deposit,
bankers acceptances or commercial paper issued by a bank (or any parent company
of such bank) organized under the laws of the United States of America or any
State thereof or the District of Columbia, in each case having capital, surplus
and undivided profits totaling more than $500 million and rated at least A by
S&P and A-2 by Moody's, maturing within one year of
20
purchase; (iii) commercial paper that is rated at least A- by S&P or P-1 by
Moody's, issued by a company that is incorporated under the laws of the United
States or of any State and directly issues its own commercial paper, and has a
remaining term to maturity of not more than one year; (iv) a repurchase
agreement with (A) any commercial bank that is organized under the laws of any
State or any national banking association and that has total assets of at least
$[500] million, or (B) any investment bank that is organized under the laws of
any State and that has total assets of at least $[500] million, which agreement
is secured by any one or more of the securities and obligations described in
clauses (i), (ii) or (iii) of this definition of Temporary Cash Investments,
which shall have a market value (exclusive of accrued interest and valued at
least monthly) at least equal to the principal amount of such investments; or
(v) Investments in money market funds that invest substantially all of such
funds' assets in the Investments described in the preceding clauses (i), (ii),
(iii) and (iv).
"Trust Officer" when used with respect to the Trustee, means any
officer or assistant officer of the Trustee assigned to the Corporate Trust
Administration department or similar department performing corporate trust work
of the Trustee or any successor to such department or, in the case of a
successor Trustee, any officer of such successor Trustee performing corporate
trust functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"UCC-1" means those UCC financing statements and fixture filings filed
by the Company or any Guarantor in connection with any of the Collateral
Documents.
"Unrestricted Subsidiary" means (i) PHCMI, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Subsidiary of the Company which shall have
been designated after the Issue Date as an Unrestricted Subsidiary by a
resolution adopted by the Board of Directors of the Company; provided that a
Subsidiary organized or acquired after the Issue Date may be so classified as an
Unrestricted Subsidiary only if such classification is in compliance with
Section 4.13 hereof and an Unrestricted Subsidiary may be designated as a
Subsidiary (but only if such classification is in compliance with the definition
of "Subsidiary" contained in this Section 1.1). The Trustee shall be given
prompt written notice by the Company of each resolution adopted by the Board of
Directors of the Company under this provision, together with a copy of each such
resolution adopted.
"U.S. Government Obligations" means (i) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such
21
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or a specific payment of principal or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt.
"Wholly-Owned Subsidiary" means any Subsidiary all of the outstanding
Equity Interests (other than directors' qualifying shares) of which are owned,
directly or indirectly, by the Company.
SECTION 1.2. Other Definitions. The definitions of the following terms
may be found in the Sections indicated as follows:
Term Defined in Section
"Agent Members" 2.15
"Bankruptcy Law" 6.1
"Business Day" 12.8
"Collateral Proceeds Amount" 4.8
"Collateral Proceeds Offer" 4.8
"Covenant Defeasance" 9.3
"Custodian" 6.1
"Event of Default" 6.1
"Legal Defeasance" 9.2
"Legal Holiday" 12.8
"Paying Agent" 2.3
"Physical Notes" 2.1
"Registrar" 2.3
"Required Filing Date" 4.2
"transfer" 5.1
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the portion of such
provision required to be incorporated herein in order for this Indenture to be
qualified under the TIA is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
22
"obligor on the indenture securities" means the Company, the Guarantors
or any other obligor on the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings therein assigned to them.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it herein, whether
defined expressly or by reference;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) words used herein implying any gender shall apply to every
gender;
(6) "herein," "hereof' and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
Subdivision, unless expressly stated otherwise; and
(7) provisions apply to successive events and transactions.
ARTICLE 2
The Senior Notes
SECTION 2.1. Dating; Incorporation of Form in Indenture. The Senior
Notes and the Trustee's certificate of authentication shall be substantially in
the form of Exhibit B which is incorporated in and made part of this Indenture.
The Senior Notes shall have notations, legends or endorsements required by law,
stock exchange rule, usage, or agreements to which the Company or any Guarantor
is subject. The Company shall use "CUSIP" numbers in issuing the Senior Notes.
Each Senior Note shall be dated the date of its authentication.
One or more permanent Global Notes issued and delivered hereunder may
be in registered form, substantially in the form set forth in Exhibit B, having
the legend set forth in Exhibit C, may be issued to the Depository, to the
extent such Depository is the Registered Holder of the applicable Senior Notes.
Otherwise, Senior Notes hereunder may be issued in the form of certificated
Senior Notes in registered form in substantially the form set forth in Exhibit B
(the "Physical Notes"), without the legend set forth in Exhibit C.
The terms and provisions contained in the Senior Notes and the
Guarantees shall constitute, and are hereby expressly made, a part of this
Indenture and the Company, the
23
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.2. Execution and Authentication. The Senior Notes shall be
executed on behalf of the Company by two Officers of the Company or an Officer
and an Assistant Secretary of the Company. Such signatures may be either manual
or facsimile. If an Officer whose signature is on a Senior Note no longer holds
that office at the time the Trustee authenticates the Senior Note or at any time
thereafter, the Senior Note shall be valid nevertheless.
A Senior Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Senior Note. Such signature shall be
conclusive evidence that the Senior Note has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall authenticate Senior Notes
for original issue in the aggregate principal amount of up to $150,000,000,
subject to adjustment pursuant to Section 8.1(7). The aggregate principal amount
of Senior Notes outstanding at any time may not exceed such amount except as
provided in Section 2.7. The Senior Notes shall be issuable only in registered
form without coupons and only in denominations of $1,000 and integral multiples
thereof. The Trustee shall issue Senior Notes upon a Company Request.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Senior Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. Such authenticating agent shall
have the same right as the Trustee in dealing with the Company or an Affiliate.
SECTION 2.3. Agents. The Company shall maintain an office or agency in
the Borough of Manhattan, City of New York, State of New York where Senior Notes
may be presented for registration of transfer or for exchange ("Registrar") and
where Senior Notes may be presented for payment ("Paying Agent") and where
notices and demands to or upon the Company in respect of the Senior Notes and
this Indenture may be served. The Registrar shall keep a register of the Senior
Notes and of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents. The Company may change
any Paying Agent, Registrar or co-Registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent which is not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or agent for service
of notices and demands, or fails to give the foregoing notice, the Trustee shall
act as such and shall be entitled to appropriate compensation pursuant to
Section 7.7. The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the Senior
Notes.
SECTION 2.4. Paying Agent to Hold Money in Trust. On or before each due
date of the principal of, premium if any, and interest on any Senior Notes, the
Company shall deposit
24
with the Paying Agent a sum sufficient to pay such principal, premium if any,
and interest so becoming due. Each Paying Agent shall hold in trust for the
benefit of Noteholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Senior Notes (whether such money has
been paid to it by the Company or any other obligor on the Senior Notes), and
the Company and the Paying Agent shall notify the Trustee of any default by the
Company or any Guarantor (or any other obligor on the Senior Notes) in making
any such payment. Money held in trust by the Paying Agent need not be segregated
except as required by law and in no event shall the Paying Agent be liable for
any interest on any money received by it hereunder. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee, and the
Trustee may at any time during the continuance of any Event of Default specified
in Section 6.1(1) or (2), upon written request to a Paying Agent, require such
Paying Agent to forthwith pay to the Trustee all sums so held in trust by such
Paying Agent together with a complete accounting of such sums. Upon doing so,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.5. Noteholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Noteholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee on or prior to the tenth Business Day
before each Interest Payment Date, and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders, including the
aggregate principal amount of Senior Notes held by each such Noteholder.
SECTION 2.6. Transfer and Exchange. (a) Subject to Section 2.16, when a
Senior Note is presented to the Registrar with a request to register the
transfer thereof, the Registrar shall register the transfer as requested if the
requirements of applicable law and of this Indenture are met and, when Senior
Notes are presented to the Registrar with a request to exchange them for an
equal principal amount of Senior Notes of other authorized denominations, the
Registrar shall make the exchange as requested, provided that every Senior Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney, duly authorized in writing. To permit registration of
transfers and exchanges, upon surrender of any Senior Note for registration of
transfer at the office or agency maintained pursuant to Section 2.3 hereof, the
Company shall issue and execute and the Trustee shall authenticate Senior Notes
at the Registrar's request. Any exchange or transfer shall be without any
service charge to the Noteholder, except that the Company may require payment by
the Noteholder of a sum sufficient to cover any tax or the governmental charge
that may be imposed in relation to a transfer or exchange, but this provision
shall not apply to any exchange pursuant to this Indenture. The Trustee shall
not be required to register transfers of Senior Notes or to exchange Senior
Notes for a period of 15 days before selection of any Senior Notes to be
redeemed. The Trustee shall not be required to exchange or register transfers of
any Senior Notes called or being called for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part. All
Senior Notes issued upon any transfer or exchange pursuant to the terms of this
Indenture will evidence the same debt and will be entitled to the same benefits
under this Indenture as the Senior Notes surrendered upon such transfer or
exchange.
25
(b) Any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of the beneficial interests in such Global
Note may be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Global Note shall be required to be reflected in a book entry.
(c) Except as expressly provided herein, neither the Trustee
nor the Registrar shall have any duty to monitor the Company's compliance with
or have any responsibility with respect to the Company's compliance with any
federal or state securities laws.
SECTION 2.7. Replacement Senior Notes. If a mutilated Senior Note is
surrendered to the Registrar or Trustee or if the Holder of a Senior Note
presents evidence to the satisfaction of the Company and the Trustee that the
Senior Note has been lost, destroyed or wrongfully taken and of the ownership
thereof, the Company shall issue and the Trustee shall authenticate a
replacement Senior Note if the Holder of such Senior Note furnishes to the
Company and the Trustee evidence reasonably acceptable to them of the ownership
and destruction, loss or theft of such Senior Note or if the reasonable
requirements of the Trustee and of Section 8-405 of the Uniform Commercial Code
as in effect in the State of Delaware are met. An indemnity bond may be required
by the Company or the Trustee that is sufficient in the judgment of the Company
and the Trustee to protect the Company, the Trustee or any Agent from any loss
which any of them may suffer if a Senior Note is replaced. The Company or the
Trustee each may charge for its expenses (including reasonable attorneys' fees
and expenses) in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the
Company.
SECTION 2.8. Outstanding Senior Notes. Senior Notes outstanding at any
time are all Senior Notes authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section 2.8 as not outstanding.
If a Senior Note is replaced pursuant to Section 2.7, it ceases to be
outstanding until the Company and the Trustee receive proof satisfactory to each
of them that the replaced Senior Note is held by a bona fide purchaser in whose
hands such obligation is a legal, valid and binding obligation of the Company.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and all accrued interest
with respect to Senior Notes payable on that date and is not prohibited from
paying such money to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Senior Notes shall cease to be
outstanding and interest on them shall cease to accrue.
Subject to Section 12.6, a Senior Note does not cease to be outstanding
solely because the Company or an Affiliate holds the Senior Note.
SECTION 2.9. Temporary Senior Notes. Until definitive Senior Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Senior Notes. Temporary Senior Notes shall be substantially in the
form, and shall carry all rights, benefits and privileges, of definitive Senior
Notes but may have variations that the Company considers
26
appropriate for temporary Senior Notes. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Senior Notes in
exchange for temporary Senior Notes presented to it.
SECTION 2.10. Cancellation. The Company at any time may deliver Senior
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Senior Notes surrendered to them for transfer,
exchange or payment. The Trustee shall cancel and retain or may dispose of
(subject to the record-retention requirements of the Exchange Act), in
accordance with its normal practice, all Senior Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.7 hereof, the Company
may not issue new Senior Notes to replace Senior Notes in respect of which it
has previously paid all principal, premium and interest accrued thereon, or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of any interest on the Senior Notes, it shall pay the defaulted amounts, plus
(to the extent permitted by law) any interest payable on defaulted amounts
pursuant to Section 4.1 hereof, to the persons who are Noteholders on a
subsequent special record date.
The Company shall fix the special record date and payment date for
payment of such defaulted amounts in a manner satisfactory to the Trustee and
provide the Trustee at least 20 days notice of the proposed amount of default
interest to be paid and the special payment date. At least 15 days before the
special record date, the Company shall mail or cause to be mailed to each
Noteholder at his address as it appears on the Senior Notes register maintained
by the Registrar a notice that states the special record date, the payment date
(which shall be not less than five nor more than ten days after the special
record date), and the amount to be paid. In lieu of the foregoing procedures,
the Company may pay defaulted interest in any other lawful manner satisfactory
to the Trustee.
SECTION 2.12. Deposit of Moneys. Prior to 10:00 a.m., New York City
time, as required, on (i) each Interest Payment Date and (ii) the Maturity Date,
the Company shall have deposited with the Paying Agent in immediately available
funds money sufficient to make cash payments, if any, due on such Interest
Payment Date or Maturity Date, as the case may be, in a timely manner which
permits the Trustee to remit payment to the Holders at such times. The principal
and interest on Global Notes shall be payable to the Depository or its nominee,
as the case may be, as the sole registered owner and the sole holder of the
Global Notes represented thereby. The principal and interest on Physical Notes
shall be payable at the office of the Paying Agent.
SECTION 2.13. CUSIP Number. The Company in issuing the Senior Notes may
use a "CUSIP" number (or numbers), and if so, the Trustee may use the CUSIP
number(s) in notices of redemption or exchange as a convenience to Holders,
provided that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number(s) printed in the notice or on the
Senior Notes, and that reliance may be placed only on the other identification
numbers printed on the Senior Notes. The Company will promptly notify in writing
the Trustee of any such CUSIP number used by the Company in connection with the
Senior Notes and any change in such CUSIP number.
27
SECTION 2.14. Payments to Holders. Notwithstanding any provisions of
this Indenture and the Senior Notes to the contrary:
(a) Except for any payments to be made on a Redemption Date or
the Maturity Date, payments with respect to any of the Senior Notes may be made
by the Paying Agent upon receipt from the Company of immediately available
funds, by check mailed to the Holder, at the address shown in the registrar of
the Senior Notes maintained by the Registrar pursuant to Section 2.3 hereof; or
(b) At the request of a Holder of at least $5 million in
aggregate principal amount of Senior Notes outstanding, all payments with
respect to any of the Senior Notes may be made by the Paying Agent upon receipt
from the Company of immediately available funds prior to 10:00 a.m., New York
City time, directly to the Holder of such Senior Note (whether by federal funds,
wire transfer or otherwise); provided, however, that no such federal funds, wire
transfer or other such direct payment shall be made to any Holder under this
Section 2.14(b) unless such Holder has delivered written instructions to the
Trustee prior to the relevant record date for such payment requesting that such
payment will be so made and designating the bank account to which such payments
shall be so made and, in the case of payments of principal, surrenders the
Senior Note to the Trustee in exchange for a Senior Note or Senior Notes
aggregating the same principal amount as the unredeemed principal amount of the
Senior Notes surrendered. The Trustee shall be entitled to rely on the last
instruction delivered by the Holder pursuant to this Section 2.14(b) unless a
new instruction is delivered prior to the relevant record date for a payment
date. The Company will indemnify and hold the Trustee harmless against any loss,
liability or expense (including attorneys' fees and expenses) resulting from any
act or omission to act on the part of the Company or any such Holder in
connection with any such agreement or which the Paying Agent may incur as a
result of making any payment in accordance with any such agreement.
All payments made on a Redemption Date are subject to Section 2.8 and
Article 3 hereof. No later than fifteen (15) days prior to the Maturity Date,
the Trustee shall notify the Holder, at the address shown in the registrar of
the Senior Notes maintained by the Registrar pursuant to Section 2.3 hereof,
that the Company expects that the final installment of principal of and interest
on the Senior Notes will be paid on the Maturity Date. Such notice shall specify
that such final installment will be payable only upon presentation and surrender
of such Senior Note and shall specify the place where such Senior Notes may be
presented and surrendered for payment of such installment. Additionally, in
accordance with Section 2.8, such Senior Notes shall cease to be outstanding.
