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SUN HEALTHCARE GROUP, INC.
ISSUER,
THE GUARANTORS NAMED HEREIN,
AND
FIRST TRUST NATIONAL ASSOCIATION,
TRUSTEE
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INDENTURE
Dated as of July 8, 1997
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$250,000,000
9 1/2% Senior Subordinated Notes due 2007
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Incorporation by Reference of TIA . . . . . . . . . . . . . 19
SECTION 1.3. Rules of Construction . . . . . . . . . . . . . . . . . . . 19
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.2. Execution and Authentication . . . . . . . . . . . . . . . . 20
SECTION 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . . 21
SECTION 2.4. Paying Agent to Hold Assets in Trust . . . . . . . . . . . . 22
SECTION 2.5. Securityholder Lists . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . . 22
SECTION 2.7. Replacement Securities . . . . . . . . . . . . . . . . . . . 28
SECTION 2.8. Outstanding Securities . . . . . . . . . . . . . . . . . . . 29
SECTION 2.9. Treasury Securities . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.14. Offer to Purchase by Application of Excess Proceeds . . . . 31
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.2. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.3. Selection of Securities to Be Redeemed . . . . . . . . . . . 35
SECTION 3.4. Notice of Redemption . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.5 Effect of Notice of Redemption . . . . . . . . . . . . . . . 36
SECTION 3.6. Deposit of Redemption Price . . . . . . . . . . . . . . . . 36
SECTION 3.7. Securities Redeemed in Part . . . . . . . . . . . . . . . . 37
i
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ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities . . . . . . . . . . . . . . . . . . . 37
SECTION 4.2. Maintenance of Office or Agency . . . . . . . . . . . . . . 37
SECTION 4.3. Limitation on Restricted Payments. . . . . . . . . . . . . . 38
SECTION 4.4. Corporate and Partnership Existence . . . . . . . . . . . . 40
SECTION 4.5. Payment of Taxes and Other Claims . . . . . . . . . . . . . 40
SECTION 4.6. Maintenance of Properties and Insurance . . . . . . . . . . 41
SECTION 4.7. Compliance Certificate; Notice of Default . . . . . . . . . 41
SECTION 4.8. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.9. Limitation on Status as Investment Company . . . . . . . . . 42
SECTION 4.10. Limitation on Transactions with Affiliates . . . . . . . . . 42
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness
and Issuance of Preferred Stock. . . . . . . . . . . . . . . 43
SECTION 4.12. Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries. . . . . . . . . . . . . 45
SECTION 4.13. Limitations on Layering Indebtedness;
Redeemable Stock; Liens Securing Indebtedness . . . . . . . 46
SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock . . . . . 46
SECTION 4.15. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . 48
SECTION 4.17 Limitations on Lines of Business . . . . . . . . . . . . . . 48
SECTION 4.16. Rule 144A Information Requirement. . . . . . . . . . . . . . 48
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation . . . . . . . . 48
SECTION 5.2. Successor Corporation Substituted . . . . . . . . . . . . . 50
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment . . 52
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . 54
SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities. 55
ii
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SECTION 6.6. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.9. Rights and Remedies Cumulative . . . . . . . . . . . . . . . 57
SECTION 6.10. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . 57
SECTION 6.11. Control by Holders . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.12. Waiver of Existing or Past Default . . . . . . . . . . . . . 57
SECTION 6.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . . 58
SECTION 6.14. Restoration of Rights and Remedies . . . . . . . . . . . . . 58
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . . 61
SECTION 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.6. Reports by Trustee to Holders . . . . . . . . . . . . . . . 62
SECTION 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . 62
SECTION 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . . 63
SECTION 7.9. Successor Trustee by Merger, Etc. . . . . . . . . . . . . . 64
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . 64
SECTION 7.11. Preferential Collection of Claims Against Company . . . . . 64
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance
or Covenant Defeasance . . . . . . . . . . . . . . . . . . . 65
SECTION 8.2. Legal Defeasance and Discharge . . . . . . . . . . . . . . . 65
SECTION 8.3. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.4. Conditions to Legal or Covenant Defeasance . . . . . . . . . 66
SECTION 8.5. Deposited Cash and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions . . . . 67
SECTION 8.6. Repayment to the Company . . . . . . . . . . . . . . . . . . 68
SECTION 8.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 68
iii
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders . . . . . 69
SECTION 9.2. Amendments, Supplemental Indentures and Waivers
with Consent of Holders . . . . . . . . . . . . . . . . . . 70
SECTION 9.3. Compliance with TIA . . . . . . . . . . . . . . . . . . . . 71
SECTION 9.4. Revocation and Effect of Consents . . . . . . . . . . . . . 71
SECTION 9.5. Notation on or Exchange of Securities . . . . . . . . . . . 72
SECTION 9.6. Trustee to Sign Amendments, Etc. . . . . . . . . . . . . . . 72
SECTION 9.7 Agreement by Representative Under the Credit Agreement . . . 72
ARTICLE X
RESERVED
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. Repurchase of Securities at Option of
the Holder Upon a Change of Control . . . . . . . . . . . . 73
ARTICLE XII
GUARANTEE
SECTION 12.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.2. Execution and Delivery of Guarantee . . . . . . . . . . . . 77
SECTION 12.3. Certain Bankruptcy Events . . . . . . . . . . . . . . . . . 78
SECTION 12.4. Limitation on Merger, Consolidation, Etc. of Guarantors;
Release of Certain Guarantors. . . . . . . . . . . . . . . . 78
SECTION 12.5. Future Guarantors . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE XIII
SUBORDINATION
SECTION 13.1. Securities Subordinated to Senior Debt . . . . . . . . . . . 79
SECTION 13.2. No Payment on Securities in Certain Circumstances . . . . . 79
SECTION 13.3. Securities Subordinated to Prior Payment of
iv
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All Senior Debt on Dissolution, Liquidation or
Reorganization . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.4. Securityholders to Be Subrogated to Rights of
Holders of Senior Debt . . . . . . . . . . . . . . . . . . . 82
SECTION 13.5. Obligations of the Company and the Guarantors Unconditional. 83
SECTION 13.6. Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.7. Application by Trustee of Assets Deposited with It . . . . . 83
SECTION 13.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company, the Guarantors or Holders of Senior Debt . . 84
SECTION 13.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities . . . . . . . . . . . . . . . . 84
SECTION 13.10. Right of Trustee to Hold Senior Debt . . . . . . . . . . . . 85
SECTION 13.11. Article XIII Not to Prevent Events of Default . . . . . . . 85
SECTION 13.12. No Fiduciary Duty of Trustee to Holders of Senior Debt . . . 85
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 14.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 14.3. Communications by Holders with Other Holders . . . . . . . . 87
SECTION 14.4. Certificate and Opinion as to Conditions Precedent . . . . . 87
SECTION 14.5. Statements Required in Certificate or Opinion . . . . . . . 87
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar . . . . . . . . . 88
SECTION 14.7. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 14.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 14.9. No Adverse Interpretation of Other Agreements . . . . . . . 89
SECTION 14.10. No Recourse Against Others . . . . . . . . . . . . . . . . . 89
SECTION 14.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.12. Duplicate Originals . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.14. Table of Contents, Headings, Etc. . . . . . . . . . . . . . 89
SECTION 14.15. Qualification of Indenture . . . . . . . . . . . . . . . . . 89
SECTION 14.16. Registration Rights . . . . . . . . . . . . . . . . . . . . 90
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 91
EXHIBIT A FORM OF SECURITY . . . . . . . . . . . . . . . . . . . . . . A-1
v
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
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310(a)(1) . . . . . . . . . . . . . . . . . . . . . .
7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . .
7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . .
N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . .
N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . .
7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . .
7.8
7.10;
14.2
(c) . . . . . . . . . . . . . . . . . . . . . . . .
N.A.
311(a). . . . . . . . . . . . . . . . . . . . . . .
7.11
(b) . . . . . . . . . . . . . . . . . . . . . . .
7.11
(c) . . . . . . . . . . . . . . . . . . . . . . .
N.A.
312(a). . . . . . . . . . . . . . . . . . . . . . .
2.5
(b) . . . . . . . . . . . . . . . . . . . . . . .
14.3 . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . .
14.3
313(a). . . . . . . . . . . . . . . . . . . . . . .
7.6
(b)(1). . . . . . . . . . . . . . . . . . . . . .
N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . .
7.6
vi
TIA INDENTURE
SECTION SECTION
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(c) . . . . . . . . . . . . . . . . . . . . . . .
7.6;
14.2
(d) . . . . . . . . . . . . . . . . . . . . . . .
7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . .
4.7(a);
4.8;
12.2
(b) . . . . . . . . . . . . . . . . . . . . . . .
N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . .
2.2;
7.2;
12.2
(c)(2). . . . . . . . . . . . . . . . . . . . . .
7.2;
12.2
(c)(3). . . . . . . . . . . . . . . . . . . . . .
N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . .
N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . .
14.5
(f) . . . . . . . . . . . . . . . . . . . . . . .
N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . .
7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . .
7.5;
7.6;
vii
TIA INDENTURE
SECTION SECTION
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14.2
(c) . . . . . . . . . . . . . . . . . . . . . . .
7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . .
6.11;
. . . . . . . . . . . . . . . . . . . . . . .
7.1(b),
. . . . . . . . . . . . . . . . . . . . . . .
(c)
(e) . . . . . . . . . . . . . . . . . . . . . . .
6.13
316(a)(last sentence). . . . . . . . . . . . . . . .
2.9
(a)(1)(A). . . . . . . . . . . . . . . . . . . . .
6.11
(a)(1)(B). . . . . . . . . . . . . . . . . . . . .
6.12
(a)(2) . . . . . . . . . . . . . . . . . . . . . .
N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . .
6.12;
6.7
317(a)(1). . . . . . . . . . . . . . . . . . . . . .
6.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . .
6.4
(b). . . . . . . . . . . . . . . . . . . . . . . .
2.4
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
viii
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ix
INDENTURE, dated as of July 8, 1997, by and among Sun Healthcare
Group, Inc., a Delaware corporation (the "COMPANY"), the Guarantors referred
to below and First Trust National Association, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's
9 1/2% Series A Senior Subordinated Notes due 2007 and the class of 9 1/2%
Series B Senior Subordinated Notes due 2007 to be exchanged for the 9 1/2%
Series A Senior Subordinated Notes due 2007:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or
in contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For 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, shall mean 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; PROVIDED that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"APPROVED JURISDICTION" means the United States of America, Canada,
the United Kingdom and any other member nation of the Organization for
Economic Development and Cooperation.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any assets, including, without limitation, by way of a sale
and leaseback or by merger or consolidation (PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company and its Subsidiaries taken as a whole will be governed by the
Section 5.1 or 11.1 and not by Section 4.14), and (ii) the issuance or sale
by the Company or any of its Subsidiaries of Equity Interests of any of the
Company's Subsidiaries, in the case of either clause (i) or (ii), whether in
a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $5 million or (b) for Net Proceeds in excess of $5
million. Notwithstanding the foregoing: (a) a transfer of assets by the
Company to a Subsidiary or by a Subsidiary to the Company or to another
Subsidiary, (b) an issuance of Equity Interests by a Subsidiary to the
Company or to another Subsidiary, and (c) a Nursing Facility Swap will not be
deemed to be an Asset Sale.
"ASSET SALE OFFER" shall have the meaning specified in Section 4.14.