SECTION 2.15. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by Depository, or the Trustee as its custodian, or under the Global
Note, and the Depository may be treated by the
28
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of the Global Note 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 Senior Note.
(b) Transfers of Global Notes shall be limited to transfer in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository. In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Notes if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Note and a successor depositary is not appointed by
the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request from
the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in writing in exchange for its beneficial interest
in the Global Notes, an equal aggregate principal amount of Physical Notes of
authorized denominations.
(e) The Holder of any Global Note 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, the Senior Notes or the Guarantees.
SECTION 2.16. Record Date. The record date for purposes of determining
the identity of Holders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as
provided in TIA Section 316(c).
ARTICLE 3
Redemption
SECTION 3.1. Notices to Trustee. If the Company elects to redeem Senior
Notes pursuant to Section 3.7 hereof, (1) at least 30 days prior to the
Redemption Date (or such shorter
29
period prior to the Redemption Date as the Trustee may agree to in writing), the
Company shall notify the Trustee in writing of the Redemption Date, the
principal amount of Senior Notes to be redeemed and the redemption price, and
deliver to the Trustee an Officers' Certificate stating that such redemption
will comply with the conditions contained in Section 3.7 hereof.
SECTION 3.2. Selection by Trustee of Senior Notes to Be Redeemed. In
the event that fewer than all of the Senior Notes are to be redeemed, the
Trustee shall select the Senior Notes to be redeemed, if the Senior Notes are
listed on a national securities exchange, in accordance with the rules of such
exchange or, if the Senior Notes are not so listed, on either a pro rata basis
or by lot, or such other method as it shall deem fair and equitable. As soon as
practicable but in not less than 20 days prior to the Redemption Date, the
Trustee shall notify the Company of the Senior Notes selected for redemption
and, in the case of any Senior Notes selected for partial redemption, the
principal amount thereof to be redeemed. The Trustee may select for redemption
portions of the principal of the Senior Notes that have denominations larger
than $1,000. Senior Notes and portions thereof the Trustee selects shall be
redeemed in amounts of $1,000 or whole multiples of $1,000. For all purposes of
this Indenture unless the context otherwise requires, provisions of this
Indenture that apply to Senior Notes called for redemption also apply to
portions of Senior Notes called for redemption.
SECTION 3.3. Notice of Redemption. At least 15 days, but no more than
30 days, before a Redemption Date, the Company shall mail, or cause to be
mailed, a notice of redemption by first-class mail to each Holder of Senior
Notes to be redeemed at his last address as the same appears on the registry
books maintained by the Registrar pursuant to Section 2.3 hereof.
The notice shall identify the Senior Notes to be redeemed (including
the CUSIP number(s) thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price and the amount of accrued interest,
if any, to be paid (or the method by which any such amount of accrued interest
to be paid is to be calculated);
(3) if any Senior Note is being redeemed in part, the portion
of the principal amount of such Senior Note to be redeemed and that, after the
Redemption Date and upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Senior Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that unless the Company defaults in making the redemption
payment, interest on Senior Notes called for redemption ceases to accrue on and
after the Redemption Date and that the only remaining right of the Holders of
such Senior Notes is to
30
receive payment of the Senior Notes redemption price
upon surrender to the Paying Agent of the Senior Notes redeemed; and
(7) the aggregate principal amount of Senior Notes that are
being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.4. Effect of Notice of Redemption. Once the notice of
redemption described in Section 3.3 is mailed, Senior Notes called for
redemption become due and payable on the Redemption Date and at the redemption
price, including any premium, plus interest accrued to the Redemption Date. Upon
surrender to the Paying Agent, such Senior Notes shall be paid at the redemption
price, including any premium, plus interest accrued to the Redemption Date,
provided that if the Redemption Date is after a regular interest payment record
date and on or prior to the applicable Interest Payment Date, the accrued
interest shall be payable to the Holder of the redeemed Senior Notes registered
on the relevant record date, and provided, further, that if a Redemption Date is
a Legal Holiday, payment shall be made on the next succeeding Business Day and
no interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.5. Deposit of Redemption Price. On or prior to 10:00 a.m.,
New York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent in immediately available funds money sufficient to pay the
redemption price of and accrued interest on all Senior Notes to be redeemed on
that date other than Senior Notes or portions thereof called for redemption on
that date which have been delivered by the Company to the Trustee for
cancellation.
On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Senior Notes called for redemption
shall have been made available in accordance with the preceding paragraph and
payment thereof is not prohibited pursuant to the terms of this Indenture, the
Senior Notes called for redemption will cease to accrue interest and the only
right of the Holders of such Senior Notes will be to receive payment of the
redemption price of and, subject to the first proviso in Section 3.4, accrued
and unpaid interest on such Senior Notes to the Redemption Date. If any Senior
Note called for redemption shall not be so paid, interest will be paid, from the
Redemption Date until such redemption payment is made, on the unpaid principal
of the Senior Note and any interest not paid on such unpaid principal, in each
case, at the rate and in the manner provided in the Senior Notes.
SECTION 3.6. Senior Notes Redeemed in Part. Upon surrender of a Senior
Note that is redeemed in part, the Trustee shall authenticate for a Holder a new
Senior Note equal in principal amount to the unredeemed portion of the Senior
Note surrendered.
SECTION 3.7. Optional Redemption. The Company may redeem the Senior
Notes, in whole or in part, at any time at a redemption price equal to 100% of
the principal amount thereof, plus any accrued and unpaid interest to the
Redemption Date.
31
ARTICLE 4
Covenants
SECTION 4.1. Payment of Senior Notes. The Company shall pay the
principal of, premium, if any, and interest on the Senior Notes from the Issue
Date, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears on each Interest Payment Date
and in the manner provided in the Senior Notes at a floating rate per annum,
reset quarterly, equal to 3-month LIBOR (as defined in the Senior Notes) plus
5.50% until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of the
actual number of days elapsed and a 360-day year.
SECTION 4.2. Reports. The Company will file with the SEC all
information, documents and reports to be filed with the SEC pursuant to Section
13 or 15(d) of the Exchange Act, whether or not the Company is subject to such
filing requirements, so long as the SEC will accept such filings on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been or is required to so file such documents. The Company (at its own
expense) shall also in any event within 15 days after each Required Filing Date
(i) transmit by mail to all Holders, at their addresses appearing in the
register of Senior Notes maintained by the Registrar and (ii) file with the
Trustee within 15 days after the Required Filing Date, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company files with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act or would be required to file with the SEC if it were subject
to Section 13 or 15(d) of the Exchange Act. The Company shall comply with the
provisions of TIA Section 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Waiver of Stay, Extension or Usury Laws. The Company and
each Guarantor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead (as a defense or otherwise) or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or such Guarantor, as the case may be, from paying all or any portion of
the principal of, premium, if any, and/or interest on the Senior Notes 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 and each Guarantor hereby
expressly 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.
32
SECTION 4.4. Compliance Certificate. (a) The Company and each Guarantor
(to the extent that such Guarantor is so required under the TIA) shall deliver
to the Trustee, within 120 days after the end of each fiscal year, an Officers'
Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company or such Guarantor, as the case may be) complying with Section 314(a)(4)
of the TIA stating that a review of the activities of the Company or such
Guarantor, as the case may be, during such fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company or such Guarantor, as the case may be, has kept, observed, performed and
fulfilled its obligations under the Collateral Documents and this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company or such Guarantor, as the case may be, has
kept, observed, performed and fulfilled each and every covenant contained in the
Collateral Documents and this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions thereof or hereof
(determined without regard to any period of grace or requirement of notice
provided herein), or, if a Default or Event of Default shall have occurred,
describing all or such Defaults or Events of Default of which he may have
knowledge and what action the Company or such Guarantor, as the case may be, is
taking or proposes to take with respect thereto.
(b) The Company will, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer's becoming aware
of any Default or Event of Default, an Officers' Certificate specifying the
nature and extent of the same in reasonable detail and what action the Company
or such Guarantor, as the case may be, is taking or proposes to take with
respect thereto.
SECTION 4.5. Taxes. The Company shall pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon it or its
Subsidiaries' income, profits or property and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon their
property; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim (1) whose amount, applicability or validity is being contested in good
faith by appropriate negotiations or proceedings or (2) the failure to pay or
discharge would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
SECTION 4.6. Limitation on Additional Indebtedness. The Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
incur (as defined herein) any Indebtedness (including Acquired Indebtedness);
provided, however, that the Company or any Guarantor may incur Indebtedness
(including Acquired Indebtedness) if (i) after giving effect on a pro forma
basis to the incurrence of such Indebtedness and, to the extent set forth in the
definition of Consolidated Fixed Charge Coverage Ratio, the receipt and
application of the proceeds thereof, the Company's Consolidated Fixed Charge
Coverage Ratio would be greater than 2.0 to 1; and (ii) no Default or Event of
Default shall have occurred and be continuing at the time or as a consequence of
the incurrence of such Indebtedness.
33
The foregoing paragraph shall not prohibit the incurrence of
the following:
(i) Senior Indebtedness in an aggregate principal amount of
up to $____ million less the aggregate principal amount of all scheduled
principal repayments and all mandatory prepayments of principal thereof
permanently reducing the commitments thereunder;
(ii) Indebtedness under or in connection with the Senior
Notes and the Guarantees;
(iii) Any other Indebtedness provided for in the Plan of
Reorganization; provided, however, that in the case of any Investor Notes, the
proceeds thereof shall be used within one Business Day of receipt to satisfy and
repay the Senior Notes in full.
(iv) Refinancing Indebtedness;
(v) Capitalized Lease Obligations, Permitted Mortgage
Financing and Purchase Money Indebtedness in an aggregate principal amount
outstanding at any time not to exceed $[__] million;
(vi) Indebtedness of a Subsidiary issued to and held by the
Company or a Subsidiary or Indebtedness of the Company to a Subsidiary in
respect of intercompany advances or transactions;
(vii) Indebtedness evidenced by letters of credit issued in
the ordinary course of business to support the Company's or any Subsidiary's
insurance or self-insurance obligations (including, without limitation, to
secure workers' compensation and other similar insurance coverages);
(viii) Indebtedness in respect of Interest Rate Agreements;
provided that the notional principal amount related to such Interest Rate
Agreement does not exceed the principal amount of the Indebtedness to which such
Interest Rate Agreement relates;
(ix) Indebtedness represented by performance bonds, warranty
or contractual service obligations, standby letters of credit or appeal bonds,
in each case to the extent incurred in the ordinary course of business of the
Company and its Subsidiaries; and
(x) Indebtedness not otherwise permitted to be incurred
pursuant to clauses (i) through (ix) above, which, together with any other
Indebtedness incurred pursuant to this clause (x), has an aggregate principal
amount not in excess of $10 million at any time outstanding.
SECTION 4.7. Limitation on Restricted Payments. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, make,
any Restricted Payment, unless
(a) no Default or Event of Default shall have occurred and be
continuing at the time of and immediately after giving effect to such Restricted
Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness under the
first paragraph of Section 4.6 hereof; and
34
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
through and including the date of such Restricted Payment (the "Base Period")
does not exceed the sum of (1) 50% of the Company's Consolidated Net Income (or
in the event such Consolidated Net Income shall be a deficit, minus 100% of such
deficit) during the Base Period, and (2) 100% of the aggregate Net Proceeds from
the issue or sale during the Base Period of Equity Interests (other than
Disqualified Equity Interests or Equity Interests of the Company issued to any
Subsidiary of the Company) of the Company or any Indebtedness of the Company
convertible into or exercisable or exchangeable for Equity Interests (other than
Disqualified Equity Interests) of the Company which has been so converted or
exercised or exchanged, as the case may be. For purposes of determining under
clause (c) the amount expended for Restricted Payments, cash distributed shall
be valued at the face amount thereof and property other than cash will be valued
at its fair market value.
The provisions of this Section 4.7 shall not prohibit
(i) the agreement or commitment to make any payment or
distribution permitted under this Indenture or the payment or distribution so
agreed or committed to be made as long as such payment or distribution is made
on the date of such agreement or commitment or within 60 days thereof; provided,
however, that on the date of such agreement or commitment such payment would
comply with the foregoing provisions, it being understood that the agreement or
commitment to make such payment or distribution shall constitute Indebtedness
permitted under the second paragraph of Section 4.6,
(ii) the retirement of any Equity Interests of the Company or
Subordinated Indebtedness of the Company by conversion into or by an exchange
for Equity Interests (other than Disqualified Equity Interests), or out of the
Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of
the Company) of other Equity Interests of the Company (other than Disqualified
Equity Interests); provided that Net Proceeds of such Equity Interests so used
shall not be included under clause (c)(2) above,
(iii) the redemption or retirement of Subordinated
Indebtedness of the Company in exchange for, by conversion into, or out of the
Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness
(other than any Indebtedness owed to a Subsidiary of the Company) that is
contractually subordinated in right of payment to the Senior Notes to at least
the same extent as the Subordinated Indebtedness being redeemed or retired, or
(iv) the retirement of any Disqualified Equity Interests by
conversion into, or by exchange for, shares of Disqualified Equity Interests, or
out of the Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Disqualified Equity Interests;
provided, however, that in the case of the immediately preceding clauses (ii)
and (iii), no Default or Event of Default shall have occurred and be continuing
at the time of such Restricted Payment or would occur as a result thereof.
35
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date for purposes of clause (c) above, amounts expended
pursuant to clauses (i) and (ii) of the immediately preceding paragraph shall be
included, but without duplication, in such calculation.
For purposes of calculating the Net Proceeds received by the Company
from the issuance or sale of its Equity Interests either upon the conversion of,
or in exchange for, Indebtedness of the Company or any Subsidiary, such amount
will be deemed to be an amount equal to the difference of (a) the sum of (i) the
principal amount or accreted value (whichever is less) of such Indebtedness on
the date of such conversion or exchange and (ii) the additional cash
consideration, if any, received by the Company upon such conversion or exchange,
plus any payment on account of fractional shares, minus (b) all expenses
incurred in connection with such issuance or sale. In addition, for purposes of
calculating the Net Proceeds received by the Company from the issuance or sale
of its Equity Interests upon the exercise of any options or warrants of the
Company, such amount shall be deemed to be an amount equal to the difference of
(a) the additional cash consideration, if any, received by the Company upon such
exercise, minus (b) all fees, commissions, discounts and expenses incurred by
the Company in connection with such issuance or sale.
SECTION 4.8. Limitation on Certain Asset Sales. Neither the Company nor
any of its Subsidiaries will consummate or permit, directly or indirectly, any
Asset Sale, unless (i) the Company or such Subsidiary, as the case may be,
receives consideration at the time of each such Asset Sale at least equal to the
fair market value of the Property subject to such Asset Sale, (ii) (x) in the
case of an Asset Sale of Property constituting Collateral (other than a
Designated Facility), at least 50% of the consideration received by the Company
or such Subsidiary is in the form of cash or Temporary Cash Investments, and (y)
in the case of all other Asset Sales, at least 33% of the consideration is in
the form of cash or Temporary Cash Investments (provided that in the case of an
Asset Sale of a Designated Facility, there is no requirement that the
consideration be in the form of cash or Temporary Cash Investments), (iii) no
Default or Event of Default shall have occurred and be continuing on the date of
such proposed Asset Sale or would result as a consequence of such Asset Sale and
(iv) such Asset Sale will not materially adversely affect or materially impair
the value of the remaining Collateral or materially interfere with the Trustee's
ability to realize such value and will not materially impair the maintenance and
operation of the remaining Collateral; provided that (a) the amount of any notes
or other obligations received by the Company or such Subsidiary from such
transferee that are converted by the Company or such Subsidiary into cash (to
the extent of the cash received) within 90 days following the closing of such
Asset Sale and (b) any Designated Noncash Consideration received by the Company
or any of its Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (b) that is at that time outstanding, less the amount of
cash or Temporary Cash Investments received by the Company or any of its
Subsidiaries in connection with a subsequent sale of such Designated Noncash
Consideration, not exceeding $5 million at the time of the receipt of such
Designated Noncash Consideration (measured at the time received and without
giving effect to subsequent changes in value) shall be deemed to be cash for
purposes of clause (ii) of this provision.
Notwithstanding clauses (i) and (ii) of the immediately preceding
paragraph, the Company or any of the Guarantors may exchange any of its Health
Care Facilities for any other
36
Health Care Facility of any third Person (any such exchange, an "Asset Swap");
provided, however, that (i) the aggregate amount of Asset Swaps that may be
consummated during the term of this Indenture shall not exceed $[50 million],
valued at the fair market value thereof, as determined in good faith by the
Board of Directors of the Company, (ii) prior to consummating any Asset Swap,
the Company shall have provided evidence reasonably satisfactory to the Trustee
demonstrating that, after giving effect to such Asset Swap, the Company would be
able to incur at least $1.00 of additional Indebtedness under the first
paragraph of Section 4.6, (iii) the fair market value of the Property being
received by the Company or any of the Guarantors in connection with any such
Asset Swap shall be at least equal to the fair market value of the Property
being exchanged by the Company or such Guarantor, (iv) prior to consummating any
Asset Swap the Company shall have provided evidence reasonably satisfactory to
the Trustee demonstrating satisfaction of the requirements of the Credit
Facility relating to such Asset Swap, and (v) the Company or the relevant
Guarantor shall take all steps requested by the Trustee to provide the
Collateral Agent with a fully perfected Lien on or security interest in the
Property being received by the Company or any of the Guarantors in connection
with any such Asset Swap to the same extent as the Lien or security interest
which the Collateral Agent had in the Property being exchanged by the Company or
any of its Subsidiaries.
With respect to any Asset Sale Proceeds in the form of cash or
Temporary Cash Investments (including cash collected on any notes), and any
Insurance Proceeds or Condemnation Proceeds related to Collateral which are not
applied to the repair, rebuilding, restoration or replacement of the Collateral
affected by the subject Loss Event, (in any such case, the "Collateral Proceeds
Amount"), the Company shall (i) first, to the extent the Company elects (or is
required by the terms of any Indebtedness), prepay, repay, redeem or purchase
Senior Indebtedness of the Company or Senior Indebtedness of a Wholly-Owned
Subsidiary (in each case, other than Indebtedness owed to the Company or an
Affiliate of the Company) within 365 days from the later of the date of such
Asset Sale or the receipt of such Collateral Proceeds Amount; provided, however,
that in connection with any prepayment, repayment or purchase of Senior
Indebtedness pursuant to this clause (i), the Company or such Wholly-Owned
Subsidiary will retire such Indebtedness and will cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased; (ii) second, to the extent the
Company elects, apply the Collateral Proceeds Amount to acquire Property
(provided that, in the case of an Asset Sale of Property constituting Collateral
under the Intercreditor Agreement, the Company shall cause such Property to
become Collateral under the Intercreditor Agreement as and when received by the
Company or by any of its Subsidiaries), that is useful in any business in which
the Company is permitted to be engaged within 365 days from the later of the
date of such Asset Sale or the receipt of such Collateral Proceeds Amount; and
(iii) third, make an offer (a "Collateral Proceeds Offer") for up to a maximum
principal amount (expressed as an integral multiple of $1,000) of Senior Notes
equal to the Collateral Proceeds Amount to the extent of the balance of such
Collateral Proceeds Amount after application in accordance with clauses (i) and
(ii), at a purchase price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of purchase in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate principal amount of Senior Notes tendered pursuant to such
Collateral Proceeds Offer is less than the Collateral Proceeds Amount, the
Company may use such portion of the Collateral Proceeds Amount that is not used
to purchase Senior Notes tendered for general corporate purposes not
inconsistent with the Senior Notes or this Indenture. If the aggregate
principal amount of the
37
Senior Notes tendered pursuant to such Collateral Proceeds Offer is more than
the Collateral Proceeds Amount, the Senior Notes tendered will be repurchased
on a pro rata basis or by such other method as the Trustee shall deem fair and
appropriate. Upon the completion of any Collateral Proceeds Offer and the
closing of any repurchase of Senior Notes tendered pursuant to such Collateral
Proceeds Offer, the amount of Collateral Proceeds Amount shall be deemed to be
zero.
Pending their use as hereinabove prescribed, all Asset Sale Proceeds
from Asset Sales of Property constituting Collateral, Insurance Proceeds and
Condemnation Proceeds from Loss Events and non-cash consideration from Asset
Sales of Property constituting Collateral, including all Collateral Proceeds
Amounts, shall be (i) subject to the perfected second priority Lien in favor of
the Trustee subject to Liens permitted under the Collateral Documents in respect
of the relevant item of Collateral, and (ii) held in trust for the benefit of
the holders of the Senior Notes and the Trustee.
If the Company is required to make a Collateral Proceeds Offer, the
Company shall mail, within 30 days following the date on which the Company
receives any Collateral Proceeds Amounts, notice to the holders of the Senior
Notes stating, among other things: (1) that such holders have the right to
require the Company to apply the Collateral Proceeds Amount to repurchase such
Senior Notes at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase; (2)
the purchase date, which shall be no earlier than 30 days and not later than 60
days from the date such notice is mailed; (3) the instructions, determined by
the Company, that each holder of Senior Notes must follow in order to have such
Senior Notes repurchased; and (4) the calculations used in determining the
amount of Collateral Proceeds Amount to be applied to the repurchase of such
Senior Notes.
In the event of the transfer of substantially all (but not all) of the
assets of the Company or any Subsidiary of the Company or substantially all (but
not all) of the assets of any division or line of business of the Company or any
Subsidiary of the Company as an entirety to a Person in a transaction or series
of related transactions permitted under Section 5.1 hereof, the successor
corporation shall be deemed to have sold the assets of the Company, the
Subsidiary or the division or line of business, as the case may be, not so
transferred for purposes of this covenant, and shall comply with the provisions
of this covenant with respect to such deemed sale as if it were an Asset Sale.
In addition, the fair market value of such assets of the Company, the Subsidiary
or the division or line of business, as the case may be, deemed to be sold shall
be deemed to be Asset Sale Proceeds for purposes of this covenant.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
prepayment, repayment, redemption or the repurchase of Senior Notes with the
Asset Sale Proceeds as required herein.
To the extent that the provisions of any securities laws or regulations
conflict with provisions of this covenant, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this covenant by virtue thereof.
38
SECTION 4.9. Limitation on Transactions with Affiliates. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into or suffer to exist any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the Company
(including any Affiliate in which the Company or any Subsidiary thereof owns a
minority interest) or holder of 10% or more of the Company's Equity Interests
(each such transaction, an "Affiliate Transaction") or extend, renew, waive or
otherwise modify the terms of any Affiliate Transaction entered into prior to
the Issue Date unless (i) such Affiliate Transaction is solely between or among
the Company and its Wholly-Owned Subsidiaries; (ii) such Affiliate Transaction
is solely between or among Wholly-Owned Subsidiaries of the Company; (iii) such
Affiliate Transaction is for reasonable fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any Subsidiary thereof as reasonably determined in good faith
by the Board of Directors (when required as described below) or senior
management of the Company or of such Subsidiary having no interest in such
Affiliate Transaction; or (iv) the terms of such Affiliate Transaction are fair
and reasonable to the Company or such Subsidiary, as the case may be, and the
terms of such Affiliate Transaction are at least as favorable as the terms which
could be obtained by the Company or such Subsidiary, as the case may be, in a
comparable transaction made on an arm's-length basis between unaffiliated
parties. In any Affiliate Transaction involving an amount or having a value in
excess of $5 million in any one year which is not permitted under clause (i) or
(ii) above, the Company or such Subsidiary, as the case may be, must obtain a
resolution of an independent committee of its Board of Directors certifying that
such Affiliate Transaction complies with clause (iii) or (iv) above, as the case
may be.
The foregoing provisions will not apply to (i) the payment of
reasonable annual compensation to directors or executive officers of the
Company, and (ii) the continued performance of transactions with Affiliates
disclosed in the Plan of Reorganization, on the same terms as disclosed in the
Plan of Reorganization.
SECTION 4.10. Limitations on Liens. The Company will not, and will not
permit any of its Subsidiaries to, create, incur or otherwise cause or suffer to
exist or become effective any Liens of any kind (other than Permitted Liens)
upon any property or asset of the Company or any Subsidiary or any shares of
stock or debt of any Subsidiary which owns property or assets, now owned or
hereafter acquired, or any income or profits therefrom, unless (i) if such Lien
secures Indebtedness which is pari passu with the Senior Notes, then the Senior
Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligations are no longer secured by a Lien or (ii) if
such Lien secures Subordinated Indebtedness, any such Lien shall be subordinated
to a Lien on such property or asset or shares of stock or debt granted to the
Holders of the Senior Notes to the same extent as such Subordinated Indebtedness
is subordinated to the Senior Notes.
SECTION 4.11. Limitations on Investments. The Company will not, and
will not permit any of its Subsidiaries to, make any Investment other than (i) a
Permitted Investment or (ii) an Investment that is made as a Restricted Payment
in compliance with Section 4.7 hereof.
SECTION 4.12. Future Subsidiary Guarantors. The Company shall cause
each Subsidiary created or acquired, directly or indirectly, by the Company
(other than PHCMI
39
Debtors) to execute a Guarantee in the form included as part of Exhibit A to
this Indenture and reasonably satisfactory in form and substance to the Trustee
(and with documentation relating thereto as the Trustee shall require,
including, without limitation, a supplement or amendment to this Indenture and
an Opinion of Counsel as to the enforceability of such Guarantee); provided that
such Subsidiary shall not be required to execute such a Guarantee if such
Subsidiary is an Unrestricted Subsidiary, is prohibited by law from making such
a Guarantee, such Subsidiary would have been released from its guarantee by
virtue of events set forth in Section 11.4 hereof, such Subsidiary is a
Subsidiary of a Person which has been released as a guarantor pursuant to
Section 11.4 hereof, or such Subsidiary is not obligated to execute a Guarantee
pursuant to Section 11.5 hereof.
SECTION 4.13. Designation of Subsidiaries and Unrestricted
Subsidiaries. (a) The Company may by written notice to the Trustee designate any
Subsidiary (including a newly acquired or newly formed Subsidiary (including any
such Subsidiary formed in connection with a Permitted Mortgage Financing)) to be
an Unrestricted Subsidiary; provided, however, that other than with respect to a
Subsidiary formed in connection with a Permitted Mortgage Financing (i) no
Default or Event of Default shall have occurred and be continuing or would arise
therefrom, (ii) such designation is at that time permitted under Section 4.7
hereof and (iii) immediately after giving effect to such designation, the
Company could incur $1.00 of additional Indebtedness pursuant to the first
paragraph of Section 4.6. In the event the Company designates a Subsidiary to be
an Unrestricted Subsidiary, the following provisions shall apply:
(i) (A) an "Investment" shall be deemed to have been made at
the time any Subsidiary is designated as an Unrestricted Subsidiary in an amount
(proportionate to the Company's percentage Equity Interest in such Subsidiary)
equal to the net worth of such Subsidiary at the time that such Subsidiary is
designated as an Unrestricted Subsidiary;
(ii) (B) at any date the aggregate of all Restricted Payments
made as Investments since the Issue Date shall exclude and be reduced by an
amount (proportionate to the Company's percentage Equity Interest in such
Subsidiary) equal to the net worth of any Unrestricted Subsidiary at the time
that such Unrestricted Subsidiary is designated a Subsidiary, not to exceed, in
the case of any such redesignation of an Unrestricted Subsidiary as a
Subsidiary, the amount of Investments previously made by the Company and its
Subsidiaries in such Unrestricted Subsidiary; and
(iii) (C) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
(iv) For purposes of clauses (A) and (B) above, "net worth"
shall be calculated based upon the fair market value of the assets of such
Subsidiary as of any such date of designation.
(b) Notwithstanding clause (a) above, the Board of Directors of the
Company may not designate any Subsidiary of the Company to be an Unrestricted
Subsidiary if, after such designation:
40
(i) the Company or any Subsidiary provides credit support
for, or a guarantee of, any Indebtedness or other obligation (contingent or
otherwise) of such Subsidiary (including any understanding, agreement or
instrument evidencing such Indebtedness or obligation) or is otherwise subject
to recourse or obligated thereunder or therefor, unless such credit support or
guarantee is permitted by the terms of this Indenture;
(ii) a default with respect to any Indebtedness of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Subsidiary of the Company to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity;
(iii) such Subsidiary owns any Equity Interests in, or owns or
holds any Lien on any property of, any Subsidiary which is not a Subsidiary of
the Subsidiary to be so designated;
(iv) such Subsidiary has any contract, arrangement, agreement
or understanding with the Company, or any Subsidiary of the Company, whether
written or oral, other than a transaction having terms no less favorable to the
Company or such Subsidiary of the Company than those which might be obtained at
the time from persons who are not Affiliates of the Company; or
(v) the Company or any Subsidiary of the Company has any
obligation to subscribe for any Equity Interest in such Subsidiary or to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve specified levels of operating results, unless such
obligation is permitted by the terms of this Indenture.
SECTION 4.14. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Company will not, and will not permit any of its
Subsidiaries 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 of its Subsidiaries to (a) pay dividends or make any other
distributions in cash or otherwise on its Equity Interests to the Company or any
Subsidiary, (b) pay any Indebtedness owed to the Company or any Subsidiary, (c)
make loans or advances to the Company or any Subsidiary thereof, (d) transfer
any of its properties or assets to the Company or any Subsidiary thereof (other
than customary restrictions on transfer of property subject to a Permitted Lien
under the term of the agreements creating such Permitted Lien (other than a Lien
on cash not constituting proceeds of non-cash property subject to a Permitted
Lien) which would not materially adversely affect the Company's ability to
satisfy its obligations under the Senior Notes), or (e) guarantee any
Indebtedness of the Company or any Subsidiary of the Company, except, in each
case, for such encumbrances or restrictions existing under or contemplated by
reason of (i) the Senior Notes or this Indenture, (ii) any restrictions existing
under or contemplated by agreements evidencing any Senior Indebtedness, (iii)
any restrictions which are in existence on the Issue Date or which exist with
respect to a Person that becomes a Subsidiary on or after the Issue Date, which
are in existence at the time such Person becomes a Subsidiary of the Company
(but not created in connection with or contemplation of such Person becoming a
Subsidiary of the Company and which
41
encumbrance or restriction is not applicable to any Person or the property or
assets of any Person other than such Person or the property or assets of such
Person so acquired) and any agreement that refinances or replaces the same;
provided, however, that the terms and conditions of any such restrictions are
not materially less favorable in the aggregate to the holders of the Senior
Notes than those under or pursuant to the agreement being replaced or the
agreement evidencing the Indebtedness refinanced or replaced, (iv) customary
non-assignment provisions in any contract or licensing agreement entered into by
the Company or any Subsidiary of the Company in the ordinary course of business
or in any lease governing any leasehold interest of the Company or a Subsidiary,
(v) any restrictions existing under or contemplated by agreements evidencing any
Purchase Money Indebtedness that impose restrictions on the ability of any of
the Company or its Subsidiaries to transfer the property so acquired to the
Company or its Subsidiaries and (vi) any restrictions existing under or
contemplated by agreements evidencing any Refinancing Indebtedness, providing
that the restrictions contained in the agreements governing such Refinancing
Indebtedness are no more restrictive in whole than those contained in the
agreements governing the Indebtedness being refinanced.