"ASSET SALE PAYMENT" shall have the meaning specified in Section 4.14.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CAREERSTAFF COMPANY" means (i) CareerStaff Unlimited, Inc., a
Delaware corporation and a Wholly Owned Subsidiary of the Company, and its
direct and indirect Wholly Owned Subsidiaries (collectively, "CareerStaff
Unlimited") so long as such persons conduct no material business except
acquiring, holding or selling equity or other interests in other CareerStaff
Companies or (ii) any Subsidiary of the Company (a) in which CareerStaff
Unlimited is the general partner, (b) which is no less than 5% and no more than
10% owned by persons that are not Affiliates of the Company and (c)
substantially all of whose business consists of temporary therapy staffing.
2
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the government of an
Approved Jurisdiction or any agency or instrumentality thereof having
maturities of not more than one year from the date of acquisition, (iii)
certificates of deposit with maturities of one year or less from the date of
acquisition, bankers' acceptances (or, with respect to foreign banks, similar
instruments) with maturities not exceeding one year and overnight bank
deposits, in each case with any domestic commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia, or any United States branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $500
million, (iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper having the highest
rating obtainable from Xxxxx'x or S&P and in each case maturing within one
year after the date of acquisition, and (vi) investments in money market
funds which invest substantially all their assets in securities of the types
described in the foregoing clauses (i) through (v).
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of
the Company and its Subsidiaries taken as a whole to any Person or group (as
such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
other than to a Person or group who, prior to such transaction, held a
majority of the voting power of the voting stock of the Company, (ii) the
acquisition by any Person or group (as defined above) of a direct or indirect
interest in more than 50% of the voting power of the voting stock of the
Company, by way of merger or consolidation or otherwise, or (iii) the first
day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL PAYMENT" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning specified
in Section 11.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMENCEMENT DATE" shall have the meaning specified in Section 2.14.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus,
without duplication, the sum of (i) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent
such provision for taxes was included in computing such Consolidated Net
Income, (ii) the Fixed Charges of such Person and its Subsidiaries for such
period, to the extent that such Fixed
3
Charges were deducted in computing such Consolidated Net Income, (iii)
depreciation and amortization (including amortization of goodwill and other
intangibles) of such Person and its Subsidiaries for such period to the
extent that such depreciation and amortization were deducted in computing
such Consolidated Net Income, and (iv) other non-cash items of such Person
and its Subsidiaries for such period to the extent such non-cash items were
deducted in computing such Consolidated Net Income, less the amount of all
cash payments made by such person or any of its Subsidiaries during such
period to the extent such payments relate to non-cash charges that were added
back in determining Consolidated Cash Flow for such period or any prior
period, in each case on a consolidated basis and determined in accordance
with GAAP. Notwithstanding the foregoing, the provision for taxes on the
income or profits of, the depreciation and amortization of, and the other
non-cash items of, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Subsidiary was
included in calculating the Consolidated Net Income of such Person and only
if a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Subsidiary without prior approval (that
has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"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; PROVIDED that (i) the Net Income,
if positive, of any Person that is not a Subsidiary or that is accounted for
by the equity method of accounting shall be included only to the extent of
the amount of dividends or distributions paid in cash to the referent Person
or a Wholly Owned Subsidiary thereof, but in any case not in excess of such
Person's pro rata share of such Person's Net Income for such period, (ii) the
Net Income, if positive, of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iv) the
cumulative effect of a change in accounting principles shall be excluded and
(v) 1996 non-recurring charges in the pre-tax amount of up to $26 million
shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of Preferred Stock (other than Redeemable
Stock), less all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made in accordance with GAAP as a result of the acquisition of such
business) subsequent to the date of this Indenture in the book value of any
asset owned by such Person or a consolidated Subsidiary of such Person, and
excluding the cumulative effect of a change in accounting principles, all as
determined in accordance with GAAP.
4
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.
"CORPORATE TRUST OFFICE" means the office of the Trustee in the
Borough of Manhattan, The City of New York.
"COVENANT DEFEASANCE" shall have the meaning specified in Section 8.3.
"CREDIT AGREEMENT" means that certain Fourth Amended and Restated
Credit Agreement, dated as of October 29, 1996, by and among the Company, The
Mediplex Group, Inc. and NationsBank of Texas, N.A. and the other banks that
are parties thereto, providing for $490 million in aggregate principal amount
of Senior Revolving Debt, including any related notes, collateral documents,
instruments and agreements executed in connection therewith, and in each case
as amended, increased, modified, extended, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event or condition that is or with the passage of
time or the giving of notice or both would be an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 3 and 6 thereof.
"DEPOSITORY" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section
2.3 as the Depository with respect to the Securities, until a successor shall
have been appointed and become such pursuant to the applicable provision of
this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" shall have the meaning specified in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
5
"EXCHANGE SECURITIES" means the 9 1/2% Series B Senior Subordinated
Notes due 2007, as supplemented from time to time in accordance with the
terms hereof, to be issued pursuant to this Indenture in connection with the
offer to exchange Securities for the Initial Securities that may be made by
the Company and the Guarantors pursuant to the Registration Rights Agreement
that contains the information referred to in footnotes 1 and 2 to the form of
Security attached hereto as Exhibit A.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture, until such amounts
are repaid.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event
that such Person or any of its Subsidiaries incurs, assumes, guarantees,
redeems or repays any Indebtedness (other than revolving credit borrowings)
or issues or redeems Preferred Stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption or repayment of Indebtedness,
or such issuance or redemption of Preferred Stock, as if the same had
occurred at the beginning of the applicable Reference Period. In addition,
for purposes of making the computation referred to above, (i) acquisitions
that have been made by the Company or any of its Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the Reference Period or subsequent to such Reference
Period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the Reference Period, and (ii) the Consolidated
Cash Flow and Fixed Charges attributable to operations or businesses disposed
of prior to the Calculation Date shall be excluded (but in the case of Fixed
Charges, only to the extent that the obligations giving rise to such Fixed
Charges would no longer be obligations contributing to such Person's Fixed
Charges subsequent to the Calculation Date).
"FIXED CHARGES" means, with respect to any Person for any period,
the sum (without duplication and determined in each case in accordance with
GAAP) of (i) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of
letters of credit or bankers' acceptance financings, and net payments (if
any) pursuant to Hedging Obligations) and (ii) the consolidated interest
expense of such Person and its Subsidiaries that was capitalized during such
period, and (iii) interest under any guarantee by such Person or any of its
Subsidiaries of Indebtedness of any other Person in the amount of interest
attributable to the Indebtedness guaranteed and (iv) the product of (a) all
cash dividend payments (and non-cash dividend payments in the case of a
Person that is a Subsidiary) on any series of Preferred Stock of such Person,
times (b) a fraction, the numerator of which is one and the denominator of
which is one
6
minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP; PROVIDED that in the event any cash dividend
payment is deductible for federal, state and/or local tax purposes, the
amount of the tax deduction relating to such cash dividend payment for such
period shall be subtracted from the Fixed Charges for such Person for such
period.
"FOREIGN COMPANIES" means any Subsidiary of the Company which (i)
is not organized under the laws of the United States, any state thereof or
the District of Columbia and (ii) conducts substantially all of its business
operations in a country other than the United States of America.
"FUTURE SUBSIDIARY GUARANTOR" shall have the meaning specified in
Section 4.17.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, applied on a consistent basis and as in effect from time to time.
"GLOBAL SECURITY" means a Security that contains the information
referred to in footnotes 3 and 8 to the form of Security attached hereto as
Exhibit A.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTEE" shall have the meaning provided in Section 12.1.
"GUARANTORS" means (i) the Present Subsidiary Guarantors and (ii) any
Future Subsidiary Guarantors that become Guarantors pursuant to the terms of
this Indenture, but excluding (a) any Persons whose Guarantees have been
released pursuant to the terms of this Indenture.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts or currency swap agreements and (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security
is registered on the Registrar's books.
"INCUR" or "INCUR" shall have the meaning specified in Section 4.11 of
this Indenture.
7
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) any Redeemable Stock of such Person, (ii) any liabilities and obligations of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, (iii) all liabilities and
obligations of any other Person secured by a Lien on any asset of such Person,
whether or not such indebtedness is assumed by such Person (the amount thereof
being deemed to equal such asset's fair market value), and (iv) to the extent
not otherwise included, the guarantee by such Person of any liabilities or
obligations of any other Person of the kind described in the preceding clauses
(i)-(iii).
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INITIAL PURCHASERS" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, Credit Suisse First Boston Corporation, X.X. Xxxxxx Securities Inc.
and NationsBanc Capital Markets, Inc., severally, and not jointly.
"INITIAL SECURITIES" means the 9 1/2% Series A Senior Subordinated
Notes due 2007, as supplemented from time to time in accordance with the terms
hereof, issued under this Indenture that contains the information referred to in
footnotes 1, 2, 4, 5, 6, 7 and 9 to the form of Security attached hereto as
Exhibit A.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Securities.
"INVESTMENT" by any Person in any other Person means (without
duplication) (i) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other Person or any agreement to make any such acquisition; (ii) the making
by such Person of any deposit with, or advance, loan or other extension of
credit to, such other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such other Person) or any commitment to make any such
advance, loan or extension (but excluding accounts receivable or deposits
arising in the ordinary course of business); and (iii) other than guarantees of
Indebtedness of the Company or any Subsidiary to the extent permitted by Section
4.11, the entering into by such Person of any guarantee of, or other credit
support or contingent obligation with respect to, Indebtedness or other
liability of such other Person; PROVIDED THAT Investments shall not be deemed to
include extensions of trade credit by such
8
Person or any of its Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of such Person or such Subsidiary, as
the case may be.
"ISSUE DATE" means the date of the first issuance of the Securities
under this Indenture.
"JUNIOR SECURITY" means any Qualified Equity Interests and any
Indebtedness of the Company or a Guarantor, as applicable, that is subordinated
in right of payment to Senior Debt at least to the same extent as the Securities
or the Guarantee, as applicable, and has no scheduled installment of principal
due, by redemption, sinking fund payment or otherwise, on or prior to the
Maturity Date.
"LEGAL DEFEASANCE" shall have the meaning specified in Section 8.2.
"LEGAL HOLIDAY" shall have the meaning specified in Section 13.7.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"LIQUIDATED DAMAGES" means such liquidated damages as defined in the
Registration Rights Agreement.
"MATURITY DATE" means, when used with respect to any Security, the
date specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Offer to
Purchase).
"MOODY'S" means Xxxxx'x Investors Services, Inc. and its successors.
"NET INCOME" means, with respect to any Person, the consolidated net
income (loss) of such Person, determined in accordance with GAAP, excluding,
however, the effect of any extraordinary or other material non-recurring gain or
loss outside the ordinary course of business (including without limitation any
gain from the sale or other disposition of assets outside of the ordinary course
of business or from the issuance or sale of any Equity Interests), together with
any related provision for taxes on such extraordinary or other material non-
recurring gain or loss.
"NET PROCEEDS" means the aggregate cash or Cash Equivalent proceeds
received by the Company or any of its Subsidiaries in respect of any Asset Sale,
net of the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees, and
9
sales commissions) and any other expenses incurred or to be incurred by the
Company or a Subsidiary as a direct result of the sale of such assets
(including, without limitation, severance, relocation, lease termination and
other similar expenses), taxes actually paid or due and payable as a result
thereof in the year of sale or the immediately following year (after taking
into account the application of deductions, net operating losses and other
tax attributes), amounts required to be applied to the repayment of
Indebtedness (other than Subordinated Indebtedness) secured by a Lien on the
asset or assets that were the subject of such Asset Sale, any reserve for
adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP and all distributions and other payments required to
be made and actually made to minority interests holders in Subsidiaries as a
result of such Asset Sale; PROVIDED, that if the instrument or agreement
governing such Asset Sale requires the transferor to maintain a portion of
the purchase price in escrow (whether as a reserve for adjustment of the
purchase price or otherwise) or to provide for indemnification of the
transferee for specified liabilities in maximum specified amount, the portion
of the cash or Cash Equivalents that is actually placed in escrow or
segregated and set aside by the transferor for such indemnification
obligations shall not be deemed to be Net Proceeds until the escrow
terminates or the transferor ceases to segregate and set aside such funds, in
whole or in part, and then only to the extent of the proceeds released from
escrow to the transferor or that are no longer segregated and set aside by
the transferor.