SECTION 4.15. Restriction on Sale and Issuance of Certain Subsidiary
Equity Interests. The Company and its Subsidiaries will not issue or sell any
Equity Interests of any Subsidiary to any person other than the Company or a
Wholly-Owned Subsidiary of the Company (except for common Equity Interests with
no preferences or special rights or privileges and with no redemption or
prepayment provisions, provided that such common Equity Interests are sold in
compliance with Section 4.8 and immediately after giving effect to such issuance
or sale, such Subsidiary either continues to be a Subsidiary or if such
Subsidiary would no longer be considered a Subsidiary, then the investment of
the Company in such Person (after giving effect to such issuance or sale) would
have been permitted to be made under Section 4.7 as if made on the date of such
issuance or sale).
SECTION 4.16. Limitation on Sale and Lease-Back Transactions. The
Company will not, and will not permit any of its Subsidiaries to, enter into any
Sale and Lease-Back Transaction (other than a Permitted Mortgage Financing)
unless (i) the consideration received in such Sale and Lease-Back Transaction is
at least equal to the fair market value of the property sold and (ii)
immediately prior to and after giving effect to the Attributable Indebtedness in
respect of such Sale and Lease-Back Transaction, the Company could incur at
least $1.00 of additional Indebtedness pursuant to the first paragraph of
Section 4.6.
SECTION 4.17. Line of Business. The Company will not, and will not
permit any of its Subsidiaries to, engage in any business other than any
Healthcare Related Business or any other business determined by the Company's
Board of Directors, in good faith, to be reasonably related to the foregoing.
SECTION 4.18. Limitation on Status as Investment Company. Neither the
Company nor any of its Subsidiaries will take any action or suffer to exist any
condition that would require the Company or any of its Subsidiaries to register
as an "investment company" (as that term is defined in the Investment Company
Act of 1940, as amended), or otherwise become subject to regulation as an
investment company.
42
SECTION 4.19. Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, and the corporate, partnership
or other existence of each Subsidiary, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and its Subsidiaries; provided, however, that the Company shall not
be required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole.
SECTION 4.20. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York an office or agency
where Senior Notes may be surrendered for registration of transfer or exchange
or for presentation for payment and where notices and demands to or upon the
Company in respect of the Senior Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee as set
forth in Section 12.2.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company shall give prompt written notice to the Trustee of such designation
or rescission and of any change in the location of any such other office or
agency; provided, however, that no such designation or rescission shall relieve
the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes.
The Company initially appoints the Trustee as Registrar, Paying Agent
and Agent for service of notices and demands in connection with the Senior Notes
and this Indenture.
SECTION 4.21. Maintenance of Insurance; Books and Records; Compliance
with Laws. (a) The Company and each of its Subsidiaries shall provide or cause
to be provided, for itself and each of their respective Subsidiaries, insurance
(including appropriate self - insurance) that is adequate and appropriate for
the conduct of the business of the Company and such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary for and available to
businesses similarly situated in the industry.
(b) The Company shall and shall cause each of its subsidiaries to
keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the Company
and each Subsidiary of the Company, in accordance with GAAP consistently applied
to the Company and its Subsidiaries taken as a whole.
43
(c) The Company shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances, or government rules and regulations
to which they are subject, noncompliance with which would materially adversely
affect the business, prospects, earnings, properties, assets or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 4.22. Further Assurances to the Trustee. The Company shall (and
shall cause each of its Subsidiaries to) execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as may be required from time to time in order (i) to carry out more
effectively the purposes of the Collateral Documents, (ii) to subject to the
Liens created by any of the Collateral Documents any of the properties, rights
or interest required to be encumbered thereby, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and the
Liens intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Trustee any of the rights
granted or now or hereafter intended by the parties thereto to be granted to the
Trustee or under any other instrument executed in connection therewith or
granted to the Company under the Collateral Documents or under any other
instrument executed in connection therewith.
SECTION 4.23. Collateral Documents. None of the Company or any of its
Subsidiaries will amend, waive or modify, or take or refrain from taking any
action that has the effect of amending, waiving or modifying, any provision of
the Collateral Documents or engaging in any transfer of assets from a company
whose capital stock and assets constitute Collateral or any restructuring of the
affairs of such a company and its subsidiaries to the extent that such
amendment, waiver, modification, action or restructuring could have an adverse
effect on the rights of the Trustee or the Holders, provided that (i) the
Collateral may be released or modified in an Asset Sale as expressly authorized
in this Indenture or in the Collateral Documents; (ii) any Guarantee and pledges
may be released in an Asset Sale as expressly provided in this Indenture or in
the Collateral Documents; and (iii) this Indenture and any of the Collateral
Documents may be otherwise amended, waived or modified as set forth under
Article 10 hereof.
SECTION 4.24. Subsidiary Guarantees. Prior to guaranteeing any other
Indebtedness of the Company, a Subsidiary of the Company that is not a Guarantor
must execute and deliver to the Trustee a supplemental indenture in the form of
Exhibit D hereto pursuant to which such Subsidiary shall guarantee, on an
unsecured senior basis, all of the Obligations of the Company with respect to
the Senior Notes together with an opinion of counsel (which counsel may be an
employee of the Company) to the effect that the supplemental indenture has been
duly executed and delivered by such Subsidiary and is in compliance in all
material respects with the terms of this Indenture.
44
ARTICLE 5
Successor Corporation
SECTION 5.1. Merger, Consolidation or Sale of Assets. The Company will
not consolidate with, merge with or into, or sell, assign, lease, convey,
transfer or otherwise dispose of (a "transfer") all or substantially all of its
assets (as an entirety or substantially as an entirety in one transaction or a
series of related transactions), to any Person unless: (i) the Company shall be
the continuing Person, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which the properties and
assets of the Company are transferred shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
of the obligations of the Company under the Senior Notes, this Indenture and the
Collateral Documents, and the obligations under this Indenture shall remain in
full force and effect; (ii) immediately before and immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing; (iii) immediately after giving effect to such transaction on
a pro forma basis the Company or such Person could incur at least $1.00
additional Indebtedness pursuant to the first paragraph of Section 4.6 hereof;
and (iv) immediately thereafter, the Company or the other surviving entity, as
the case may be, shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately prior to such transaction.
(a) In connection with any consolidation, merger or transfer of
assets contemplated by this Section 5.1, the Company shall deliver or cause to
be delivered, to the Trustee, in form and substance reasonably satisfactory to
the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and the supplemental indenture in
respect thereto comply with this Section 5.1 and that all conditions precedent
herein provided for relating to such transaction or transactions have been
complied with.
(b) This Section 5.1 shall not apply to the sale of the stock or
assets of the Company or any Subsidiary of the Company in accordance with
Section 4.8 hereof.
SECTION 5.2. Successor Person Substituted. Upon any consolidation or
merger, or any transfer of all or substantially all of the assets of the Company
or any Subsidiary in accordance with Section 5.1 above, the successor
corporation formed by such consolidation or into which the Company or any
Subsidiary is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Subsidiary under this Indenture with the same effect as if such successor
corporation had been named as the Company or such Subsidiary herein, and
thereafter the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Senior Notes, except, in the case of a
transfer, for the obligation to pay the principal of, and interest on, the
Senior Notes.
45
ARTICLE 6
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) there is a default in the payment of any
principal of, or premium, if any, on the Senior Notes when the same becomes due
and payable on the Maturity Date, upon optional redemption, upon required
repurchase, upon declaration or otherwise;
(2) default for 30 days in the payment of any
interest on the Senior Notes after such interest becomes due and payable;
(3) the Company or any Guarantor fails to comply
with any of the terms or provisions of Section 5.1 hereof;
(4) the Company or any Guarantor defaults in the
observance or performance of any other provision, covenant or agreement
contained in the Senior Notes, this Indenture or the Collateral Documents for 30
days after written notice from the Trustee or the holders of not less than 25%
in aggregate principal amount of the Senior Notes then outstanding;
(5) there is a failure to pay when due
principal, interest or premium in an aggregate amount of $10 million or more
with respect to any Indebtedness of the Company or any Subsidiary thereof, or
the acceleration prior to its express maturity of any such Indebtedness
aggregating $10 million or more;
(6) a court of competent jurisdiction renders a
final judgment or judgments which can no longer be appealed for the payment of
money in excess of $5 million (which are not paid or covered by third party
insurance by financially sound insurers) against the Company or any Subsidiary
thereof and such judgment remains undischarged for a period of 60 consecutive
days during which a stay of enforcement of such judgment shall not be in effect;
(7) the Company or any Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or
proceeding,
(B) consents to the entry of an order
for relief against it in an involuntary case or
proceeding,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property,
(D) makes a general assignment for the
benefit of its creditors or shall admit in writing
its inability to pay its debt, or
(E) generally is not paying its debts
as they become due;
46
(8) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company
or any Subsidiary in an involuntary case or
proceeding,
(B) appoints a Custodian of the Company
or any Subsidiary or for all or substantially all of
the property of the Company or any Subsidiary, or
(C) orders the liquidation of the
Company or any Subsidiary
(D) and, in each case, the order or
decree remains unstayed and in effect for 60
consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors as in effect from time to time.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
(9) At any time after the execution and delivery
thereof, (i) any Guarantee for any reason, other than the satisfaction in full
of all Obligations guaranteed thereunder or the release of such Guarantee
pursuant to Section 11.4, shall cease to be in full force and effect (other than
in accordance with its terms) or shall be declared to be null and void, or (ii)
a material Collateral Document shall cease to be in full force and effect (other
than by reason of a release of Collateral thereunder in accordance with the
terms hereof or thereof, the satisfaction in full of the Obligations or any
other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void, or the Trustee or the
Collateral Agent shall not have or shall cease to have a valid and perfected
second priority Lien on any Collateral purported to be covered thereby having a
fair market value, individually or in the aggregate, exceeding $2,500,000, in
each case for any reason other than the failure of the Trustee or the Collateral
Agent to take any action within its control.
(10) Holders of Senior Indebtedness holding a
Lien on the stock or assets of the Company or any of its Subsidiaries take any
judicial action to enforce such Lien.
Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall
not be charged with knowledge of any Default or Event of Default unless written
notice thereof shall have been given to a Trust Officer at the Corporate Trust
Office by the Company or any other Person.
SECTION 6.2. Acceleration. If an Event of Default (other than an
Event of Default arising under Section 6.1(7) or (8) occurs and is continuing,
the Trustee by notice to the Company or the Holders of not less than 25% in
aggregate principal amount of the Senior Notes then outstanding by written
notice to the Company and the Trustee may declare to be immediately due and
payable the entire principal amount of all the Senior Notes then outstanding
plus premium, if any, and accrued interest to the date of acceleration;
provided, however, that after such acceleration but before a judgment or decree
based on such acceleration is obtained by the Trustee, the Holders of 51% in
aggregate principal amount of the outstanding Senior Notes may rescind and annul
such acceleration if all existing Events of Default, other than nonpayment
47
of accelerated principal, premium, if any, or interest, have been cured or
waived as provided in this Indenture and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
In case an Event of Default specified in Section 6.1(7) or (8) occurs,
the principal, premium, if any, and interest amount with respect to all of the
Senior Notes shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or the Holders of the
Senior Notes.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, or premium, if any, and
interest on the Senior Notes or to enforce the performance of any provision of
the Senior Notes or this Indenture and may take any necessary action requested
of it as Trustee to settle, compromise, adjust or otherwise conclude any
proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Noteholder 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 is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.4. Waiver of Defaults and Events of Default. Subject to
Sections 6.2, 6.7 and 8.2 hereof, the Holders of a majority in principal amount
of the Senior Notes then outstanding have the right to waive any existing or
future Default or Event of Default or compliance with any provision of this
Indenture or the Senior Notes. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto except as specifically set forth therein.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Senior Notes then outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee by this
Indenture. The Trustee, however, may refuse to follow any direction that
conflicts with law, this Indenture or the Collateral Documents or that the
Trustee determines may be unduly prejudicial to the rights of another Noteholder
not taking part in such direction, and the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken or if the
Trustee in good faith shall determine that the proceedings so directed may
involve it in personal liability unless the Trustee has asked for and received
indemnification reasonably satisfactory to it against any loss, liability or
expense caused by its following such direction; provided that the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
48
SECTION 6.6. Limitation on Suits. Subject to Section 6.7 below, a
Noteholder may not institute any proceeding or pursue any remedy with respect to
this Indenture or the Senior Notes unless:
(1) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 51 % in aggregate
principal amount of the Senior Notes then outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer, and if
requested, provide to the Trustee indemnity reasonably satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60 day period by the
Holders of a majority in aggregate principal amount of the Senior Notes
then outstanding.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Senior Note
to receive payment of principal of, or premium, if any, and interest on the
Senior Note on or after the respective due dates expressed in the Senior Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in Section 6.1(1) or (2)
hereof occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company or the Guarantors
(or any other obligor on the Senior Notes) for the whole amount of unpaid
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate then
borne by the Senior Notes (after giving effect to Section 4.1), and such further
amounts as shall be sufficient to cover the costs and expenses of collection,
including the compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, including all sums due and owing to the Trustee pursuant
to the Indenture including Section 7.7.
SECTION 6.9. 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 (including any claim for
the compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and the Noteholders allowed in any judicial
49
proceedings relative to the Company or the Guarantors (or any other obligor upon
the Senior Notes), their respective creditors or property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same after deduction of its
reasonable charges and expenses to the extent that any such charges and expenses
are not paid out of the estate in any such proceedings and any custodian in any
such judicial proceeding is hereby authorized by each Noteholder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay to the Trustee any
amount due to it for the compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
the Indenture, including without limitation Section 7.7 hereof. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Noteholder any plan or reorganization,
arrangement, adjustment or composition affecting the Senior Notes or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Noteholder in any such proceedings.
SECTION 6.10. Priorities. If the Trustee collects any money
pursuant to this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee, its agents and counsel for amounts due under
the Indenture, including without limitation, Section 7.7 hereof;
SECOND: to Noteholders for amounts due and unpaid on the Senior Notes
for principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Senior Notes; and
THIRD: to the Company or, to the extent the Trustee collects any
amount from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. The Trustee shall give the Company
prior notice of any such record date and payment date; provided, however, that
the failure to give any such notice shall not affect the establishment of such
record date or payment date or any payment to Noteholders pursuant to this
Section 6.10.
SECTION 6.11. 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 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 hereof or a
suit by Holders of more than 10% in principal amount of the Senior Notes then
outstanding.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee
or any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined
50
adversely to the Trustee or to such Holder, then and in every case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 6.13. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE 7
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and any supplemental indenture (including
providing for Guarantees of the Senior Notes and any supplemental indenture
required pursuant to Section 4.24 hereof) and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the same
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default
known to the Trustee:
(1) The Trustee need perform only those duties
that are specifically set forth in this Indenture (including any supplemental
indenture) and the Collateral Documents and those actions that are reasonably
necessary for the performance of the specified duties and no others and no
implied covenants or obligations shall be read into this Indenture or the
Collateral Documents against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture
but, in the case of any such certificates or opinions which by any provision
hereof are specifically required 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 and the Collateral Documents (but
need not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
51
(2) In the absence of bad faith on its part, the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 6.2 and 6.5 hereof.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(e) Whether or not therein expressly so provided,
paragraphs (a), (b), (c), (d), (f) and (g) of this Section 7.1 shall govern
every provision of this Indenture that in any way relates to the Trustee or any
Agent.
(f) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability, expense or fee.