"NON-CASH CONSIDERATION" means any non-cash or non-Cash Equivalent
consideration received by the Company or a Subsidiary of the Company in
connection with an Asset Sale and any non-cash or non-Cash Equivalent
consideration received by the Company or any of its Subsidiaries upon
disposition thereof.
"NON-QUALIFIED ASSET SALE" means an Asset Sale in which the Non-Cash
Consideration received by the Company and its Subsidiaries exceeds 20% of the
total consideration received in connection with such Asset Sale calculated in
accordance with clause (x), but not clause (y), of the proviso to the first
sentence of Section 4.14.
"NURSING FACILITY" means a nursing facility, hospital, outpatient
clinic, assisted living center, hospice, long-term care facility, subacute care
facility or other facility that is used or useful in the provision of healthcare
services.
"NURSING FACILITY SWAP" means an exchange of assets by the Company or
one or more Subsidiaries of the Company or of the Equity Interests of a
Subsidiary for one or more Nursing Facilities and/or one or more Related
Businesses or of the Equity Interests of any Person owning one or more Nursing
Facilities and/or one or more Related Businesses.
"OBLIGATIONS" means any principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFER AMOUNT" shall have the meaning specified in Section 2.14.
10
"OFFER PERIOD" shall have the meaning specified in Section 2.14.
"OFFICER" means, with respect to the Company or any Guarantor, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary of the Company or such
Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company or such
Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or such Guarantor and otherwise complying
with the requirements of Sections 14.4 and 14.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
14.4 and 14.5.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PAYMENT DEFAULT" means any failure to pay any scheduled installment
of principal on any Indebtedness within the grace period provided for such
payment in the documentation governing such Indebtedness.
"PAYMENT NOTICE" shall have the meaning specified in Section 13.2.
"PERMITTED LIENS" means (i) Liens in favor of the Company; (ii) Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company or becomes a
Subsidiary of the Company, PROVIDED that such Liens were in existence prior to
the contemplation of such merger, consolidation or acquisition and do not extend
to any assets other than those of the Person merged into or consolidated with
the Company or that becomes a Subsidiary of the Company; (iii) Liens on property
existing at the time of acquisition thereof by the Company or any Subsidiary of
the Company, PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any property other than
that acquired; (iv) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (v) Liens securing Senior Debt
outstanding under the Credit Agreement, Liens securing Existing Indebtedness,
and Liens on the Equity Interests in or assets of Foreign Companies securing
Indebtedness outstanding under Foreign Company credit agreements; (vi) 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 concluded, PROVIDED that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (vii) Liens to secure Permitted Refinancing Indebtedness
incurred to refinance Indebtedness that was secured by a Lien permitted under
this Indenture and that was incurred in accordance with the provisions of this
Indenture, PROVIDED that such Liens do not extend to or cover any property or
assets of the Company or any of its Subsidiaries other than assets or property
securing the Indebtedness so refinanced; (viii) Purchase Money Liens; (ix) any
interest or title of a lessor under any Capital Lease Obligation otherwise
permitted by this Indenture; (x) Liens upon
11
specific items of inventory or equipment and proceeds of the Company or any
Subsidiary securing its obligations in respect of bankers' acceptances issued
or created for its account (whether or not under the Credit Agreement) to
facilitate the purchase, shipment, or storage of such inventory and
equipment; (xi) Liens securing reimbursement obligations with respect to
letters of credit (whether or not issued under the Credit Agreement)
otherwise permitted under this Indenture and issued in connection with the
purchase of inventory or equipment by the Company or any Subsidiary in the
ordinary course of business; (xii) Liens to secure (or encumbering deposits
securing) obligations arising from warranty or contractual service
obligations of the Company or any Subsidiary, including rights of offset and
setoff; (xiii) Liens securing Acquired Debt otherwise permitted by this
Indenture, PROVIDED that (A) the Indebtedness secured shall not exceed the
fair market value of the assets so acquired (such fair market value to be
determined in good faith by the Board of Directors of the Company at the time
of such acquisition) and (B) such Indebtedness shall be incurred, and the
Lien securing such Indebtedness shall be created, within 12 months after such
acquisition; (xiv) Liens securing Hedging Obligations agreements relating to
Indebtedness otherwise permitted under this Indenture; (xv) other Liens on
assets of the Company or any of its Subsidiaries securing Indebtedness that
is permitted by the terms of this Indenture to be outstanding having an
aggregate principal amount at any one time outstanding not to exceed $5
million; (xvi) Liens on Medicare, Medicaid or other patient accounts
receivable of the Company or its Subsidiaries; (xvii) Liens on real estate
and related personal property (including, but not limited to, sale and
leasebacks of and mortgages on real estate and related personal property) not
to exceed an aggregate amount equal to $60 million per year; (xviii) Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and
other Liens imposed by law incurred in the ordinary course of business; (xix)
easements, rights-of-way, zoning restrictions, reservations, encroachments
and other similar encumbrances in respect of real property; and (xx) Liens
securing stay and appeal bonds or judgment Liens in connection with any
judgment not giving rise to a Default under this Indenture.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Subsidiaries (a) issued in exchange for, or the net
proceeds of which are used solely to extend, refinance, renew, replace, defease
or refund, in whole or in part, or (b) constituting an amendment, modification
or supplement to, or a deferral or renewal of ((a) and (b) above are,
collectively, a "Refinancing"), other Indebtedness of the Company or any of its
Subsidiaries; PROVIDED that: (i) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the lesser of (A) the principal amount
of the Indebtedness so Refinanced and (B) if such Indebtedness being Refinanced
was issued with original issue discount, the accreted value thereof (determined
in accordance with GAAP) (plus, in each case, the amount of any reasonable
expenses incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final stated maturity later than the final stated maturity
of, and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being Refinanced); (iii)
if the Indebtedness being Refinanced is Subordinated Indebtedness, such
Permitted Refinancing Indebtedness has a final stated maturity later than the
final stated maturity of, and is subordinated in right of payment to, the
Securities on terms at least as favorable to the Holders as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased
12
or refunded; and (iv) if the obligor on the Indebtedness being Refinanced is
a Subsidiary that is not a Guarantor, such Permitted Refinancing Indebtedness
shall only be incurred by such Subsidiary.
"PERSON" or "PERSON" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership, limited
liability company, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
"PLAN OF LIQUIDATION" means a plan that provides for, contemplates or
the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than as an entirety or substantially as an entirety and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of the
Company to holders of Capital Stock of the Company.
"PREFERRED STOCK" means an Equity Interest of any class or classes of
a Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
"PRESENT SUBSIDIARY GUARANTORS" means Accelerated Care Plus, LLC;
Bay Colony Health Service, Inc.; Bergen Eldercare, Inc.; Cal-Med, Inc.;
Clipper Home Affiliates, Inc.; Clipper Home of North Xxxxxx, Inc.; Clipper
Home of Portsmouth, Inc.; Clipper Home of Rochester, Inc.; Clipper Home of
Wolfeboro, Inc.; Community Re-Entry Services of Cortland, Inc.; G-WZ of
Stamford, Inc.; Xxxxxxx Nursing Home, Inc.; HC, Inc.; HTA of New Jersey,
Inc.; Xxxxxxx Place of Dover, Inc.; Xxxxxxx Place of Exeter, Inc.; Xxxxxxx
Place of Nashua, Inc.; Living Services, Inc.; LTC Staffinders, Inc.; Manatee
Springs Nursing Center, Inc.; Masthead Corporation; Mediplex Atlanta
Rehabilitation Institute, Inc.; Mediplex of Colorado, Inc.; Mediplex of
Concord, Inc.; Mediplex of Connecticut, Inc.; Mediplex of Kentucky Inc.;
Mediplex of Maryland, Inc.; Mediplex of Massachusetts, Inc.; Mediplex of New
Hampshire, Inc.; Mediplex of New Jersey, Inc.; Mediplex of New York, Inc.;
Mediplex of Ohio, Inc.; Mediplex of Tennessee, Inc.; Mediplex of Virginia,
Inc.; Mediplex Management, Inc.; Mediplex Management of Palm Beach County,
Inc.; Mediplex Management of Texas, Inc.; Mediplex Rehabilitation of
Massachusetts, Inc.; New Bedford Acquisition Corp.; New Bedford Nursing
Center, Inc.; Nursing Home, Inc.; Oakview Treatment Centers of Kansas, Inc.;
P.M.N.F. Management, Inc.; Pharmacy Factors of California, Inc.; Pharmacy
Factors of Florida, Inc.; Pharmacy Factors of Texas, Inc.; Quality Care
Holding Corp.; Quality Nursing Care of Massachusetts, Inc.; Special Medical
Services, Inc.; Xxxxxxxx Land, Inc.; Sun Alliance, Inc.; SunBridge, Inc.; Sun
Care Corp.; SunCare Respitory Services, Inc.; SunChoice Medical Supply, Inc.;
Sundance Rehabilitation Corporation; SunFactors, Inc.; Sun Lane Purchase
Corporation; Sunmark of New Mexico; SunQuest Consulting, Inc.; Sunrise
Healthcare of Colorado, Inc.; Sunrise Healthcare of Florida, Inc; Sunrise
Healthcare Corporation; SunScript Pharmacy Corporation; Sunrise Rehab of
Colorado, Inc.; SunSpectrum Outpatient Rehabilitation-Concord, Inc.; The
Mediplex Group, Inc.; Valley View Psychiatric Services, Inc; and Worcester
Nursing Center, Inc.
13
"PRINCIPAL" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"PROPERTY" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"PURCHASE AGREEMENT" means that certain Purchase Agreement dated July 1,
1997 by and among the Company, the Guarantors and the Initial Purchasers, as
such agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"PURCHASE DATE" shall have the meaning specified in Section 2.14.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness of a Person to any
seller or other Person incurred to finance the acquisition or construction
(including in the case of a Capital Lease Obligation, the lease) of any asset
or property which is incurred within 180 days of such acquisition or
completion of construction and is secured only by the assets so financed.
"PURCHASE MONEY LIEN" means a Lien granted on an asset or property to
secure Purchase Money Indebtedness permitted to be incurred under this
Indenture and incurred solely to finance the acquisition of construction of
such asset or property; PROVIDED that such Lien encumbers only such asset or
property and is granted within 180 days of such acquisition or completion of
construction.
"QUALIFIED EQUITY INTERESTS" shall mean all Equity Interests of the
Company other than Redeemable Stock of the Company.
"RECORD DATE" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day, or, if applicable, as specified in
Section 2.12.
"REDEEMABLE STOCK" means any Equity Interest that, 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 mandatorily redeemable (other than redeemable only for
Qualified Equity Interests of the issuer), pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date on which the Securities mature.
"REDEMPTION DATE," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security attached hereto as Exhibit
A.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to
Paragraph 5 in the form of Security attached
14
hereto as Exhibit A, which shall include, without duplication, in each case,
accrued and unpaid interest and Liquidated Damages, if any, to the Redemption
Date.
"REFERENCE PERIOD" with regard to any Person means the four full fiscal
quarters (or such lesser period during which such Person has been in
existence) for which internal financial statements are available ended
immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Securities or this Indenture.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the date hereof by and among the Initial Purchasers, the Company
and the Guarantors, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"RELATED BUSINESS" means the business conducted by the Company and its
Subsidiaries as of the date of this Indenture and any and all healthcare
service businesses that in good faith judgment of the Board of Directors of
the Company are materially related businesses. Without limiting the
generality of the foregoing, Related Business shall include the operation of
Nursing Facilities, long-term and specialty healthcare services, skilled
nursing care, subacute care, rehabilitation programs, pharmaceutical
services, health maintenance organizations, insurance companies, preferred
provider organizations or any other form of managed care business, health
care information services business, distribution of medical supplies,
geriatric care and home healthcare or other businesses which provide
ancillary services to long-term and specialty healthcare facilities.
"REPRESENTATIVE" means NationsBank, as representative of the lenders
party to the Credit Agreement, until a successor replaces it pursuant to the
Credit Agreement, and thereafter means such successor.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions, any Investment, other than (i) Investments in Cash Equivalents,
(ii) Investments in a Subsidiary of the Company, (iii) Investments in any
Person that as a consequence of such Investment becomes a Subsidiary of the
Company, (iv) Investments existing on the date of this Indenture, (v)
accounts receivable, advances, loans, extensions of credit created or
acquired in the ordinary course of business, (vi) Investments made as a
result of the receipt of Non-Cash Consideration from an Asset Sale that was
made pursuant to Section 4.14, (vii) Investments made as the result of the
guarantee by the Company or any of its Subsidiaries of Indebtedness of a
Person or Persons other than the Company or any Subsidiary of the Company
that is secured by Liens on assets sold or otherwise disposed of by the
Company or such Subsidiary to such Person or Persons, provided that such
Indebtedness was in existence prior to the contemplation of such sale or
other disposition and that the terms of such guarantee permit the Company or
such Subsidiary to foreclose on the pledged or mortgaged assets if the
Company or such Subsidiary is required to perform under such guarantee, and
(viii) Investments in any Related Business.
15
"RESTRICTED SECURITY" means a Security, unless or until it has been (i)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering it or (ii) distributed to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act; PROVIDED, that in no case shall an Exchange Security issued
in accordance with this Indenture and the terms and provisions of the
Registration Rights Agreement be a Restricted Security.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies,
and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the Initial Securities and, when and if
issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SECURITIES CUSTODIAN" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means the Person in whose name a Security is
registered on the Registrar's books.
"SENIOR DEBT" of the Company or any Guarantor means Indebtedness
(including any monetary obligation in respect of the Credit Agreement, and
interest, whether or not allowable, accruing on Indebtedness incurred
pursuant to the Credit Agreement after the filing of a petition initiating
any proceeding under any bankruptcy, insolvency or similar law) of the
Company or such Guarantor arising under the Credit Agreement unless, by the
terms of the instrument creating or evidencing such indebtedness, it is
expressly designated not to be senior in right of payment to the Securities
or the applicable Guarantee; PROVIDED that in no event shall Senior Debt
include (i) Indebtedness to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (ii)
Indebtedness incurred in violation of the terms of this Indenture, (iii)
Indebtedness to trade creditors, (iv) Redeemable Stock and (v) any liability
for taxes owed or owing by the Company or such Guarantor.
"SENIOR REVOLVING DEBT" means revolving credit loans and letters of
credit outstanding from time to time under the Credit Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 or Regulation
S-X, promulgated pursuant to the Act, as such Regulation is in effect on the
date of this Indenture.
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"SPECIAL RECORD DATE" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"STOCKHOLDERS' EQUITY" means, with respect to any Person as of any date,
the stockholders' equity of such Person determined in accordance with GAAP as
of the date of the most recent available internal financial statements of
such Person, and calculated on a pro forma basis to give effect to any
acquisition or disposition by such person consummated or to be consummated
since the date of such financial statements and on or prior to the date of
such calculation.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Securities or such
Subsidiary's Guarantee of the Securities, as applicable.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"SUN SYSTEMS, INC." means Sun Systems, Inc., a Delaware corporation, in
which the Company expects to have the right to acquire a majority of the
outstanding Equity Interests.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
"TRANSFER RESTRICTED SECURITIES" means Securities that bear or are
required to bear the legend set forth in Section 2.6.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TRUST OFFICER" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons
who at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"U.K. CREDIT AGREEMENTS" means (i) that certain Facility Agreement, dated
as of August 30, 1996, between Ashbourne plc, Ashbourne Homes (Developments)
Limited, Ashbourne Homes plc, Larstrike Limited, Sedbury Park Limited
(collectively, the "Ashbourne Group"), The
17
Governor and Company of the Bank of Scotland, and the other banks and
financial institutions that are parties thereto, providing for L25,000,000 in
aggregate principal amount of revolving credit; (ii) that certain Facility
Agreement, dated as of August 30, 1996, between the Ashbourne Group, Midland
Bank plc, and the other banks and financial institutions that are parties
thereto, providing for L25,000,000 in aggregate principal amount of revolving
credit and (iii) that certain Credit Facility Agreement with Lloyds Bank plc
in the aggregate principal amount of up to L14.0 million, including in (i),
(ii) and (iii) above, any related notes, collateral documents, instruments
and agreements executed in connection therewith, and in each case as amended,
increased, modified, extended, renewed, refunded, replaced or refinanced, in
whole or in part, from time to time.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of,
or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity, or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
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"OBLIGOR" on the indenture securities means the Company, each Guarantor
and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(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 words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to Sections or Articles means reference to such Section
or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto,
which Exhibit is part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not
contained in the form of Security attached as Exhibit A hereto shall be
delivered in writing to the Trustee. Each Security shall be dated the date
of its authentication.
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The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby. The Company's seal shall be impressed, affixed, printed
or reproduced on the Securities and may be in facsimile.
SECTION 2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Security for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for original issue in
the aggregate principal amount of up to $250,000,000 and shall authenticate
Exchange Securities for original issue in the aggregate principal amount of
up to $250,000,000, in each case upon a written order of the Company in the
form of an Officers' Certificate; PROVIDED that such Exchange Securities
shall be issuable only upon the valid surrender for cancellation of Initial
Securities of a like aggregate principal amount in accordance with the
Registration Rights Agreement. The Officers' Certificate shall specify the
amount of Securities to be authenticated and the date on which the Securities
are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $250,000,000, except as provided in
Section 2.7. Upon the written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of
the Company.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company, any Affiliate of the Company, or
any of their respective Subsidiaries.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiples thereof.
20
SECTION 3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), and an office or
agency where Securities may be presented for payment ("PAYING AGENT"), and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except
that, for the purposes of Articles III, VIII, XI, and Section 4.14 hereof and
as otherwise specified in this Indenture, neither the Company nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep
a register of the Securities and of their transfer and exchange. The Company
may have one or more co-Registrars and one or more additional Paying Agents.
The term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional Paying Agent. The Company hereby initially appoints
the Trustee as Registrar and Paying Agent, and by its acknowledgement and
acceptance on the signature page hereto, the Trustee hereby initially agrees
so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture,
which agreement shall implement the provisions of this Indenture that relate
to such Agent, and shall furnish a copy of each such agreement to the
Trustee. The Company shall promptly notify the Trustee in writing of the
name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC"),
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
6.1(viii) or (ix) hereof, the Trustee shall, or upon the occurrence of any
other Event of Default by notice to the Company, the Registrar and the Paying
Agent, the Trustee may assume the duties and obligations of the Registrar and
the Paying Agent hereunder.
SECTION 4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, or interest on, the Securities
(whether such assets have been distributed to it by the Company or any other
obligor on the Securities), and shall notify the Trustee in writing of any
Default in making any such payment. If either of the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate such assets and hold
them as a separate trust fund for the benefit of the Holders or the Trustee.
The Company at any time may require a Paying Agent to distribute all assets
held by it to the Trustee and
21
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default or any Event of Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by
the Company to the Paying Agent, the Paying Agent (if other than the Company)
shall have no further liability for such assets.
SECTION 5. SECURITYHOLDER 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 Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee or any Paying Agent is not the Registrar, the Company shall furnish
to the Trustee on or before the third Business Day preceding each Interest
Payment Date and at such other times as the Trustee or any such Paying Agent
may request in writing a list in such form and as of such date as the Trustee
or any such Paying Agent reasonably may require of the names and addresses of
Holders and the Company shall otherwise comply with TIA Section 312(a).
SECTION 6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
if its reasonable requirements for such transaction are met; PROVIDED,
HOWEVER, that the Definitive Securities surrendered for registration of
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and
the Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Transfer Restricted Securities that
are Definitive Securities, shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the
Security); or
22
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (within the meaning
of Rule 144A promulgated under the Securities Act), that is aware that
any sale of Securities to it will be made in reliance on Rule 144A
under the Securities Act and that is acquiring such Transfer
Restricted Security for its own account or for the account of another
such "qualified institutional buyer," a certification from such Holder
to that effect (in substantially the form set forth on the reverse of
the Security); or
(C) if such Transfer Restricted Security is being
transferred pursuant to an exemption from registration in accordance
with Rule 144, or outside the United States in an offshore transaction
in compliance with Rule 904 under the Securities Act, or pursuant to
an effective registration statement under the Securities Act, a
certification from such Holder to that effect (in substantially the
form set forth on the reverse of the Security); or
(D) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act and with all applicable securities
laws of the States of the United States, a certification from such
Holder to that effect (in substantially the form set forth on the
reverse of the Security) and an Opinion of Counsel reasonably
acceptable to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR
A BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not
be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the reverse
of the Security, that such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to make, or
to direct the Securities Custodian to make, an endorsement on the Global
Security to reflect an increase in the aggregate principal amount of the
Securities represented by the Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Global
23
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and the Trustee shall authenticate a new
Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and
the procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL
SECURITY FOR A DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in a Global Security, and upon receipt by the Trustee of a written
instruction or such other form of instructions as is customary for the
Depositary or the Person designated by the Depositary as having such a
beneficial interest in a Transfer Restricted Security only, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from the transferor that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (within the meaning of Rule 144A
promulgated under the Securities Act), that is aware that any sale of
Securities to it will be made in reliance on Rule 144A under the
Securities Act and that is acquiring such beneficial interest in the
Transfer Restricted Security for its own account or the account of
another such "qualified institutional buyer", a certification to that
effect from the transferor (in substantially the form set forth on the
reverse of the Security); or
(C) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule
144, or outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act, or pursuant to an
effective registration statement under the Securities Act, a
certification from the transferor to that effect (in substantially the
form set forth on the reverse of the Security); or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act and in accordance with all applicable securities
laws of the States of the United States, a
24
certification to that effect from the transferor (in substantially the
form set forth on the reverse of the Security) or an Opinion of Counsel
from the transferee or transferor reasonably acceptable to the Company
and to the Registrar to the effect that such transfer is in compliance
with the Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian,
the aggregate principal amount of the Global Security to be reduced and,
following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate, the Trustee's
authenticating agent will authenticate and deliver to the transferee a
Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the persons in whose names such
Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in subsection (f) of this Section 2.6), a
Global Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF
DEPOSITARY. If at any time:
(i) the Depositary for the Securities notifies the
Company that the Depositary is unwilling or unable to continue as Depositary
for the Global Securities and a successor Depositary for the Global
Securities is not appointed by the Company within ninety days after delivery
of such notice; or
(ii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive
Securities, will, or its authenticating agent will, authenticate and deliver
Definitive Securities, in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
25
(g) LEGENDS.