(g) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the Company
or any Guarantor. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by the law.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1 hereof
(1) The Trustee may conclusively rely on and shall be
protected in acting or refraining from acting upon any document reasonably
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document;
(2) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed by it with
due care;
(3) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; provided that the Trustee's conduct
does not constitute negligence or bad faith;
(4) The Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel as to matters of law shall
be full and complete authorization and protection from liability in respect of
any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel;
(5) Before the Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel, or both;
52
(6) The Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(7) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture;
(8) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder; and
(9) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior Notes
and may make loans to, accept deposits from, perform services for or otherwise
deal with the Company or any Guarantor, or any Affiliates thereof, with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4. Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture, the Collateral
Documents, the Senior Notes or any Guarantee, it shall not be accountable for
the Company's use of the proceeds from the sale of Senior Notes or any money
paid to the Company pursuant to the terms of this Indenture or the Collateral
Documents, and it shall not be responsible for any statement in the Senior Notes
or any document used in connection with the sale of the Senior Notes other than
its certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to each Noteholder 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 or premium, if any, or interest on the Senior Notes, or that
resulted from the failure of the Company to comply with Section 5.1, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines it to be in the best interests of the holders of the
Senior Notes to do so.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA
Section 313(a), within 60 days after March 15 of any year, commencing the March
15 following the date of this Indenture, the Trustee shall mail to each
Noteholder a brief report dated as of such March 15 that
53
complies with TIA Section 313(a); provided that no such report need be
transmitted if no such events listed in TIA Section 313(a) have occurred within
such period. The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c) and TIA Section 313(d).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which the Senior Notes are
listed. The Company shall promptly notify the Trustee when the Senior Notes are
listed on, or delisted from, any stock exchange and the Trustee shall comply
with TIA Section 313(d).
SECTION 7.7. Compensation and Indemnity. The Company and the
Guarantors (on a joint and several basis) shall pay to the Trustee from time to
time such compensation as shall be agreed in writing between the Company and the
Trustee (or in the absence of such an agreement, reasonable compensation) for
its services hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust). The
Company and the Guarantors (on a joint and several basis) shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in connection with its duties under this Indenture,
including the compensation, disbursements and expenses of the Trustee's agents
and counsel.
The Company and the Guarantors (on a joint and several basis) shall
indemnify each of the Trustee and any predecessor Trustee for, and hold them
harmless against, any and all loss, damage, claim, liability, expense (including
but not limited to attorneys' fees and expenses) or taxes (other than taxes
based on the income of the Trustee) incurred by it in connection with the
acceptance or performance of its duties under this Indenture including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder
(including, without limitation, settlement costs). The Trustee shall notify the
Company and the Guarantors in writing promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee to
so notify the Company and the Guarantors shall not relieve the Company or the
Guarantors of their obligations hereunder.
Notwithstanding the foregoing, the Company and the Guarantors need not
reimburse the Trustee for any expense or indemnify it against any loss or
liability incurred by the Trustee through its negligence or bad faith. To secure
the payment obligations of the Company and the Guarantors in this Indenture,
including without limitation, Sections 7.7 and 9.5, the Trustee and any
predecessor Trustee shall have a lien prior to the Senior Notes and the Senior
Indebtedness on all money or property held or collected by the Trustee in its
capacity as such, except such money or property held in trust to pay principal
of and interest on particular Senior Notes. The obligations of the Company and
the Guarantors under this Section 7.7 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 be joint and
several liabilities of the Company and each of the Guarantors and shall survive
the satisfaction and discharge of this Indenture, including the termination or
rejection hereof in any bankruptcy proceeding to the extent permitted by law.
54
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(7) or (8) hereof occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign by so
notifying the Company and the Guarantors in writing, such resignation to become
effective upon the appointment of a successor Trustee. The Holders of a majority
in principal amount of the outstanding Senior Notes may remove the Trustee by
notifying the removed Trustee in writing and may appoint a successor Trustee
with the Company's written consent which consent shall not be unreasonably
withheld. The Company may remove the Trustee at its election if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 25% in principal amount of the outstanding Senior Notes may
petition any court of competent jurisdiction at the expense of the Company and
Guarantors, in the case of the Trustee, for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Noteholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the retiring Trustee shall, subject to its rights under Section
7.7 hereof, transfer all property held by it as Trustee to the successor
Trustee, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Company's obligations under Section
7.7 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Consolidation, Merger or
Conversion. If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation or national banking association, subject to Section 7.10 hereof, the
successor corporation or national banking association without any further act
shall be the successor Trustee.
55
SECTION 7.10. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310(a)(1)
and (2) in every respect. The Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA Section 310(b), including the
provision in Section 310(b)(1); provided that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or conflicts of interest or participation in other securities, of
the Company or the Guarantors are outstanding if the requirements for exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
SECTION 7.12. Paying Agents. The Company shall cause each Paying
Agent other than the Trustee to execute and deliver to it and the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 7.12:
(A) that it will hold all sums held by it as
agent for the payment of principal of, or premium, if any, or
interest on, the Senior Notes (whether such sums have been
paid to it by the Company or by any obligor on the Senior
Notes) in trust for the benefit of Holders of the Senior Notes
or the Trustee;
(B) that it will at any time during the
continuance of any Event of Default, upon written request from
the Trustee, deliver to the Trustee all sums so held in trust
by it together with a full accounting thereof; and
(C) that it will give the Trustee written notice
within three (3) Business Days of any failure of the Company
(or by any obligor on the Senior Notes) in the payment of any
installment of the principal of, premium, if any, or interest
on, the Senior Notes when the same shall be due and payable.
SECTION 7.13. Co-Trustee and Separate Trustees. At any time or
times, for the purpose of meeting the legal requirements of any applicable
jurisdiction, the Company and the Trustee shall have power to appoint, and, upon
the written request of the Trustee or of the Holders of at least 33% in
principal amount of the Securities then outstanding, the Company shall for such
purpose join with the Trustee in the execution and delivery of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the Trustee, or to act as
separate trustee, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons, in the
capacity aforesaid, and for the benefit of the Holders, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Company does not join in such appointment within 15 days
after the receipt by it of a request so to do, or if an Event of Default shall
have occurred and be continuing, the Trustee alone shall have power to make such
appointment.
56
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee to more fully confirm to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Company.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustee hereunder, shall be exercised solely,
by the Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed either
by the Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed singly by such co-trustee or
separate trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section,
and, it an Event of Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with the Trustee in the execution
and delivery of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or any other
such trustee hereunder, and the Trustee shall not be personally liable by reason
of any act or omission of any such co-trustee or separate trustee;
(e) any act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee;
(f) any separate trustee or co-trustee may at any time
appoint the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name; and
(g) if any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new
successor trustee.
57
ARTICLE 8
Amendments, Supplements and Waivers
SECTION 8.1. Without Consent of Holders. The Company and/or one
or more Guarantors and the Trustee may modify, waive, amend or supplement this
Indenture, the Senior Notes, the Guarantees or the Collateral Documents without
notice to or consent of any Noteholder:
(1) to comply with Section 5.1 hereof;
(2) to provide for uncertificated Senior Notes in
addition to or in place of certificated Senior Notes;
(3) to comply with any requirements of the SEC under the
TIA;
(4) to cure any ambiguity, defect or inconsistency, or to
make any other change that does not adversely affect the rights of any
Noteholder;
(5) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Senior Notes;
(6) to enter into additional or supplemental Collateral
Documents consistent with the terms hereof;
(7) to adjust the aggregate principal amount of Senior
Notes permitted to be issued pursuant to this Indenture so that the aggregate
principal amount of Senior Notes permitted to be issued pursuant to this
Indenture are as provided in the Plan of Reorganization;
(8) to reflect the terms of any agreements with creditors
of the Company and its Subsidiaries entered into pursuant to the Plan of
Reorganization or otherwise approved by the Bankruptcy Court in the Cases, or to
otherwise comply with the terms of the Plan of Reorganization;
(9) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein conferred upon
the Company;
(10) to make any change that would provide any additional
rights or benefits to the Holders of the Senior Notes (including providing for
Guarantees of the Senior Notes and any supplemental indenture required pursuant
to Section 4.24 hereof) or that does not adversely affect the legal rights under
this Indenture of any such Holder; or
(11) to add any additional Events of Default.
The Trustee is hereby authorized to join with the Company and the
Guarantors, if any, in the execution of any modification, waiver, amendment or
supplement to this Indenture, the Senior Notes, the Guarantees or the Collateral
Documents authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be
58
therein contained, but the Trustee shall not be obligated to enter into any such
modification, waiver, amendment or supplement to this Indenture, the Senior
Notes, the Guarantees or the Collateral Documents which adversely affects its
own rights, duties or immunities under this Indenture.
SECTION 8.2. With Consent of Holders. The Company and/or one or
more Guarantors and the Trustee may modify, amend, waive or supplement this
Indenture, the Senior Notes, the Guarantees or the Collateral Documents with the
written consent of the Holders of not less than a majority in aggregate
principal amount of outstanding Senior Notes. The Holders of not less than a
majority in aggregate principal amount of outstanding Senior Notes may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Senior Notes. Subject to Section 8.4, without the consent of
each Noteholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.4, may not:
(1) reduce the amount of Senior Notes whose Holders must
consent to an amendment, modification, supplement or waiver to this Indenture or
the Senior Notes;
(2) reduce the rate of or change the time for payment of
interest on any Senior Note;
(3) reduce the principal of or premium on or change the
stated maturity of any Senior Note;
(4) make any Senior Note payable in money other than that
stated in the Senior Note or change the place of payment from New York, New
York;
(5) change the amount or time of any payment required by
the Senior Notes;
(6) waive a default in the payment of the principal of,
or interest on, or redemption payment with respect to any Senior Note;
(7) subordinate in right of payment, or otherwise
subordinate, the Senior Notes or the Guarantees to another Indebtedness or
obligation of the Company or the Guarantors;
(8) take any other action otherwise prohibited by this
Indenture to be taken without the consent of each Holder affected thereby;
(9) release all or substantially all of the Collateral
from the Lien of this Indenture and the Collateral Documents (other than
pursuant to an Asset Sale in compliance with Section 4.8 hereof), or upon
payment in full of all Obligations of the Company hereunder and under the Senior
Notes; or
(10) modify this Section 8.2, Section 6.4 or 6.7.
After a modification, amendment, supplement or waiver under this
Section 8.2 becomes effective, the Company shall mail to the Holders a notice
briefly describing the modification,
59
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such modification, amendment, supplement or waiver.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, modification,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
SECTION 8.3. Compliance with Trust Indenture Act. Every amendment
to or supplement of this Indenture or the Senior Notes shall comply with the TIA
as then in effect.
SECTION 8.4. Revocation and Effect of Consents. Until a
modification, amendment, supplement, waiver or other action becomes effective, a
consent to it by a Holder of a Senior Note is a continuing consent conclusive
and binding upon such Holder and every subsequent Holder of the same Senior Note
or portion thereof, and of any Senior Note issued upon the transfer thereof or
in exchange therefor or in place thereof, even if notation of the consent is not
made on any such Senior Note. Any such Holder or subsequent Holder, however, may
revoke the consent as to his Senior Note or portion of a Senior Note, if the
Trustee receives the notice of revocation before the date the modification,
amendment, supplement, waiver or other action becomes effective. Notwithstanding
the foregoing, nothing in this paragraph shall impair the right of any Holder
under TIA Section 316(b).
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any modification,
amendment, supplement, or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such modification, amendment, supplement, or waiver or to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date unless the consent of the requisite
number of Holders has been obtained.
After a modification, amendment, supplement, waiver or other action
becomes effective, it shall bind every Holder and every subsequent Holder.
SECTION 8.5. Notation on or Exchange of Senior Notes. If a
modification, amendment, supplement or waiver changes the terms of a Senior
Note, the Trustee may request the Holder of the Senior Note to deliver it to the
Trustee. In such case, the Trustee shall place an appropriate notation on the
Senior Note about the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Senior Note shall issue and the Trustee shall authenticate a new security that
reflects the changed terms. Failure to make the appropriate notation or issue a
new Senior Note shall not affect the validity and effect of such modification,
amendment, supplement or waiver.
SECTION 8.6. Trustee to Sign Amendments, etc. The Trustee shall
sign any modification, amendment, supplement or waiver authorized pursuant to
this Article 8 if the modification, amendment, supplement or waiver 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
60
signing or refusing to sign such modification, amendment, supplement or waiver,
the Trustee shall be entitled to receive and, subject to Section 7.1 hereof,
shall be fully protected in relying upon an Officers' Certificate and an Opinion
of Counsel stating that such modification, amendment, supplement or waiver is
authorized or permitted by this Indenture and such supplemental indenture
constitutes the legal, valid and binding obligation of the Company and the
Guarantors enforceable against each of them in accordance with its terms
(subject to customary exceptions). The Company or any Guarantor may not sign a
modification, amendment or supplement until the Board of Directors of the
Company or such Guarantor, as appropriate, approves it.
ARTICLE 9
Discharge Of Indenture; Defeasance
SECTION 9.1. Discharge of Indenture. The Company and the
Guarantors, if any, may terminate their obligations under the Senior Notes, the
Guarantees, if any, and this Indenture, except the obligations referred to in
the last paragraph of this Section 9.1, if there shall have been cancelled by
the Trustee or delivered to the Trustee for cancellation all Senior Notes
theretofore authenticated and delivered (other than any Senior Notes that are
asserted to have been destroyed, lost or stolen and that shall have been
replaced as provided in Section 2.7 hereof) and the Company has paid all sums
payable by it hereunder or deposited all required sums with the Trustee.
After such delivery the Trustee upon request shall acknowledge in
writing the discharge of the Company's and the Guarantors' obligations under the
Senior Notes, the Guarantees and this Indenture except for those surviving
obligations specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company in Sections 2.7, 7.7, 9.5, 9.6 and 9.8 hereof shall
survive.
SECTION 9.2. Legal Defeasance. The Company may at its option, by
Board Resolution, be discharged from its obligations with respect to the Senior
Notes and the Guarantors, if any, discharged from their obligations under the
Guarantees, if any, on the date the conditions set forth in Section 9.4 below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Senior Notes and to have satisfied
all its other obligations under such Senior Notes and this Indenture insofar as
such Senior Notes are concerned (and the Trustee, at the expense of the Company,
shall, subject to Section 9.6 hereof, execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of outstanding
Senior Notes to receive solely from the trust funds described in Section 9.4
hereof and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Senior Notes when such
payments are due, (B) the Company's obligations with respect to such Senior
Notes under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8 and 4.20 hereof, (C) the
rights, powers, trusts, duties, and immunities of the Trustee hereunder
(including claims of, or payments to, the Trustee under or pursuant to Section
7.7 hereof) and (D) this Article 9. Subject to compliance with this Article 9,
the Company may exercise its option under
61
this Section 9.2 with respect to the Senior Notes notwithstanding the prior
exercise of its option under Section 9.3 below with respect to the Senior Notes.
SECTION 9.3. Covenant Defeasance. At the option of the Company,
pursuant to a Board Resolution, the Company and the Guarantors, if any, shall be
released from their respective obligations under Sections 4.2 through 4.4
hereof, inclusive, Sections 4.6 through 4.17 hereof, inclusive, and Section 4.23
and clauses (iii) and (iv) of Section 5.1 hereof with respect to the outstanding
Senior Notes on and after the date the conditions set forth in Section 9.4
hereof are satisfied (hereinafter, "Covenant Defeasance") and the Senior Notes
shall thereafter be deemed to not be outstanding for purposes of any direction,
waiver, consent, declaration or act of the Holders (and the consequences
thereof) in connection with such covenants but shall continue to be outstanding
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that the Company and the Guarantors, if any, may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section or portion thereof, whether directly or
indirectly by reason of any reference elsewhere herein to any such specified
Section or portion thereof or by reason of any reference in any such specified
Section or portion thereof to any other provision herein or in any other
document, but the remainder of this Indenture and the Senior Notes shall be
unaffected thereby.