(i) Except as permitted by the following paragraph (ii),
each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following
form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT)(A "QIB"), OR (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS
NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF
THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE STATE SECURITIES LAWS OR (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S.
26
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Act or an effective registration
statement under the Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only to the
provisions of Section 2.6(c) hereof; PROVIDED, HOWEVER, that with
respect to any request for an exchange of a Transfer Restricted
Security that is represented by a Global Security for a Definitive
Security that does not bear a legend, which request is made in
reliance upon Rule 144, the Holder thereof shall certify in writing to
the Registrar that such request is being made pursuant to Rule 144
(such certification to be substantially in the form set forth on the
reverse of the Security).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY.
At such time as all beneficial interests in a Global Security have either
been exchanged for Definitive Securities, redeemed, repurchased or cancelled,
such Global Security shall be returned to or retained and cancelled by the
Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or cancelled, the principal amount of Securities represented by
such Global Security shall be reduced and an endorsement shall be made on
such Global Security, by the Trustee or the Securities Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES
OF DEFINITIVE SECURITIES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee or any authenticating agent of the
Trustee shall authenticate Definitive Securities and Global Securities at
the Registrar's request.
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(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes, assessments, or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.2 (fourth
paragraph), 2.10, 3.7, 2.14 (subparagraph 8), 9.5, or 11.1 hereof.
(iii) The Registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase pursuant to Article XI or
Section 4.14 hereof or redemption of Securities pursuant to Article III
hereof and ending at the close of business on the day of such mailing.
(iv) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depositary participants or beneficial owners
of interests in any Global Security) other than to require delivery of
such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements thereof.
SECTION 7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment
of both 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 Security is
replaced. In the case of any lost Security that will become due and payable
within 30 days, the Company can choose to pay such Security rather than
replacing such Security. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 8. OUTSTANDING SECURITIES.
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Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected
by the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security, except as provided in
Section 2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof (other
than a mutilated Security surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a BONA FIDE purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement
thereof pursuant to Section 2.7 hereof.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds cash sufficient
to pay all of the principal and interest and premium, if any, due on the
Securities payable on that date and payment of the Securities called for
redemption is not otherwise prohibited, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver
or consent, Securities owned by the Company or Affiliates of the Company
shall be disregarded, except that, for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, amendment,
supplement, waiver or consent, only Securities that a Trust Officer of the
Trustee knows are so owned shall be disregarded.
SECTION 10. TEMPORARY SECURITIES.
Until Definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but
may have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall, upon receipt of a written order
of the Company in the form of an Officers' Certificate, authenticate
Definitive Securities in exchange for temporary Securities. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as permanent Securities authenticated and
delivered hereunder.
29
SECTION 11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration, transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent (other than the Company or an Affiliate of the
Company), and no one else, shall cancel and, at the written direction of the
Company, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7 hereof, the Company may not
issue new Securities to replace Securities that have been paid or delivered
to the Trustee for cancellation. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as provided in this
Section 2.11 hereof, except as expressly permitted in the form of Securities
and as permitted by this Indenture.
SECTION 12. DEFAULTED INTEREST.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus any
interest payable on the defaulted interest at the rate and in the manner
provided in Section 4.1 hereof and the Security (herein called "DEFAULTED
INTEREST"), shall forthwith cease to be payable to the registered holder on
the relevant Record Date, or, as applicable, the Special Record Date (as
defined below), and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities (or
their respective predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee and the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit
with the Paying Agent an amount of cash equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Paying Agent for such deposit prior to
the date of the proposed payment, such cash when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted Interest
as provided in this clause (1). Thereupon the Paying Agent shall fix a
special record date for the payment of such Defaulted Interest (a
"SPECIAL RECORD DATE"), which shall be not more than 15 days, and not
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Paying Agent of the notice of the
proposed payment. The Paying Agent Trustee shall promptly notify the
Company and the Trustee of such Special Record Date and, in the name and
at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
30
therefor to be mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security register not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee and the Paying Agent of
the proposed payment pursuant to this clause, such manner shall be
deemed practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon the registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 13. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
SECTION 14. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that the Company shall commence an Asset Sale Offer
pursuant to Section 4.14 hereof, it shall follow the procedures specified
below.
No later than 10 days following the date on which the aggregate
amount of Excess Proceeds exceeds $25 million, the Company shall notify the
Trustee of such Asset Sale Offer and provide the Trustee with an Officers'
Certificate setting forth, in addition to the information to be included
therein pursuant to Section 4.14 hereof, the calculations used in determining
the amount of Net Proceeds to be applied to the purchase of Securities. The
Company shall commence or cause to be commenced such Asset Sale Offer on a
date no later than 20 days after such notice (the "COMMENCEMENT DATE").
31
The Asset Sale Offer shall remain open for at least 20 Business
Days after the Commencement Date relating to such Asset Sale Offer and shall
remain open for no more than such 20 Business Days, except to the extent
required by applicable law (as so extended, the "OFFER PERIOD"). No later
than three Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount (the "OFFER
AMOUNT") of Securities required to be purchased in such Asset Sale Offer
pursuant to Section 4.14 hereof or, if less than the Offer Amount has been
tendered, all Securities tendered in response to the Asset Sale Offer, in
each case for an amount in cash equal to the Asset Sale Payment (as defined
herein).
If the Purchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest
shall be paid to the Person in whose name a Security is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Securities pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company shall
send or shall cause to be sent by first class mail, a notice to each of the
Holders at their last registered address, with a copy to the Trustee and the
Paying Agent, offering to repurchase the Securities held by such Holder
pursuant to the procedure specified in such notice. Such notice, which shall
govern the terms of the Asset Sale Offer, shall contain all instructions and
materials necessary to enable the Holders to tender Securities pursuant to
the Asset Sale Offer and shall state:
(1) that the Asset Sale Offer is being made
pursuant to this Section 2.14 and Section 4.14
hereof and the length of time the Asset Sale
Offer shall remain open;
(2) the Offer Amount, the Asset Sale
Payment and the Purchase Date;
(3) that any Security not tendered or
accepted for payment shall continue to accrue
interest;
(4) that, unless the Company defaults in
the payment of the Purchase Price, any Security
accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the
Purchase Date;
(5) that Holders electing to have a
Security purchased pursuant to any Asset Sale
Offer shall be required to surrender the
Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the
Security completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at
the address specified in the notice prior to the
close of
32
business on the Business Day next preceding the
Purchase Date;
(6) that Holders shall be entitled to
withdraw their election if the Company,
depositary or Paying Agent, as the case may be,
receives, not later than the close of business on
the Business Day next preceding the termination
of the Offer Period, a facsimile transmission or
letter setting forth the name of the Holder, the
principal amount of the Security the Holder
delivered for purchase and a statement that such
Holder is withdrawing his election to have such
Security purchased;
(7) that, if the aggregate principal amount
of Securities surrendered by Holders exceeds the
Offer Amount, the Trustee shall select the
Securities to be purchased on a PRO RATA basis
(with such adjustments as may be deemed
appropriate by the Trustee so that only
Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased);
and
(8) that Holders whose Securities were
purchased only in part shall be issued new
Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
On the Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment, on a PRO RATA basis to the extent necessary, an aggregate
principal amount equal to the Offer Amount of Securities and other
Indebtedness ranking on a parity with the Securities whose provisions require
the Company to make an offer to purchase or redeem such Indebtedness with
proceeds from any asset sales tendered pursuant to the Asset Sale Offer, or
if less than the Offer Amount has been tendered, all Securities and other
Indebtedness or portions thereof so tendered, (ii) deposit with the Paying
Agent an amount equal to the Purchase Price in respect of all Securities and
other Indebtedness or portions thereof so tendered but which does not exceed
the Offer Amount and (iii) deliver or cause to be delivered to the Trustee
the Securities and other Indebtedness so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities and other
Indebtedness or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of Securities so tendered payment in
an amount equal to the Purchase Price for such Securities and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book
entry) a new Security to such Holder equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; PROVIDED that each
such new Security shall be in a principal amount of
33
$1,000 or an integral multiple thereof. The Company shall publicly announce
the results of the Asset Sale Offer on or as soon as practicable after the
Purchase Date.
The Company shall 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
purchase of Securities and other Indebtedness as a result of the Asset Sale
Offer. To the extent the provisions of any such rule conflict with the
provisions of this Indenture relating to an Asset Sale Offer, the Company
shall comply with the provisions of such rule and be deemed not to have
breached its obligations relating to the Asset Sale Offer by virtue thereof.
ARTICLE III
REDEMPTION
SECTION 1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by the provisions of this
Indenture, shall be made in accordance with such provisions and this Article
III. The Company will not have the right to redeem any Securities prior to
July 1, 2002. On or after July 1, 2002, the Company will have the right to
redeem all or any part of the Securities pursuant to paragraph 5 thereof, in
each case (subject to the right of Holders of record on a Record Date to
receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date, and subject to the provisions set forth in Section 3.5),
including accrued and unpaid interest and Liquidated Damages, if any, thereon
to the Redemption Date.
Except as provided in this paragraph and paragraph 5 of the
Securities, the Securities may not otherwise be redeemed at the option of the
Company.
SECTION 2. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 5
of the Securities, it shall notify the Trustee and the Paying Agent in
writing of the Redemption Date and the principal amount of Securities to be
redeemed and whether it wants the Paying Agent to give notice of redemption
to the Holders.
If the Company elects to reduce the principal amount of Securities
to be redeemed pursuant to Paragraph 5 of the Securities by crediting against
any such redemption Securities it has not previously delivered to the Trustee
and the Paying Agent for cancellation, it shall so notify the Trustee, in the
form of an Officers' Certificate, and the Paying Agent of the amount of the
reduction and deliver such Securities with such notice.
34
The Company shall give each notice to the Trustee and the Paying
Agent provided for in this Section 3.2 at least 40 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee and the
Paying Agent). Any such notice may be cancelled at any time prior to notice
of such redemption being mailed to any Holder and shall thereby be void and
of no effect.
SECTION 3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed
on a PRO RATA basis, by lot or by such other method as the Trustee shall
determine to be appropriate and fair and in such manner as complies with any
applicable Depositary, legal and stock exchange requirements.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly
notify the Company and the Paying Agent in writing of the Securities selected
for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities in
denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 4. NOTICE OF REDEMPTION.
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail a notice of redemption by first class mail,
postage prepaid, to the Trustee, the Paying Agent and each Holder whose
Securities are to be redeemed. At the Company's request, the Paying Agent
shall give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify the Securities
to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued
and unpaid interest and Liquidated Damages, if any, to be paid upon such
redemption;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Company defaults in its
obligation to deposit with the Paying Agent cash which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide the amount to fund the Redemption
Price in accordance with Section 3.6 hereof or (b) such redemption payment
is
35
prohibited, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders of such Securities is to receive payment of the Redemption Price,
including accrued and unpaid interest to the Redemption Date, upon
surrender to the Paying Agent of the Securities called for redemption
and to be redeemed;
(6) if any Security is being redeemed in part, the portion
of the principal amount, equal to $1,000 or any integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed;
and
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the optional redemption provisions of Paragraph 5 of
the Securities.
SECTION 5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4
hereof, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest to the Redemption Date. Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price, including interest, if any, accrued and unpaid to the Redemption Date;
PROVIDED that if the Redemption Date is after a regular Record Date and on or
prior to the Interest Payment Date, to which such Record Date relates, the
accrued interest shall be payable to the Holder of the redeemed Securities
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 6. DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date, the Company shall deposit with
the Paying Agent (other than the Company or an Affiliate of the Company) cash
sufficient to pay the Redemption Price of all Securities to be redeemed on
such Redemption Date (other than Securities or portions thereof called for
redemption on that date that have been delivered by the Company to the
Trustee for cancellation). The Paying Agent shall promptly return to the
Company any cash so deposited which is not required for that purpose upon the
written request of the Company.