SECTION 9.4. Conditions to Legal Defeasance or Covenant
Defeasance. The following shall be the conditions to application of Section 9.2
or Section 9.3 hereof to the outstanding Senior Notes:
(1) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7. 10 hereof who shall agree to comply with the
provisions of this Article 9 applicable to it) as funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Senior Notes, (A) money
in an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than the due date of any payment, money in an
amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of, premium, if any, and accrued interest on the
outstanding Senior Notes at the maturity date of such principal, premium, if
any, or interest, or on dates for payment and redemption of such principal,
premium, if any, and interest selected in accordance with the terms of this
Indenture and of the Senior Notes;
(2) no Event of Default or Default with respect to the
Senior Notes shall have occurred and be continuing on the date of such deposit,
or shall have occurred and be continuing at any time during the period ending on
the 91st day after the date of such deposit or, if longer, ending on the day
following the expiration of the longest preference period under any Bankruptcy
Law applicable to the Company in respect of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);
62
(3) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute default under any other
agreement or instrument to which the Company is a party or by which it is bound;
(4) the Company shall have delivered to the Trustee an
Opinion of Counsel stating that, as a result of such Legal Defeasance or
Covenant Defeasance, neither the trust nor the Trustee will be required to
register as an investment company under the Investment Company Act of 1940, as
amended;
(5) in the case of an election under Section 9.2 above,
the Company shall have delivered to the Trustee an Opinion of Counsel stating
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling to the effect that or (ii) there has been a
change in any applicable Federal income tax law with the effect that, and such
opinion shall confirm that, the Holders of the outstanding Senior Notes or
persons in their positions will not recognize income, gain or loss for Federal
income tax purposes solely as a result of such Legal Defeasance and will be
subject to Federal income tax on the same amounts, in the same manner, including
as a result of prepayment, and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(6) in the case of an election under Section 9.3 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Senior Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(7) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that (a) all
conditions precedent provided for relating to either the Legal Defeasance under
Section 9.2 above or the Covenant Defeasance under Section 9.3 hereof (as the
case may be) have been complied with and (b) if any other Indebtedness of the
Company shall then be outstanding, such legal defeasance or covenant defeasance
will not violate the provisions of the agreements or instruments evidencing such
Indebtedness; and
(8) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit under clause (1) was not made by
the Company with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company or others.
SECTION 9.5. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions. All money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 9.4 hereof in respect of the outstanding Senior Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Notes and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee may determine, to the Holders of such Senior Notes,
of all sums due and to become due thereon in respect of principal, premium, if
any, and accrued interest, but such money need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no duty
to invest such money or U.S. Government Obligations.
63
The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 9.4 hereof or the
principal, premium, if any, and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders
of the outstanding Senior Notes.
Subject to Sections 7.1 and 7.2 hereof, anything in this Article 9 to
the contrary notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon Company Request any money or U.S. Government Obligations
held by it as provided in Section 9.4 hereof which, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 9.6. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 9.1, 9.2 or 9.3 hereof 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 any Guarantor under this Indenture, the Senior Notes and the
Guarantees, if any, shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 9 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 9.1 hereof; provided, however, that if the Company or
any Guarantors have made any payment of principal of, premium, if any, or
accrued interest on any Senior Notes because of the reinstatement of their
obligations, the Company or such Guarantors, as the case may be, shall be
subrogated to the rights of the Holders of such Senior Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
SECTION 9.7. Moneys Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture, all moneys then held by any Paying
Agent under the provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee, or if sufficient moneys have been deposited pursuant to
Section 9.4 hereof, to the Company (or, if such moneys had been deposited by any
Guarantors, to such Guarantors), and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 9.8. Moneys Held by Trustee. Any moneys deposited with the
Trustee or any Paying Agent or then held by the Company or any Guarantors in
trust for the payment of the principal of, premium, if any, or interest on any
Senior Note that are not applied but remain unclaimed by the Holder of such
Senior Note for two years after the date upon which the principal of, or
premium, if any, or interest on such Senior Note shall have respectively become
due and payable shall be repaid to the Company (or, if appropriate, the
Guarantors) upon Company Request, or if such moneys are then held by the Company
or any Guarantors in trust, such moneys shall be released from such trust; and
the Holder of such Senior Note entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company and the
Guarantors, if any, for the payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Trustee or any such Paying Agent, before being
required to make any such repayment,
64
may, at the expense of the Company and the Guarantors, if any, either mail to
each Noteholder affected, at the address shown in the register of the Senior
Notes maintained by the Registrar pursuant to Section 2.3 hereof, or cause to be
published once a week for two successive weeks, in a newspaper published in the
English language, customarily published each Business Day and of general
circulation in the city of New York, New York, a notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Company. After payment to the
Company or the Guarantors, if any, or the release of any money held in trust by
the Company or any Guarantors, as the case may be, Noteholders entitled to the
money must look only to the Company and any Guarantors for payment as general
creditors unless applicable abandoned property law designates another person.
SECTION 9.9. Senior Note Collateral. Upon the Company's exercise
under Section 9.1 hereof of the option applicable under either Section 9.2 or
9.3, the Collateral shall be released pursuant to Section 10.3 hereof.
ARTICLE 10
Collateral And Security
SECTION 10.1. Security. The due and punctual payment of the
principal of, premium, if any, and interest on the Senior Notes when and as the
same shall be due and payable, whether on an Interest Payment Date, at maturity,
by acceleration, repurchase, redemption or otherwise, and interest on the
overdue principal of, premium, if any, and interest on the Senior Notes and
performance of all other obligations of the Company and the Guarantors to the
Holders of Senior Notes or the Trustee under this Indenture, the Senior Notes
and the Guarantees, according to the terms hereunder or thereunder, shall be
secured by the Collateral, as provided in the Collateral Documents which the
Company and the applicable parties have entered into simultaneously with the
execution of this Indenture for the benefit of the Holders of Senior Notes. Each
Holder of Senior Notes, by its acceptance thereof, consents and agrees to the
terms of the Collateral Documents (including, without limitation, the provisions
providing for foreclosure and release of Collateral) as the same may be in
effect or may be amended from time to time in accordance with its terms and
authorizes and directs the Trustee to enter into the Collateral Documents and to
perform its obligations and exercise its rights thereunder in accordance
therewith. The Company and the Guarantors shall deliver to the Trustee copies of
all documents executed pursuant to this Indenture and the Collateral Documents
and shall do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Collateral Documents to
assure and confirm to the Trustee the security interest in the Collateral
contemplated hereby, by the Collateral Documents or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Senior Notes and the Guarantees secured
hereby, according to the intent and purposes herein expressed. The Company shall
take, or shall cause its Subsidiaries to take any and all actions reasonably
required to cause the Collateral Documents to create and maintain, as security
for the obligations of the Company hereunder, a valid and enforceable perfected
priority Lien in and on all the Collateral in accordance with the terms of the
Collateral Documents.
65
SECTION 10.2. Certificates, Opinions and Recording. The Company
and the Guarantors will cause this Indenture, if necessary, the applicable
Collateral Documents, including any financing statements, all amendments or
supplements to each of the foregoing and any other similar security documents as
necessary, to be registered, recorded and filed and/or re-recorded, re-filed and
renewed in such manner and in such place or places, if any, as may be required
by law in order fully to preserve and protect (a) the Lien securing the
obligations under the Senior Notes and the Guarantees of those Guarantors that
are parties to the Collateral Documents pursuant to the Collateral Documents and
(b) the Lien of the Guarantors that are parties to the Collateral Documents
securing (for the ratable benefit of the Holders of Senior Notes) the Senior
Notes and the Guarantees and to effectuate and preserve the security of the
Holders of Senior Notes and all rights of the Trustee.
The Company, the Guarantors and any other obligor shall furnish to the
Trustee:
(a) Promptly after the execution and delivery of this
Indenture, and promptly after the execution and delivery of any other instrument
of further assurance or amendment, an Opinion of Counsel in the United States
(which may include one or more local counsel opinions as to matters concerning
the laws of affected jurisdictions) (a) stating that this Indenture, the Senior
Notes and the Collateral Documents and such instruments of further assurance or
amendment, if any, are valid, binding and enforceable obligations of the Company
and its Subsidiaries which are signatories to those agreements, subject to
customary qualifications and exceptions (and any other qualifications and
exceptions reasonably acceptable to the Trustee), and (b) either (i) stating
that, subject to customary assumptions and exclusions (and any other
qualifications and exceptions reasonably acceptable to the Trustee), in the
opinion of such counsel, this Indenture and other applicable Collateral
Documents or such instruments of further assurance or amendment have been
properly (as the case may be) recorded, registered and filed in the specified
filing offices to the extent necessary to make effective the Lien intended to be
created by this Indenture and such Collateral Documents or documents of further
assurance (as the case may be) and reciting the details of such action or
referring to prior Opinions of Counsel in which such details are given, and
stating that, subject to customary assumptions and exclusions (and any other
qualifications and exceptions reasonably acceptable to the Trustee), as to such
Indenture and Collateral Documents and such other instruments such recording,
registering and filing are the only recordings, registrations and filings
necessary to perfect or give constructive notice of the Liens granted therein
and that no re-recordings, re-registerings or re-filings are necessary to
maintain such perfection or notice, and further stating that all financing
statements and continuation statements (as applicable) have been executed and
filed (or provision for the filing thereof made to the reasonable satisfaction
of the Trustee) that are necessary fully to preserve and protect the rights of
the Holders of Senior Notes and the Trustee hereunder and under the Collateral
Documents or (ii) stating that, subject to customary assumptions and exclusions
(and any other qualifications and exceptions reasonably acceptable to the
Trustee), in the opinion of such counsel, no such action is necessary to make
any Lien created under any of the Collateral Documents effective as intended by
this Indenture and such Collateral Documents; and
(b) Within 30 days after each anniversary of the date of
this Indenture, an Opinion of Counsel, dated as of such date (which may include
one or more local counsel opinions as to matters concerning the laws of affected
jurisdictions), either (i) stating that,
66
subject to customary assumptions and exclusions (and any other qualifications
and exceptions reasonably acceptable to the Trustee), in the opinion of such
counsel, such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of this Indenture and all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien of this
Indenture and the Collateral Documents until the next Opinion of Counsel is
required to be rendered pursuant to this paragraph and reciting the details of
such action or referring to prior Opinions of Counsel in which such details are
given, and stating that all financing statements and continuation statements
have been executed and filed that are necessary fully to preserve and protect
the rights of the Holders and the Trustee hereunder and under the Collateral
Documents or (ii) stating that, subject to customary assumptions and exclusions
(and any other qualifications and exceptions reasonably acceptable to the
Trustee), in the opinion of such counsel, no such action is necessary to
maintain such Lien, until the next Opinion of Counsel is required to be rendered
pursuant to this paragraph.
(c) The Company shall furnish to the Trustee the
certificate or opinions with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)), as the case may be, required by TIA Section 314(d). Such
certificates or opinions will be subject to the terms of TIA Section 314(e).
SECTION 10.3. Release of Collateral. (a) Subject to subsections
(b), (c) and (d) of this Section 10.3, Collateral may be released from the Lien
and security interest created by this Indenture and the Collateral Documents at
any time or from time to time upon the request of the Company pursuant to an
Officers' Certificate certifying that all terms for release and conditions
precedent hereunder and under the applicable Collateral Document have been met
and specifying (A) the identity of the Collateral to be released and (B) the
provision of this Indenture which authorizes such release. The Trustee shall
release, and shall give any necessary consent, waiver or instruction to the
Collateral Agent or the Mortgage Trustee, as the case may be, to release (at the
sole cost and expense of the Company) (i) all Collateral that is contributed,
sold, leased, conveyed, transferred or otherwise disposed of, provided, such
contribution, sale, lease, conveyance, transfer or other distribution is or will
be in accordance with the provisions of this Indenture, including, without
limitation, the requirement that the net proceeds, if any, from such
contribution, sale, lease, conveyance, transfer or other distribution are or
will be applied in accordance with this Indenture and that no Default or Event
of Default has occurred and is continuing or would occur immediately following
such release; (ii) Collateral which may be released with the consent of Holders
pursuant to Article 8 hereof, (iii) all Collateral (except as provided in
Article 9 hereof) upon discharge or defeasance of this Indenture in accordance
with Article 9 hereof; (iv) all Collateral upon the payment in full of all
obligations of the Company with respect to the Senior Notes; and (v) Collateral
of a Guarantor whose Guarantee is released pursuant to Section 11.4 hereof. Upon
receipt of such Officers' Certificate, an Opinion of Counsel and any other
opinions or certificates required by this Indenture and the TIA, the Trustee
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture and the Collateral
Documents.
67
(b) No Collateral shall be released from the Lien and
security interest created by the Collateral Documents pursuant to the provisions
of the Collateral Documents unless there shall have been delivered to the
Trustee the certificates required by this Section 10.3.
(c) The Trustee may release Collateral from the Lien and
security interest created by this Indenture and the Collateral Documents upon
the sale or disposition of Collateral pursuant to the Trustee's powers, rights
and duties with respect to remedies provided under any of the Collateral
Documents.
(d) The release of any Collateral from the terms of this
Indenture and the Collateral Documents shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if and
to the extent the Collateral is released pursuant to the terms hereof. To the
extent applicable, the Company shall cause TIA Section 313(b), relating to
reports, and TIA Section 314(d), relating to the release of property or
securities from the Lien and security interest of the Collateral Documents and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Collateral Documents, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
SECTION 10.4. Protection of the Trust Estate. Upon prior written
notice to the Company and the Guarantors, the Trustee shall have the power (i)
to institute and maintain such suits and proceedings as it may deem expedient,
to prevent any impairment of the Collateral under any of the Collateral
Documents; and (ii) to enforce the obligations of the Company, the Guarantors or
any Restricted Subsidiary under this Indenture or the Collateral Documents, to
institute and maintain such suits and proceedings as may be expedient to prevent
any impairment of the Collateral under the Collateral Documents and in the
profits, rents, revenues and other income arising therefrom; including the power
to institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair any Collateral or be
prejudicial to the interests of the Holders of Senior Notes or the Trustee, to
the extent permitted thereunder.
SECTION 10.5. Certificates of the Company. The Company shall
furnish to the Trustee, prior to each proposed release of Collateral pursuant to
the Collateral Documents (i) all documents required by TIA Section 314(d) and
(ii) an Opinion of Counsel in the United States, which opinion shall be subject
to customary assumptions and exclusions, to the effect that such accompanying
documents constitute all documents required by TIA Section 314(d). The Trustee
may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
SECTION 10.6. Certificates of the Trustee. In the event that the
Company wishes to release Collateral in accordance with the Collateral Documents
and has delivered the certificates and documents required by the Collateral
Documents and Sections 10.3 and 10.5 hereof, the
68
Trustee shall determine whether it has received all documents required by TIA
Section 314(d) in connection with such release and, based on such determination
and the Opinion of Counsel delivered pursuant to Section 10.5(ii), shall deliver
a certificate to the Collateral Agent, setting forth such determination.
SECTION 10.7. Authorization of Actions to be Taken by the Trustee
Under the Collateral Documents. Subject to the provisions of Sections 7.1 and
7.2 hereof and the Intercreditor Agreement, the Trustee may, without the consent
of the Holders of Senior Notes, direct, on behalf of the Holders of Senior
Notes, the Collateral Agent to take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Collateral Documents
and (b) collect and receive any and all amounts payable in respect of the
Obligations of the Company hereunder. Subject to the Intercreditor Agreement,
the Trustee shall have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Collateral Documents or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders of Senior
Notes in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Senior Notes or of the Trustee).