36
If the Company complies with the preceding paragraph and payment of
the Securities called for redemption is not prohibited for any reason,
interest on the Securities to be redeemed will cease to accrue on the
applicable Redemption Date, whether or not such Securities are presented for
payment. Notwithstanding anything herein to the contrary, if any Security
surrendered for redemption in the manner provided in the Securities shall not
be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall continue to
accrue and be paid from the Redemption Date until such payment is made on the
unpaid principal, and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate and in the manner provided in
Section 4.1 hereof and the Security.
SECTION 7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
COVENANTS
SECTION 1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest (and Liquidated
Damages, if any) on the Securities on the dates and in the manner provided
herein and in the Securities. An installment of principal of or interest
(and Liquidated Damages, if any) on the Securities shall be considered paid
on the date it is due if the Trustee or Paying Agent (other than the Company
or an Affiliate of the Company) holds for the benefit of the Holders, (on or
before 10:00 a.m. New York City time to the extent necessary to provide the
funds to the Depository in accordance with the Depository's procedures) on
that date cash deposited and designated for and sufficient to pay the
installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate
specified in the Securities compounded semi-annually, to the extent lawful.
SECTION 2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this
Indenture may be served. The Company and the Guarantors shall give prompt
written notice to the Trustee and the Paying Agent of the location, and any
change in the location, of such office or agency. If at
37
any time the Company and the Guarantors shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee and the Paying
Agent with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in
Section 14.2 hereof.
The Company and the Guarantors may also from time to time designate
one or more other offices or agencies where the Securities may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company and the Guarantors of their
obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York, for such purposes. The Company and the Guarantors shall
give prompt written notice to the Trustee and the Paying Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company and the Guarantors hereby initially designates
the Corporate Trust Office of the Trustee as such office.
SECTION 3. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the Equity Interests of the Company or any of its
Subsidiaries (other than (x) dividends or distributions to the extent payable
in Qualified Equity Interests of the Company, (y) dividends or distributions
to the extent payable to the Company or any Subsidiary of the Company, and
(z) dividends or distributions by any Wholly Owned Subsidiary of the
Company); (ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company, or any of its Subsidiaries; (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Indebtedness, except at the original final
stated maturity date thereof; or (iv) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time
of and after giving effect to such Restricted Payment (the amount of any such
Restricted Payment, if other than cash or Cash Equivalents, shall be the fair
market value (as reasonably determined and evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee prior to the making of such Restricted Payment) of the asset(s)
proposed to be transferred by the Company or such Subsidiary, as the case may
be, pursuant to such Restricted Payment):
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the Reference
Period immediately preceding the date of such Restricted Payment, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.11; and
38
(c) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its
Subsidiaries after March 31, 1997 (excluding Restricted Payments
permitted by clauses (w), (x), (y) and (z) of the next succeeding
paragraph), is less than the sum (without duplication) of (i) 50%
of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing after March 31, 1997 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale (other than to a Subsidiary of the Company)
since March 31, 1997 of (A) Qualified Equity Interests of the Company
or (B) debt securities of the Company or any of its Subsidiaries that
were issued after March 31, 1997 and have been converted into or
exchanged for Qualified Equity Interests of the Company, plus (iii) to
the extent that any Restricted Investment that was made after the
Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return to the Company and its
Subsidiaries of capital with respect to such Restricted Investment
(net of taxes and the cost of disposition, if any) or (B) the initial
amount of such Restricted Investment.
The immediately preceding paragraph will not prohibit the following
Restricted Payments: (u) dividends or distributions paid by any Subsidiary of
the Company to stockholders of such Subsidiary other than the Company or
another Subsidiary of the Company, PROVIDED that such dividends and
distributions are paid (1) on a PRO RATA basis to each stockholder of such
Subsidiary or (2) in the case of payment by a Career Staff Company, in
accordance with the partnership agreement thereof; (v) the payment of any
dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have otherwise complied with the
provisions of this Indenture; (w) the payment of up to an aggregate of $8.0
million to the extent required in connection with tenders for the outstanding
6-1/2% Convertible Subordinated Debentures due 2003 pursuant to their terms
as in effect on the date of this Indenture; (x) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of the Company issued
after the date of this Indenture in exchange for, or out of the net cash
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
the Company) of Qualified Equity Interests of the Company, PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph; (y) the defeasance,
redemption or repurchase of Subordinated Indebtedness issued after the date
of this Indenture with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or in exchange for or out of the net cash proceeds
from the substantially concurrent sale (other than to a Subsidiary of the
Company) of Qualified Equity Interests of the Company, PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph; and (z) any purchase or
defeasance of Subordinated Indebtedness to the extent required upon a change
of control (as defined therein) by the indenture or other agreement or
instrument pursuant to which such Subordinated
39
Indebtedness was issued, but only if the Company has complied
with its obligations under the provisions of Section 11.1 hereof; PROVIDED
that in the case of each of clauses (u), (v), (w), (x), (y) and (z) of this
paragraph no Default or Event of Default shall have occurred or be continuing
at the time of such Restricted Payment or would occur as a consequence
thereof.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section 4.3 were computed.
SECTION 4. CORPORATE AND PARTNERSHIP EXISTENCE.
Subject to Article V, the Company and the Guarantors shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their respective corporate or partnership existence, as the case may
be, and the corporate or partnership existence, as the case may be, of each
of their Subsidiaries in accordance with the respective organizational
documents of each of them and the rights (charter and statutory) and
corporate franchises of the Company, the Guarantors and each of their
respective Subsidiaries; PROVIDED, HOWEVER, that neither the Company nor any
Guarantor shall be required to preserve, with respect to themselves, any
right or franchise, and with respect to any of their respective Subsidiaries,
any such existence, right or franchise, if (a) the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and (b) the loss thereof is not adverse in any
material respect to the Holders.
SECTION 5. PAYMENT OF TAXES AND OTHER CLAIMS.
Except with respect to immaterial items, the Company and the
Guarantors shall, and shall cause each of their Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied
or imposed upon the Company, any Guarantor or any of their Subsidiaries or
any of their respective properties and assets and (ii) all lawful claims,
whether for labor, materials, supplies, services or anything else, which have
become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Guarantor or any of their
Subsidiaries; PROVIDED, HOWEVER, that neither the Company nor any Guarantor
shall be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity
is being contested in good faith by appropriate proceedings and for which
disputed amounts adequate reserves have been established in accordance with
GAAP.
SECTION 6. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company and the Guarantors shall cause all material properties,
in the good faith opinion of the Company, used or useful to the conduct of
their business and the business of each of their Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment and shall
cause to be made all
40
necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in their reasonable judgment may be
necessary, so that the business carried on in connection therewith may be
properly conducted at all times; PROVIDED, HOWEVER, that nothing in this
Section 4.6 shall prevent the Company or any Guarantor from discontinuing any
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is (a), in the judgment of the Board
of Directors of the Company, desirable in the conduct of the business of the
Company and (b) not adverse in any material respect to the Holders.
The Company and the Guarantors shall provide, or cause to be
provided, for themselves and each of their Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Company is adequate and appropriate for
the conduct of the business of the Company, the Guarantors and such
Subsidiaries in a prudent manner, with (except for self-insurance) 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, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of
the Company, the Guarantors and such Subsidiaries in a prudent manner for
entities similarly situated in the industry, unless the Company determines
that failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition
or results of operations of the Company, such Guarantors or such Subsidiary.
SECTION 7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee
within 120 days after the end of its fiscal year an Officers' Certificate,
one of the signers of which shall be the principal executive, principal
financial or principal accounting officer of the Company, complying with
Section 314(a)(4) of the TIA and stating that a review of its activities and
the activities of its Subsidiaries, if any, during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled
its obligations under this Indenture (without regard to notice requirements
or grace periods) and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company,
any Guarantor or any Subsidiary of the Company to comply with any conditions
or covenants in this Indenture and, if such signer does know of such a
failure to comply, the certificate shall describe such failure with
particularity. The Officers' Certificate shall also notify the Trustee
should the relevant fiscal year end on any date other than the current fiscal
year end date.
(b) The Company shall, so long as any of the
Securities are outstanding, deliver to the Trustee, promptly upon becoming
aware of any Default or Event of Default, an Officers' Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto. The Trustee shall not be deemed to
have knowledge of any Default, any Event of Default or any such fact unless
one of its Trust Officers receives written notice thereof from the Company or
any of the Holders.
41
SECTION 8. REPORTS.
Whether or not the Company is required by the rules and regulations
of the Commission, so long as any Securities are outstanding, the Company
will furnish to the Trustee and all Holders, within 15 days after it is or
would have been required to file such with the Commission, all quarterly and
annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants. In addition, whether or not required by the rules
and regulations of the Commission but only to the extent permitted thereby,
the Company will file a copy of all such information and reports with the
Commission for public availability and make such information available to
securities analysts and prospective investors upon request. Notwithstanding
anything contrary herein the Trustee shall have no duty to review such
documents for purposes of determining compliance with any provisions of this
Indenture.
SECTION 9. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company and the Guarantors shall not and shall not permit any
of their Subsidiaries to become an "investment company" (as that term is
defined in the Investment Company Act of 1940, as amended), or otherwise
become subject to regulation under the Investment Company Act.
SECTION 10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), or any series of related Affiliate Transactions, unless (i)
such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that could have been obtained
in a comparable transaction by the Company or such Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with
respect to an Affiliate Transaction, or any series of related Affiliate
Transactions, involving aggregate consideration in excess of $2.5 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to an
Affiliate Transaction, or any series of related Affiliate Transactions,
involving aggregate consideration in excess of $5 million, an opinion as to
the fairness to the Company or such Subsidiary of such Affiliate Transaction
from a financial point of view issued by an investment banking firm of
national standing; PROVIDED that the following shall not be deemed to be
Affiliate Transactions: (w) transactions or payments pursuant to any
employment arrangements, director or officer indemnification agreements or
employee or director benefit plans entered into by the Company or any of its
Subsidiaries in the ordinary course of business of the Company or such
Subsidiary, (x) transactions between or among
42
the Company and/or any of its Subsidiaries, (y) any transaction or series of
related transactions pursuant to terms entered into prior to the date of this
Indenture and (z) Restricted Payments by the Company which are permitted by
Section 4.3 and are made on a PRO RATA basis to each stockholder of the
Company.
SECTION 11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (individually and collectively, "INCUR") after the date of
this Indenture any Indebtedness (including Acquired Debt), and the Company
will not permit any of its Subsidiaries to issue any shares of Preferred
Stock; PROVIDED that the Company and its Subsidiaries may incur Indebtedness
(including Acquired Debt) if (a) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving effect
on a pro forma basis to, such incurrence of Indebtedness and (b) the Fixed
Charge Coverage Ratio for the Reference Period immediately preceding the date
on which such additional Indebtedness is incurred would have been at least
2.0 to 1 for incurrences on or prior to June 30, 1998, 2.25 to 1 for
incurrences after June 30, 1998 and on or prior to June 30, 1999 and 2.5 to 1
thereafter, in each case determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred at the beginning of such Reference Period.
Indebtedness consisting of reimbursement obligations in respect of a letter
of credit will be deemed to be incurred when the letter of credit is first
issued.
The foregoing paragraph will not prevent:
(i) the incurrence by the Company or any of its Subsidiaries (other
than the Foreign Companies) of Senior Revolving Debt pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount equal to the
maximum potential reimbursement obligation of the Company or any such
Subsidiary with respect thereto) not to exceed an amount equal to $550
million, less the aggregate amount of all Net Proceeds of Asset Sales
applied to permanently reduce the commitments with respect to such
Indebtedness pursuant to Section 4.14 hereof after the Issue Date;
(ii) the incurrence by the Foreign Companies of Senior Revolving Debt
pursuant to the U.K. Credit Agreements in an aggregate principal amount at
any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential reimbursement obligation of
the Foreign Companies with respect thereto) not to exceed an amount equal
to L75 million (or the equivalent amount thereof, at the time of
incurrence, in other foreign currencies), less the aggregate amount of all
Net Proceeds of Assets Sales applied to permanently reduce the commitments
with respect to such Indebtedness pursuant to Section 4.14 hereof after the
Issue Date;
43
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Securities;
(iv) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted by this Indenture to be incurred
(including, without limitation, Existing Indebtedness);
(v) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and/or any
Subsidiaries; PROVIDED that in the case of such Indebtedness of the Company
or the Guarantors, such obligations shall be unsecured and subordinated in
all respects to the Company's and the Guarantors' obligations pursuant to
the Securities and the Guarantees;
(vi) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by this Indenture to be outstanding or any
receivable or liability the payment of which is determined by reference to
a foreign currency; PROVIDED that the notional principal amount of any such
Hedging Obligation does not exceed the principal amount of the Indebtedness
or the amount of such receivable or liability to which such Hedging
Obligation relates;
(vii) the incurrence by the Company or any of its Subsidiaries of
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 or such Subsidiary in accordance with customary industry practices,
in amounts and for the purposes customary in the Company's industry; and
(viii) the incurrence by the Company or any of the Guarantors or
the Foreign Companies of Indebtedness (in addition to Indebtedness
permitted by any other clause of this paragraph) in an aggregate principal
amount at any time outstanding (including any Indebtedness issued to
refinance, replace or refund such Indebtedness) not to exceed $50 million
(or the equivalent amount thereof, at the time of incurrence, in other
foreign currencies).
For purposes of determining any particular amount of Indebtedness
under this covenant and so as to avoid duplication, guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not
be included. For purposes of determining compliance with this covenant, (i)
in the event that an item of Indebtedness meets the criteria of more than one
of the types of Indebtedness permitted by the second paragraph of this
covenant, the Company, such Guarantor or such Subsidiary shall classify such
item of Indebtedness and only be required to include the amount and type of
such Indebtedness in one of the categories of permitted Indebtedness
described above and (ii) the
44
outstanding principal amount on any date of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness on such date.
SECTION 12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall 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 on the ability of
any Subsidiary to (i)(a) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to or on behalf of the Company or
any of its Subsidiaries or (iii) transfer any of its properties or assets to
or on behalf of the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) this Indenture,
(c) applicable law, (d) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent incurred in
connection with or in contemplation of such acquisition or in violation of
Section 4.11, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired, (e) customary
non-assignment provisions in leases entered into in the ordinary course of
business, (f) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described
in clause (iii) above solely on the property so acquired, (g) Permitted
Refinancing Indebtedness, PROVIDED that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in and do not apply to any other assets or
person than was covered by the agreements governing the Indebtedness being
refinanced, or (h) the Credit Agreement, the U.K. Credit Agreements and
future Foreign Company credit agreements, including related documentation as
the same is in effect on the date of this Indenture and as amended or
replaced from time to time, PROVIDED that no such future Foreign Company
credit agreement and no such amendment or replacement is more restrictive as
to the matters enumerated above than the Credit Agreement, the U.K. Credit
Agreements (in the case of amendments or replacements thereof) and related
documentation as in effect on the date of this Indenture. Nothing contained
in this Section 4.12 shall prevent the Company or any Subsidiary of the
Company from creating, incurring, assuming or suffering to exist any
Permitted Liens or entering into agreements in connection therewith that
impose restrictions on the transfer or disposition of the property or assets
subject to such Permitted Liens.
SECTION 13. LIMITATIONS ON LAYERING INDEBTEDNESS; REDEEMABLE STOCK;
LIENS SECURING INDEBTEDNESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist (a) any
(i) Redeemable Stock, or (ii) Indebtedness that
45
is subordinate in right of payment to any other Indebtedness of the Company
or a Guarantor (other than Existing Indebtedness and Indebtedness incurred in
compliance with clause (v) of Section 4.11) unless, by its terms, such
Redeemable Stock or Indebtedness (A) has an original final stated maturity
subsequent to the Maturity Date and a Weighted Average Life to Maturity
longer than that of the Securities and (B) is subordinate in right of payment
to, or ranks PARI PASSU with, the Securities or the Guarantee, as applicable,
or (b) any Lien (except Permitted Liens) on any asset now owned or hereafter
acquired, or on any income or profits therefrom or assign or convey any right
to receive income therefrom securing any Indebtedness of the Company or any
of its Subsidiaries unless all payments due under this Indenture, the
Securities and the Guarantees (as applicable) are secured on an equal and
ratable basis with the Obligations so secured (or, if the Obligations so
secured constitute Subordinated Indebtedness, on a senior basis) until such
time as such Obligations are no longer secured by a Lien.
SECTION 14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, in one or a series of related transactions, consummate an Asset Sale
unless (i) the Company (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value (as reasonably determined and evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 80% of the consideration therefor received by
the Company or such Subsidiary is in the form of cash or Cash Equivalents,
PROVIDED that for purposes of this provision, (x) the amount of (A) any
liabilities (as shown on the most recent balance sheet of the Company or such
Subsidiary or in the notes thereto) of the Company or such Subsidiary that
are assumed by the transferee of any such assets (other than liabilities that
are by their terms PARI PASSU with or subordinated to the Securities or the
guarantee of the Guarantors, as applicable) and (B) any securities or other
obligations received by the Company or any such Subsidiary from such
transferee that are immediately converted by the Company or such Subsidiary
into cash or Cash Equivalents (or as to which the Company or such Subsidiary
has received at or prior to the consummation of the Asset Sale a commitment
(which may be subject to customary conditions) from a nationally recognized
investment, merchant or commercial bank to convert into cash or Cash
Equivalents within 90 days of the consummation of such Asset Sale and which
are thereafter actually converted into cash or Cash Equivalents within such
90-day period) will be deemed to be cash or Cash Equivalents (and shall be
deemed to be Net Proceeds for purposes of the following provisions as and
when reduced to cash or Cash Equivalents) to the extent of the net cash or
Cash Equivalents realized thereon and (y) the fair market value of any
Non-Cash Consideration received by the Company or a Subsidiary in any
Non-Qualified Asset Sale shall be deemed to be cash to the extent that the
aggregate fair market value (as reasonably determined and evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of all Non-Cash Consideration (measured at the time
received and without giving effect to any subsequent changes in value)
received by the Company or any of its Subsidiaries since the date of this
Indenture in all Non-Qualified Asset Sales does not exceed 5% of
Stockholders' Equity as of the date of such consummation. Notwithstanding the
foregoing, to the extent the Company or any of its Subsidiaries receives
Non-Cash Consideration
46
as proceeds of an Asset Sale, such Non-Cash Consideration shall be deemed to
be Net Proceeds for purposes of (and shall be applied in accordance with) the
following provisions when the Company or such Subsidiary receives cash or
Cash Equivalents from a sale, repayment, exchange, redemption or retirement
of or extraordinary dividend or return of capital on such Non-Cash
Consideration.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Subsidiary may apply such Net Proceeds (i) to
purchase one or more Nursing Facilities or Related Businesses and/or a
controlling interest in the Capital Stock of a Person owning one or more
Nursing Facilities and/or one or more Related Businesses (and no other
material assets), (ii) to make a capital expenditure or to acquire other
tangible assets, in each case, that are used or useful in any business in
which the Company is permitted to be engaged pursuant to Section 4.17 hereof
or (iii) to permanently reduce Senior Debt (including, in the case of Senior
Revolving Debt, to correspondingly reduce commitments with respect thereto).
Pending the final application of any such Net Proceeds, the Company or such
Subsidiary may temporarily reduce Senior Revolving Debt. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $25 million, the Company
shall make an offer to all Holders and holders of any other Indebtedness of
the Company ranking senior to or on a parity with the Securities from time to
time outstanding with similar provisions requiring the Company to make an
offer to purchase or to redeem such Indebtedness with the proceeds from any
Asset Sales, pro rata in proportion to the respective principal amounts of
Securities and such other Indebtedness then outstanding (collectively, an
"ASSET SALE OFFER") to purchase the maximum principal amount of the
Securities and such other Indebtedness that may be purchased out of the
Excess Proceeds, at an offer price in cash equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon and Liquidated
Damages, if any, to the date of purchase (the "ASSET SALE PAYMENT"), in
accordance with the procedures set forth in Section 2.14. To the extent that
the aggregate amount of Securities and such other Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes not
prohibited at the time under this Indenture. If the aggregate principal
amount of Securities and such other Indebtedness surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Securities and such other
Indebtedness will be purchased on a pro rata basis. Upon completion of an
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
SECTION 15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead,
or in any manner whatsoever claim 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 any Guarantor from paying all or any portion of the
principal of, premium of, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the
47
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.
SECTION 16. RULE 144A INFORMATION REQUIREMENT.
The Company shall furnish to the Holders of the Securities,
securities analysts, and prospective purchasers of Securities designated by
the Holders of Transfer Restricted Securities, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act until such time as either the Company has concluded an offer
to exchange the Exchange Securities for the Initial Securities or a
registration statement relating to resales of the Securities has become
effective under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of such
resale registration statement.
SECTION 17. LIMITATIONS ON LINES OF BUSINESS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage to any material extent in any business other than the ownership,
operation and management of Nursing Facilities and Related Businesses.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or, directly or indirectly,
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person or group of affiliated Persons or adopt a
Plan of Liquidation unless (i) the Company is the surviving corporation or
the entity or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made or (in
the case of a Plan of Liquidation) the Person which receives the greatest
value from the Plan of Liquidation is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person
to which such sale, assignment, transfer, conveyance or other disposition
shall have been made or (in the case of a Plan of Liquidation) the Person
which receives the greatest value from the Plan of Liquidation assumes all
the obligations of the Company under the Securities and this Indenture
pursuant to a supplemental Indenture in form reasonably satisfactory to the
Trustee; (iii) immediately after giving effect to such transaction on a pro
forma basis, no Default or Event of Default exists; and (iv) the Company or
the entity or Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made or (in the case
of a Plan of Liquidation)
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the Person which receives the greatest value from the Plan of Liquidation (A)
will have Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at
the beginning of the Reference Period, be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of Section 4.11.