SECTION 10.8. Authorization of Receipt of Funds by the Trustee
Under the Collateral Documents. Subject to the Intercreditor Agreement, upon an
Event of Default and so long as such Event of Default continues, the Trustee may
exercise in respect of the Collateral, in addition to the other rights and
remedies provided for herein, in the Collateral Documents or otherwise available
to it, all of the rights and remedies of a secured party under the Uniform
Commercial Code or other applicable law, and the Trustee may also upon obtaining
possession of the Collateral as set forth herein, without notice to the Company,
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Trustee may deem commercially
reasonable. The Company acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such a
sale were a public sale. The Company agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Company of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
Any cash that is Collateral held by the Trustee and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (unless
otherwise provided for in the Collateral Documents) in accordance with Section
6.10 hereof, or as the Holders of the Senior Notes shall direct pursuant to
Section 6.5 hereof. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all the obligations shall be paid
over to the Company or to
69
whomsoever may be lawfully entitled to receive such surplus or as a court of
competent jurisdiction may direct.
SECTION 10.9. Termination of Security Interest. Upon the payment
in full of all Obligations of the Company under this Indenture and the Senior
Notes, or upon Legal Defeasance or Covenant Defeasance, the Trustee shall, at
the request of the Company, deliver a certificate to the Collateral Agent
stating that such Obligations have been paid in full, and instruct the
Collateral Agent to release the Liens pursuant to this Indenture and the
Collateral Documents.
SECTION 10.10. Cooperation of Trustee. In the event the Company or
any Guarantor pledges or grants to the Trustee a security interest in additional
Collateral, the Trustee shall cooperate with the Company or such Guarantor in
reasonably and promptly agreeing to the form of, and executing as required, any
instruments or documents necessary to make effective the security interest in
the Collateral to be so pledged. To the extent practicable, the terms of any
security agreement or other instrument or document necessitated by any such
pledge shall be comparable to the provisions of the existing relevant Collateral
Documents. Subject to, and in accordance with the requirements of this Article
10 and the terms of the Collateral Documents, in the event that the Company or
any Guarantor engages in any transaction pursuant to Section 10.3, the Trustee,
subject to the provisions of Sections 10.3 and 10.5, shall cooperate with the
Company or such Guarantor in order to facilitate such transaction in accordance
with any reasonable time schedule proposed by the Company, including by
delivering and releasing the Collateral in a prompt and reasonable manner.
SECTION 10.11. Collateral Agent. The Collateral Agent may be
delegated any one or more of the duties or rights of the Trustee hereunder or
under the Collateral Documents or which are specified in any Collateral
Documents, including without limitation, the right to hold any Collateral in the
name of, registered to, or in the physical possession of, such Collateral Agent
for the ratable benefit of the Holders of the Senior Notes and the holders from
time to time of Senior Indebtedness. Such Collateral Agent shall have such
rights and duties as may be specified in the Intercreditor Agreement.
SECTION 10.12. Intercreditor Agreement. The Company, the Trustee
and the Collateral Agent are entering into the Intercreditor Agreement which
sets forth the relative rights of the Trustee and the Holders, on the one hand,
and the holders of the Senior Indebtedness, on the other hand, as to the
priority of payment of the Senior Indebtedness over the Senior Notes and related
obligations in certain circumstances. As among the Holders, the Collateral shall
be held for the equal and ratable benefit of such Holders without preference,
priority or distinction of any thereof over any other. The terms of this
Indenture and the Collateral Documents will be subject to the terms of such
Intercreditor Agreement and each Holder, by accepting a Senior Note, agrees to
all of the terms and provisions of such Intercreditor Agreement which may be
amended from time to time pursuant to the provisions thereof and this Indenture.
Without limiting the foregoing, each Holder, by accepting a Senior Note,
acknowledges and agrees that its rights to payment of the obligations evidenced
by the Senior Notes and the Guarantees may be subject to the terms of any such
Intercreditor Agreement and agrees that the Trustee is hereby irrevocably
authorized and directed to execute, deliver and perform such Intercreditor
Agreement, in accordance with their respective terms. The Trustee agrees that in
the event of any
70
conflict between this Indenture and the Intercreditor Agreement, the provisions
of such Intercreditor Agreement shall control; provided, that no provision of
such Intercreditor Agreement shall be deemed to limit or subordinate the
Trustee's right to compensation, fees, expenses or indemnities under this
Indenture, or the Trustee's right to require Officers' Certificates or Opinions
of Counsel in accordance with the provisions of this Indenture. The provisions
of this Section shall be expressly for the benefit of the holders of the Senior
Indebtedness and may not be amended without the consent of the holders of a
majority in principal amount thereof (without thereby limiting any other
provisions of this Indenture or elsewhere provided for their benefit).
ARTICLE 11
Guarantee of Senior Notes
SECTION 11.1. Guarantee. Subject to the provisions of this Article
11, each Guarantor hereby jointly and severally unconditionally and irrevocably
guarantees to each Holder and to the Trustee, on behalf of the Holders, (i) the
due and punctual payment of the principal of, premium, if any, and interest on
each Senior Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal of, and premium, if any, and interest on the Senior
Notes, to the extent lawful, and the due and punctual performance of all other
Obligations of the Company to the Holders or the Trustee all in accordance with
the terms of such Senior Note and this Indenture, and (ii) in the case of any
extension of time of payment or renewal of any Senior Notes or any of such other
Obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, at stated maturity, by
acceleration or otherwise. Each Guarantor, by execution of the Guarantee, agrees
that its obligations thereunder and hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Senior Note or this Indenture, any
failure to enforce the provisions of any such Senior Note or this Indenture, any
waiver, modification or indulgence granted to the Company with respect thereto
by the Holder of such Senior Note or the Trustee, any release of any Collateral,
or any other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or such Guarantor.
Each Guarantor, by execution of the Guarantee, waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to any such Senior Note or
the Indebtedness evidenced thereby and all demands whatsoever, and covenants
that the Guarantee will not be discharged as to any such Senior Note except by
payment in full of the principal thereof, premium if any, and interest thereon
and as provided in Section 9.1 hereof. If any Holder or the Trustee is required
by any court or otherwise to return to the Company or any Guarantor or any
Custodian, trustee, liquidator or other similar official acting in relation to
either the Company or any Guarantor, any amount paid by either the Company or
any Guarantor to the Holder or Trustee, each Guarantor's Guarantee, to the
extent therefor discharged, shall be reinstated in full force and effect. Each
Guarantor, by execution of the Guarantee, further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the Obligations guaranteed by the
71
Guarantee may be accelerated as provided in Article 6 hereof for the purposes of
the Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (ii) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 hereof, such Obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of the
Guarantee. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article 6 hereof, the Trustee shall
promptly make a demand for payment on the Senior Notes under any Guarantee
provided for in this Article 11 and not discharged. Failure to make such demand
shall not affect the validity or enforceability of the Guarantee upon any
Guarantor.
A Guarantee shall not be valid or become obligatory for any purpose
with respect to a Senior Note unless the certificate of authentication on such
Senior Note shall have been signed by or on behalf of the Trustee.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorney's fees and expenses) incurred by the Trustee as a
representative of any Holder in enforcing any rights under this section.
SECTION 11.2. Execution and Delivery of Guarantees. To further
evidence the Guarantee set forth in this Article 11, each Guarantor shall
execute a Guarantee in the form included as part of Exhibit A hereto and hereby
agrees that a notation of such Guarantee shall be placed on each Senior Note
authenticated and made available for delivery by the Trustee and that this
Guarantee shall be executed on behalf of each Guarantor by the manual or
facsimile signature of an Officer of each Guarantor or its duly appointed agent.
Each Guarantor hereby agrees that the Guarantee set forth in Section
11.1 shall remain in full force and effect notwithstanding any failure to
endorse on each Senior Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on the Guarantee no
longer holds that office at the time the Trustee authenticates the Senior Note
on which the Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Senior Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
SECTION 11.3. Limitation of Guarantee. The obligations of each
Guarantor will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under Federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
72
SECTION 11.4. Release of Guarantor. A Guarantor shall be released
from all of its obligations under its Guarantee if:
(i) the Guarantor has sold all or substantially all of
its assets or the Company and its Subsidiaries have sold all of the
Equity Interests of the Guarantor owned by them, in each case in a
transaction in compliance with Sections 4.8 and 5.1 hereof to the
extent applicable; or
(ii) the Guarantor merges with or into or consolidates
with, or transfers all or substantially all of its assets to, the
Company or another Guarantor in a transaction in compliance with
Section 5.1 hereof;
and in each such case, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with. At the written request of the Company, the Trustee will promptly execute
and deliver appropriate instruments in forms reasonably acceptable to the
Company evidencing and further implementing any releases or discharges pursuant
to the foregoing provisions.
SECTION 11.5. Additional Guarantors. The Company covenants and
agrees that it will cause any Person which becomes obligated to guarantee the
Senior Notes pursuant to the terms of Section 4.12 hereof, to execute a
Guarantee satisfactory in form and substance to the Trustee pursuant to which
such Person shall guarantee the obligations of the Company under the Senior
Notes and this Indenture in accordance with this Article 11 with the same effect
and to the same extent as if such Person had been named herein as a Guarantor.
Notwithstanding the foregoing, if such Person is a Subsidiary incorporated in a
jurisdiction other than the United States, and if and to the extent that the
execution of a Guarantee by such Person would have adverse tax consequences for
the Company or any of its Subsidiaries, the Company shall not be obligated to
cause such Person to execute a Guarantee, provided that the Company shall cause
65% (or such other greater or lesser percentage which as a result of a change of
law may be pledged without resulting in adverse tax consequences) of the issued
and outstanding shares of stock of such Person to become Collateral as and when
received by the Company or by any of its Subsidiaries.
ARTICLE 12
Miscellaneous
SECTION 12.1. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2. Notices. Any notice or communication shall be given
in writing and delivered in person, sent by facsimile, delivered by commercial
courier service or mailed by first-class mail, postage prepaid, addressed as
follows:
if to the Company or any Guarantor:
73
Mariner Health Care, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
with a copy to: Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx X.X., 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000/7
Such notices or communications shall be effective when received and
shall be sufficiently given if so given within the time prescribed in this
Indenture.
The Company, any Guarantors or the Trustee by written notice to the
others may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to him
by first-class mail, postage prepaid, at his address shown on the register kept
by the Registrar. If a notice or communication to a Holder is mailed in the
manner provided above, it shall be deemed duly given on the date so deposited in
the mail, whether or not the addressee receives it.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
In case, by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 12.3. Communications by Holders with Other Holders. Holders
may communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Senior Notes. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
74
(1) an Officers' Certificate (which shall include the
statements set forth in Section 12.5 below) in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with;
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 12.5 below) in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel, all
such conditions precedent have been complied with; and
(3) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 12.5. Statements Required in Certificate and Opinion. Each
certificate and opinion with respect to compliance with a condition or covenant
Provided for in this Indenture shall include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such Person, it
or he has made such examination or investigation as is necessary to enable it or
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such Person, such covenant or condition has been complied with.
SECTION 12.6. When Treasury Senior Notes Disregarded. In
determining whether the Holders of the required aggregate principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, any Guarantor or any other obligor on the Senior Notes or
by any Affiliate of any of them shall be disregarded as though they were not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes which the Trustee actually knows are so owned shall be so
disregarded. Senior Notes so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to the Senior Notes and that the
pledgee is not the Company, a Guarantor or any other obligor upon the Senior
Notes or any Affiliate of any of them.
SECTION 12.7. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or meetings of Holders. The Registrar and Paying
Agent may make reasonable rules for their functions.
SECTION 12.8. Business Days; Legal Holidays. A "Business Day" is a
day that is not a Legal Holiday. A "Legal Holiday" is a Saturday, a Sunday, a
federally-recognized holiday or a
75
day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 12.9. GOVERNING LAW. THIS INDENTURE AND THE SENIOR NOTES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE OR THE SENIOR NOTES.
SECTION 12.10. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Company or any Subsidiary thereof. No such indenture, loan,
security or debt agreement may be used to interpret this Indenture.
SECTION 12.11. No Recourse Against Others. No recourse for the
payment of the principal of or premium, if any, or interest on any of the Senior
Notes, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company or
any Guarantor in this Indenture or in any supplemental indenture, or in any of
the Senior Notes, or because of the creation of any Indebtedness represented
thereby, shall be had against any stockholder, officer, director, partner,
affiliate, beneficiary or employee, as such, past, present or future, of the
Company or of any successor corporation or against the property or assets of any
such stockholder, officer, employee, partner, affiliate, beneficiary or
director, either directly or through the Company or any Guarantor, or any
successor corporation thereof, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that this Indenture and the Senior Notes are solely
obligations of the Company and the Guarantors, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, any
stockholder, officer, employee, partner, affiliate, beneficiary or director, as
such, of the Company or any Guarantor, or any successor corporation thereof,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or the Senior Notes or implied therefrom, and that any and all such personal
liability of, and any and all claims against every stockholder, officer,
employee, partner, affiliate, beneficiary and director, as such, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of the Senior Notes. Such waiver
may not be effective to waive liabilities under federal securities laws and it
is the view of the SEC that such waiver is against public policy. It is
understood that this limitation on recourse is made expressly for the benefit of
any such shareholder, employee, officer, partner, affiliate, beneficiary or
director and may be enforced by any one or all of them.
SECTION 12.12. Successors. All agreements of the Company and the
Guarantors in this Indenture and the Senior Notes shall bind their respective
successors. All agreements of the Trustee, any additional trustee and any Paying
Agents in this Indenture shall bind their respective successors.
76
SECTION 12.13. Multiple Counterparts. The parties may sign multiple
counterparts of this Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent one and the same agreement.
SECTION 12.14. Table of Contents, Headings, etc. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 12.15. Separability. Each provision of this Indenture shall
be considered separable and if for any reason any provision which is not
essential to the effectuation of the basic purpose of this Indenture or the
Senior Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
77
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date and year first written above.
MARINER HEALTH CARE, INC.
By:
----------------------------------
Name:
Title:
GUARANTORS,
[ --------------------]
By:
----------------------------------
Name:
Title:
[ --------------------]
By:
----------------------------------
Name:
Title:
TRUSTEE,
THE BANK OF NEW YORK
By:
----------------------------------
Name:
Title:
EXHIBIT A
FORM OF NOTATION ON SENIOR NOTE RELATING TO GUARANTEE
GUARANTEE
Each guarantor (each a "Guarantor" and collectively the "Guarantors"
including any successor Person under the Indenture) has unconditionally
guaranteed, jointly and severally, to the extent set forth in the Indenture and
subject to the provisions of the Indenture, (a) the due and punctual payment of
the principal of, premium, if any and interest on the Senior Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on overdue principal, and, to the extent permitted by law, interest, and the due
and punctual performance of all other obligations of the Company to the
Noteholders or the Trustee all in accordance with the terms set forth in Article
11 of the Indenture, and (b) in case of any extension of time of payment or
renewal of any Senior Notes or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
11 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
A-1
EXHIBIT B
FORM OF NOTE
(FACE OF NOTE)
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO
THE PROVISIONS OF THE INDENTURE]
NUMBER AMOUNT
--------- ---------
CUSIP NUMBER
---------
MARINER HEALTH CARE, INC.
SECOND PRIORITY SECURED NOTES DUE 2009
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN PART OR IN WHOLE PRIOR TO
MATURITY AS SET FORTH BELOW. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Mariner Health Care, Inc., a Delaware corporation (the "Company," which
term includes any successor corporation), for value received promises to pay to
_______________ or registered assigns, the principal sum of
_____________________________ Dollars ($_________), on
Interest Payment Dates: __________, __________, __________ and
__________, commencing _______________, 2002.
Record Dates: __________, __________, __________, __________.
Reference is made to the further provisions of this Senior Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Senior Note to be
signed manually or by facsimile by its duly authorized officers.
MARINER HEALTH CARE, INC.
By:
----------------------------------
Name:
Title:
B-1
Certificate of Authentication:
This is one of the Second Priority Secured Notes due 2009 referred to
in the within-mentioned Indenture.