Upon any consolidation or merger or any such sale, assignment,
transfer, conveyance or other disposition (but not lease) or consummation of
a Plan of Liquidation in accordance with the foregoing, the successor
corporation formed by such consolidation or into which the Company is merged
or to which such transfer is made or, in the case or a Plan of Liquidation,
the entity which receives the greatest value from such Plan of Liquidation
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named therein as the Company, and the Company
shall be released from the obligations under the Securities and this
Indenture except with respect to any obligations that arise from, or are
related to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets
of one or more Subsidiaries, the Company's interest in which constitutes all
or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
49
SECTION 2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company 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 under
this Indenture with the same effect as if such successor corporation had been
named herein as the Company, and when a successor corporation duly assumes all
of the obligations of the Company pursuant hereto and pursuant to the
Securities, the Company shall be released from such obligations (except with
respect to any obligations that arise from, or are related to, such
transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 1. EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure by the Company to pay any installment of interest
upon the Securities as and when the same becomes due and payable,
and the continuance of any such failure for a period of 30 days
(whether or not such payment is prohibited by Article XII or
otherwise);
(ii) failure by the Company to pay all or any part of the
principal of or premium, if any, on the Securities when and as the
same becomes due and payable at maturity, upon redemption, by
acceleration, or otherwise, including, without limitation, default
in the payment of the Change of Control Payment in accordance with
Article XI or the Asset Sale Payment in accordance with Section
4.14 or otherwise;
(iii) failure by the Company or any Guarantor for 30 days after
written notice to comply with the provisions of Section 4.3 or 4.11
hereof;
(iv) failure by the Company or any Guarantor to observe or
perform any other covenant or agreement contained in the Securities
or this Indenture (other than as specifically dealt with in
paragraph (i), (ii) or (iii) of this Section 6.1) and the
continuance of such failure for a period of 60 days after written
notice is given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate
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principal amount of the Securities outstanding, specifying such
default or breach, requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder;
(v) any default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries), whether such
Indebtedness or guarantee exists on the date of this Indenture or
is thereafter created, which default (a) constitutes a Payment
Default or (b) results in the acceleration of such Indebtedness
prior to its final stated maturity and, in each case, the principal
amount of any Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment
Default or that has been so accelerated, aggregates in excess of
$20 million;
(vi) final unsatisfied judgments not covered by insurance for
the payment of money, or the issuance of any warrant of attachment
against any portion of the property or assets of the Company or any
of its Subsidiaries, aggregating in excess of $20 million, at any
one time shall be rendered against the Company or any of its
Subsidiaries and not be stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60 days
(or, in the case of any such final judgment which provides for
payment over time, which shall so remain unstayed, unbonded or
undischarged beyond any applicable payment date provided therein);
(vii) any Guarantee by a Guarantor which is a Significant
Subsidiary shall cease for any reason not permitted by this
Indenture to be in full force and effect, or any such Guarantor, or
any person acting on behalf of any such Guarantor, shall deny or
disaffirm its obligations under its Guarantee;
(viii) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or
any of its Significant Subsidiaries as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of
the Company or any of its Significant Subsidiaries under any
bankruptcy or similar law, and such decree or order shall have
continued undischarged and unstayed for a period of 60 days,
PROVIDED, HOWEVER, that if the entry of such order or decree is
appealed and dismissed on appeal then the Event of Default
hereunder by reason of the entry of such judgment or decree shall
be deemed to have been cured; or a decree, judgment or order of a
court of competent jurisdiction appointing a receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency for the Company,
any of its Significant Subsidiaries, or any substantial part of the
property of any such Person, or for the winding up or liquidation
of the affairs of any such Person, shall have been entered, and
such decree, judgment, or order shall have remained in force
undischarged and unstayed for a period of 60 days; PROVIDED,
HOWEVER, that if the entry of such order or decree is appealed and
dismissed on appeal then the Event of Default hereunder by reason
of the entry of such judgment or decree shall be deemed to have
been cured; or
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(ix) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking
reorganization under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or
shall consent to the appointment of a Custodian, receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of it
or any substantial part of its assets or property, or shall make a
general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become
due, fail generally to pay its debts as they become due, or take
any corporate action in furtherance of any of the foregoing.
If a Default occurs and is continuing, the Trustee must, within 90
days after the occurrence of such default, give to the Holders notice of such
default.
SECTION 2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 6.1(viii) or (ix) above relating to the Company or any of its
Significant Subsidiaries) occurs and is continuing, then, and in every such
case, unless the principal of all of the Securities shall have already become
due and payable, either the Trustee or the Holders of at least 25% in
aggregate principal amount of then outstanding Securities, by a notice in
writing to the Company (and to the Trustee if given by Holders) (an
"ACCELERATION NOTICE"), may declare all of the principal of the Securities,
determined as set forth below, including in each case accrued interest
thereon, to be due and payable immediately; PROVIDED that so long as at least
$15 million of Senior Debt is outstanding under the Credit Agreement, no
acceleration of the maturity of the Securities shall be effective until the
earlier of (i) five days after notice of acceleration is received by the
Representative under the Credit Agreement (unless such Event of Default is
cured or waived prior thereto) and (ii) the date on which any Senior Debt
under the Credit Agreement is accelerated. In the event a declaration of
acceleration resulting from an Event of Default described in Section 6.1(v)
above has occurred and is continuing, such declaration of acceleration shall
be automatically annulled if such default is cured or waived or the holders
of the Indebtedness which is the subject of such default have rescinded their
declaration of acceleration in respect of such Indebtedness within sixty days
thereof and the Trustee has received written notice of such cure, waiver or
rescission and no other Event of Default described in Section 6.1(v) above
has occurred that has not been cured or waived, or as to which the
declaration has not been rescinded, within sixty days of the declaration of
such acceleration in respect of such Indebtedness. If an Event of Default
specified in Section 6.1(viii) or (ix) above relating to the Company or any
Significant Subsidiary occurs, all principal and accrued interest thereon
will be immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not
less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Company and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:
52
(1) the Company has paid or deposited with the Trustee cash
sufficient to pay:
(A) all overdue interest and Liquidated Damages, if
any, on all Securities,
(B) the principal of (and premium, if any, applicable
to) any Securities which would become due other than by
reason of such declaration of acceleration, and interest
thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne
by the Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel, and all
other amounts due the Trustee under Section 7.7 and
(2) all Events of Default, other than the non-payment of
the principal of, premium, if any, and interest on Securities
which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
6.12 hereof.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with
notice or lapse of time or both would be an Event of Default with respect to
(i) any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby, unless
all such affected Holders agree, in writing, to waive such Event of Default
or other event and (ii) any provision requiring supermajority approval to
amend, unless such default has been waived by such a supermajority. No such
waiver shall cure or waive any subsequent default or impair any right
consequent thereon.
SECTION 3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for principal, premium
(if any), and interest, and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium,
if any), and on any overdue interest, at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including compensation to, and
expenses, disbursements and advances of the Trustee and its agents and
counsel and all other amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial
53
proceeding for the collection of the sums so due and unpaid, may prosecute
such proceeding to judgment or final decree and may enforce the same against
the Company or any other obligor upon the Securities and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal, premium,
if any (and Liquidated Damages, if any), or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agent and counsel and all other amounts due the Trustee
under Section 7.7) and of the Holders allowed in such judicial proceeding,
and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder 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 Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under 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 Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
54
SECTION 5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest on, the Securities in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium (if any), and interest,
respectively; and
THIRD: To the Company, the Guarantors or such other Person as may be
lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
55
(B) the Holders of not less than 25% in aggregate principal
amount of then outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) 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 outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), and interest on, such
Security on the Maturity Dates of such payments as expressed in such Security
(in the case of redemption, the Redemption Price on the applicable Redemption
Date, in the case of the Change of Control Payment, on the applicable Change of
Control Payment Date, and in the case of the Asset Sale Payment, on the Purchase
Date) and to institute suit for the enforcement of any such payment after such
respective dates, and such rights shall not be impaired without the consent of
such Holder.
SECTION 9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
56
SECTION 10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default
shall impair the exercise of any such right or remedy or constitute a waiver
of any such Event of Default. Every right and remedy given by this Article
VI 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.
SECTION 11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount
of then outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee,
PROVIDED, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 12. WAIVER OF EXISTING OR PAST DEFAULT.
Subject to Section 6.8 and 9.2 hereof, the Holder or Holders of not
less than a majority in aggregate principal amount of the outstanding Securities
may, on behalf of all Holders, waive any existing or past Default or Event of
Default hereunder and its consequences under this Indenture, except a default
(A) in the payment of the principal of, premium, if any, or
interest on, any Security as specified in clauses (i) and (ii) of Section
6.1 hereof and not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
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 impair the exercise of any right arising therefrom.
57
SECTION 13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to
be taken by it as Trustee, any court may in its discretion require the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 6.13
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount of the
outstanding Securities, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any), or interest
on, any Security on or after the respective Maturity Date expressed in such
Security (including, in the case of redemption, on or after the Redemption
Date).
SECTION 14. 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 adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, 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.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 1. DUTIES OF TRUSTEE.
(a) If a Default or 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 use the same degree of care and skill in their
exercise as a prudent Person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
58
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee, and
(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. However, 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 examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(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,
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts,
and
(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 Section 6.11 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 duties hereunder or to take or
omit to take any action under this Indenture or at the request, order or
direction of the Holders or in the exercise of any of its rights or
powers if it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c), (d) and
(f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on
any assets received by it except as the Trustee may agree in writing with
the Company (including without limitation to the extent the Trustee
receives funds prior to the interest payment date in order to comply with
the provisions of Section 4.1). Assets held in trust by the Trustee need
not be segregated from other assets except to the extent required by law.
SECTION 2. RIGHTS OF TRUSTEE.
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Subject to Section 7.1 hereof:
(a) The Trustee may rely on any document 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
such document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 14.4 and 14.5
hereof. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or advice of
counsel.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of
any agent appointed with due care.
(d) The Trustee shall not be liable for any action it
or its agent takes or omits to take in good faith which it believes to
be authorized or within its rights or powers conferred upon it by this
Indenture.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at
the request, order or direction of any of the Holders, pursuant to the
provisions of this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby.
(g) Unless otherwise specifically provided for in
this Indenture, any demand, request, direction or notice from the
Company or any Guarantor shall be sufficient if signed by an Officer of
the Company or such Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to
the performance of the Company's or any Guarantor's covenants in Article
IV hereof or as to the performance by any Agent of its duties hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(i), 6.1(ii) and 4.1 hereof, or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any
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action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate.
SECTION 3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and
7.11 hereof.
SECTION 4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds
received by a Paying Agent other than the Trustee.
SECTION 5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the uncured Default or Event of Default within 90 days after such
Default or Event of Default occurs. Except in the case of a Default or an
Event of Default in payment of principal (or premium, if any), of, or
interest on, any Security (including the payment of the Change of Control
Purchase Price on the Change of Control Payment Date, the payment of the
Redemption Price on the Redemption Date and the payment of the Offer Price on
the Purchase Date), the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interest of the Securityholders.
SECTION 6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall, if required by law, mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock
exchange, if any, on which the Securities are listed.
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SECTION 7. COMPENSATION AND INDEMNITY.
The Company and the Guarantors jointly and severally agree to pay
to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company and the Guarantors shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it in accordance with this Indenture. Such
expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against,
any claim, demand, expense (including but not limited to reasonable
compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by it without negligence or bad faith on
the part of the Trustee, arising out of or in connection with the
administration of this trust and its rights or duties hereunder, including
the reasonable 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. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. The
Company and the Guarantors shall defend the claim and the Trustee shall
provide reasonable cooperation at the Company's and the Guarantors' expense
in the defense. The Trustee may have separate counsel and the Company and
the Guarantors shall pay the reasonable fees and expenses of such counsel;
PROVIDED, that the Company and the Guarantors will not be required to pay
such fees and expenses if they assume the Trustee's defense and there is no
conflict of interest between the Company and the Guarantors and the Trustee
in connection with such defense. The Company and the Guarantors need not pay
for any settlement made without their written consent. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on
all assets held or collected by the Trustee, in its capacity as Trustee,
except assets held in trust to pay principal and premium, if any, of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(viii) or (ix) of this Indenture occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section
7.7 and any lien arising hereunder shall survive the resignation or removal
of the Trustee, the discharge of the Company's and the