Dated:
--------------------------------
as Trustee
By:
-----------------------------------
Authorized Signatory
B-2
(REVERSE SIDE)
MARINER HEALTH CARE, INC.
SECOND PRIORITY SECURED NOTES DUE 2009
1. INTEREST.
(A) [WILL FIRST INTEREST PAYMENT DATE BE THREE MONTHS
AFTER CLOSING, OR WILL THERE BE AN ABBREVIATED INITIAL INTEREST PERIOD FOR WHICH
WE NEED TO PROVIDE FOR AN "INITIAL INTEREST RATE" (SINCE 3-MONTH LIBOR LANGUAGE
WOULD NOT WORK FOR SHORT INTEREST PERIOD)?] Mariner Health Care, Inc., a
Delaware corporation (the "Company"), promises to pay interest on the principal
amount of the Senior Notes at a floating rate per annum, reset quarterly, equal
to 3-month LIBOR (as defined below), plus 5.50%, from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from the Issue Date, until the principal thereof
becomes due and payable, and on any overdue principal and (without duplication
and to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the same interest rate per annum,
compounded quarterly, payable quarterly in arrears on __________, __________,
__________ and __________ of each year, commencing __________, 2002 (each, an
"Interest Payment Date"), to the person in whose name the Senior Notes are
registered at the close of business on the regular record date for such interest
installment, which shall be the first day of the month in which the relevant
Interest Payment Date falls.
(b) The interest rate on the Senior Notes for each
quarter (or other period for which interest is payable) will be determined on
the Determination Date (as defined below) for such quarter (or other period for
which interest is payable) and will be a per annum rate reset quarterly equal to
3-month LIBOR (determined as set forth below) plus 5.50%, and will be effective
as of the first day of such quarter (or other period for which interest is
payable).
(c) On each Determination Date, the Calculation Agent
will calculate the interest rate, based on 3-month LIBOR, for each interest
period commencing on the second London Banking Day immediately following such
Determination Date.
"3-month LIBOR" means, with respect to an interest period relating to a
Distribution Date, the London interbank offered rate for three-month, Eurodollar
deposits determined in the following order of priority:
(i) the rate (expressed as a percentage per
annum) for Eurodollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date);
(ii) if such rate does not appear on Telerate
Page 3750 as of 11:00 a.m. (London time) on the related Determination Date,
3-month LIBOR will be the arithmetic mean of the rates (expressed as percentages
per annum) for Eurodollar deposits having a three-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such Determination Date;
B-3
(iii) if such rate does not appear on Reuters Page
LIBO as of 11:00 a.m. (London time) on the related Determination Date, the
Calculation Agent will request the principal London offices of four leading
banks in the London interbank market to provide such banks' offered quotations
(expressed as percentages per annum) to prime banks in the London interbank
market for Eurodollar deposits having a three-month maturity as of 11:00 a.m.
(London time) on such Determination Date. If at least two quotations are
provided, 3-month LIBOR will be the arithmetic mean of such quotations;
(iv) if fewer than two such quotations are
provided as requested in clause (iii) above, the Calculation Agent will request
four major New York City banks to provide such banks' offered quotations
(expressed as percentages per annum) to leading European banks for loans in
Eurodollars as of 11:00 a.m. (London time) on such Determination Date. If at
least two such quotations are provided, 3-month LIBOR will be the arithmetic
mean of such quotations; and
(v) if fewer than two such quotations are
provided as requested in clause (iv) above, 3-month LIBOR will be 3-month LIBOR
determined with respect to the interest period immediately preceding such
current interest period.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Determination Date is
superceded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on such Determination Date, the
corrected rate as so substituted on the applicable page will be the applicable
3-month LIBOR for such Determination Date.
As used herein:
"Calculation Agent" means _____________________.
"Determination Date" means the date that is two London Banking Days
preceding the first day of any quarter or other period for which an interest
payment will be payable.
"London Banking Day" means a day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Dow Xxxxx Telerate Service (or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits).
(d) All percentages resulting from any calculations on
the Senior Notes will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to
9.87655% (or .09876555)), and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent (with one-half cent being
rounded upward).
B-4
(e) On the Determination Date, the Calculation Agent
shall notify the Company and the Paying Agent of the applicable interest rate in
effect for the related interest rate period. The Calculation Agent shall, upon
the request of a holder of Senior Notes, provide the interest rate then in
effect. All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on the Company
and the holders of the Senior Notes.
(f) The amount of interest payable on any Interest
Payment Date shall be computed on the basis of the actual number of days elapsed
and a 360-day year.
2. METHOD OF PAYMENT.
The Company will pay interest on this Senior Note provided for in
Paragraph 1 above (except defaulted interest) to the person who is the
registered Holder of this Note at the close of business on the [first day of the
month in which the relevant Interest Payment Date falls] [the fifteenth day of
the month prior to the relevant Interest Payment date] (whether or not such day
is a Business Day). The Holder must surrender this Note to a Paying Agent to
collect principal payments due on the Maturity Date. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts;
provided, however, that the Company may pay principal, premium, if any, and
interest by check payable in such money. It may mail an interest check to the
Holder's registered address. Notwithstanding the foregoing, all payments with
respect to the Senior Notes, the Holders of which have given wire transfer
instructions to the Paying Agent on or before the relevant record date pursuant
to the Indenture (as hereinafter defined), shall be made by wire transfer of
immediately available funds to the accounts specified by such Holders.
3. PAYING AGENT AND REGISTRAR.
Initially, __________________ (the "Trustee"), will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to the Holders of the Senior Notes. Neither the Company nor any of its
Subsidiaries or Affiliates may act as Paying Agent but may act as registrar or
co-registrar.
4. INDENTURE AND COLLATERAL DOCUMENTS.
The Company issued this Senior Note under an Indenture dated as of
_______, 2002 (as such may be amended, supplemented, waived and modified from
time to time, the "Indenture") by and among the Company, the Guarantors party
thereto and the Trustee. The terms of this Senior Note 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. This Senior
Note is subject to all such terms, and the Holder of this Senior Note is
referred to the Indenture and said Trust Indenture Act for a statement of them.
The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Senior Notes or the Guarantee. The Senior Notes are secured by
certain collateral pursuant to the Collateral Documents and may be released
pursuant to the terms thereof, subject to the terms of this Indenture. The
Collateral Documents govern the rights in and to the Collateral of the holders
from time to time of Senior Indebtedness
B-5
and of the Trustee and the Holders. All capitalized terms in this Senior Note,
unless otherwise defined, have the meanings assigned to them by the Indenture.
The Senior Notes are secured obligations of the Company of up to
$150,000,000 in aggregate principal amount, subject to adjustment as provided in
the Indenture. The Indenture imposes certain restrictions on, among other
things, the Company's ability to consolidate or merge with or into, or to
transfer all or substantially all of its assets to, another person.
5. OPTIONAL REDEMPTION.
Subject to the terms of Section 3.7 of the Indenture, the Company may
at any time redeem the Senior Notes, in whole or in part, at a redemption price
equal to 100% of the principal amount thereof, together with accrued and unpaid
interest to the Redemption Date.
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at least 15
days but not more than 30 days prior to the Redemption Date to each Holder of
Senior Notes to be redeemed at its registered address as it shall appear on the
register of the Senior Notes maintained by the Registrar. On and after any
Redemption Date, interest will cease to accrue on the Senior Notes or portions
thereof called for redemption unless the Company shall default in making the
redemption payment thereon.
7. GUARANTEE.
Payment of principal of, premium, if any, and interest (including
interest on overdue principal and overdue interest (if lawful)) on the Senior
Notes and all other obligations of the Company to the Holders will be
unconditionally guaranteed by the Guarantors pursuant to, and subject to the
terms of, Article 11 of the Indenture.
8. INTERCREDITOR AGREEMENT.
The Intercreditor Agreement sets forth the relative rights of the
Trustee and the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand, as to the priority of payment of the Senior
Indebtedness over the Senior Notes and related obligations in certain
circumstances. The terms of the Senior Notes are subject to the terms of the
Intercreditor Agreement and each Holder, by accepting this Senior Note, agrees
to all of the terms and provisions of the Intercreditor Agreement which may be
amended from time to time pursuant to the provisions thereof and this Indenture.
Without limiting the foregoing, each Holder, by accepting this Senior Note,
acknowledges and agrees that its rights to payment of the obligations evidenced
by the Senior Notes and the Guarantees are subject to the terms of the
Intercreditor Agreement, and authorizes the Trustee to give effect thereto and
appoints the Trustee as attorney in fact for such purpose.
9. DENOMINATIONS, TRANSFER, EXCHANGE.
The Senior Notes are in registered form without coupons in
denominations of $1,000 and integral multiples thereof. A Holder may register
the transfer or exchange of Senior Notes in
B-6
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Senior Note selected for
redemption or register the transfer of or exchange any Senior Note for a period
of 15 days before a selection of Senior Notes to be redeemed or any Senior Note
after it is called for redemption in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
10. PERSONS DEEMED OWNERS.
The registered Holder of this Senior Note may be treated as the owner
of it for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest on any
Senior Note remains unclaimed for two years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to money must look to the Company for payment as general creditors unless an
"abandoned property" law designates another person.
12. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture, the Senior Notes, the
Guarantees or the Collateral Documents may be modified, amended or supplemented
by the Company, the Guarantors and the Trustee with the consent of the Holders
of at least a majority in principal amount of the Senior Notes then outstanding
and any existing default or compliance with any provision may be waived in a
particular instance with the consent of the Holders of a majority in principal
amount of the Senior Notes then outstanding. Without the consent of Holders, the
Company, the Guarantors and the Trustee may amend the Indenture, the Senior
Notes, the Guarantees or the Collateral Documents or supplement the Indenture
for certain specified purposes, including providing for uncertificated Senior
Notes in addition to certificated Senior Notes, and curing any ambiguity, defect
or inconsistency, or making any other change that does not adversely affect the
rights of any Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act to enter into additional or supplemental Collateral Documents, to adjust the
principal amount of the Senior Notes issued pursuant to the Indenture and to
otherwise comply with the terms of the Plan of Reorganization (as defined in the
Indenture).
13. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its
predecessor under the Senior Notes and the Indenture and immediately before and
thereafter no Default exists and certain other conditions are satisfied, the
predecessor corporation will be released from those obligations.
B-7
14. DEFAULTS AND REMEDIES.
Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Section 6.1(7) or (8) of the
Indenture) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of not less than 25% in aggregate principal amount of the Senior
Notes then outstanding by written notice to the Company and the Trustee, may
declare to be immediately due and payable the entire principal amount of all the
Senior Notes then outstanding plus accrued but unpaid interest to the date of
acceleration and such amounts shall become immediately due and payable. In case
an Event of Default specified in Section 6.1(7) or (8) of the Indenture occurs,
such principal amount, together with premium, if any, and interest with respect
to all of the Senior Notes, shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the Holders of the Notes.
The Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal, premium, if any, or interest) if it determines
that withholding notice is in their interests.
15. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, any Guarantor or their Affiliates, and may otherwise deal with the
Company, any Guarantor or their Affiliates, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Senior Notes or the Indenture or for any
claim based on, in respect or by reason of, such obligations or their creation.
The Holder of this Senior Note by accepting this Senior Note waives and releases
all such liability. The waiver and release are part of the consideration for the
issuance of this Senior Note. Such waiver may not be effective to waive
liabilities under federal securities laws and it is the view of the SEC that
such waiver is against public policy.
17. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Senior Note and for defeasance of certain covenants in the
Indenture upon compliance by the Company with certain conditions set forth in
the Indenture.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
B-8
19. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Senior Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Senior Notes. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. GOVERNING LAW.
THE INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE OR THE SENIOR NOTES.
THE COMPANY WILL FURNISH TO ANY HOLDER OF A SENIOR NOTE UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
MARINER HEALTH CARE, INC., XXX XXXXXXX XXXXX, XXXXX 0000, XXXXXXX, XXXXXXX
00000, ATTENTION: TREASURER (OR SUCH OTHER ADDRESS AS THE COMPANY MAY DESIGNATE
FROM TIME TO TIME FOR SUCH PURPOSE IN WRITTEN NOTICE TO THE HOLDERS OF SENIOR
NOTES.
21. AUTHENTICATION.
This Senior Note shall not be valid until the Trustee manually signs
the Certificate of Authentication on the other side of this Senior Note.
B-9
ASSIGNMENT FORM(1)
I or we assign and transfer this Senior Note to:
(Insert assignee's social security or tax I.D. number)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Print or type name, address and zip code of assignee) and irrevocably
appoint:
----------------------------------------------------------------------
----------------------------------------------------------------------
Agent to transfer this Senior Note on the books of the Company. The
Agent may substitute another to act for him.
Date:
------------------------------------------------------------------
Your Signature:
-------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
--------------------------------------------------
(1) THIS ASSIGNMENT FORM SHOULD BE INCLUDED ONLY IF THE NOTE IS IN
DEFINITIVE FORM.
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Senior Note
purchased by the Company pursuant to Section 4.9 or Section 4.24 of the
Indenture, check the box:
[ ]
If you want to have only part of the Senior Note purchased by the
Company pursuant to Section 4.9 or Section 4.24 of the Indenture, state the
amount you elect to have purchased: $______ multiple of $1,000)
Date: .
----------------------------------
Your Signature:
------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guaranteed
---------------------------------------
B-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Amount of Principal Amount
decrease in Amount of increase of this Global Note Signature of
Principal in Principal following such authorized officer
Amount Amount of this decrease (or of Trustee or Note
Date of Exchange of this Global Note Global Note increase) Custodian
---------------- ------------------- ------------------ ------------------- ------------------
(1) THIS SCHEDULE SHOULD BE INCLUDED ONLY IF THE NOTE IS IN GLOBAL FORM.
B-12
EXHIBIT C
FORM OF GLOBAL NOTE LEGEND
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY IN CUSTODY FOR THE BENEFICIAL OWNERS HEREOF. THIS NOTE
IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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 SUCH OTHER ENTITY 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.
C-1
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE, dated as of ________, between
_________________ (the "Guarantor"), a subsidiary of [Mariner Health Care, Inc.,
a Delaware corporation], and ____________, as trustee under the Indenture as
defined below (the "Trustee").
W I T N E S S E T H
WHEREAS, Mariner Health Care, Inc. (the "Company") and the
Guarantors as listed on Schedule 1 to the Indenture, have heretofore executed
and delivered to the Trustee an indenture (the "Indenture"), dated as of
_________, 2002, providing for the issuance of up to an aggregate principal
amount of $150,000,000 of Senior Notes due 2009 (the "Notes");
WHEREAS, Section 4.24 of the Indenture provides that under
certain circumstances the Company is required to cause the Guarantor to execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guarantor shall unconditionally guarantee all of the Issuers' Obligations under
the Notes pursuant to a Guarantee on the terms and conditions set forth herein;
and
WHEREAS, pursuant to Section 8.1 of the Indenture, the Trustee
is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guarantor and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein
without definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees,
jointly and severally with all other Guarantors, to guarantee the Company'
obligations under the Notes on the terms and subject to the conditions set forth
in Article 11 of the Indenture and to be bound by all other applicable
provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or
future director, officer, employee, incorporator, shareholder or agent of the
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Notes, any Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes. Such waiver or release may not be
effective to waive or release liabilities under the federal securities laws.
D-1
4. NEW YORK LAW TO GOVERN. The internal law of the State
of New York shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are
for convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guarantor and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated:_________________, _____
[Guarantor]
By:
------------------------------------
Name:
Title:
_________________________, as Trustee
By:
----------------------------------
Name:
Title:
D-2
SCHEDULE 1
LIST OF GUARANTORS
[INSERT LIST OF THE REORGANIZATION SUBSIDIARIES OTHER THAN THE PHCMI DEBTORS]
I-1
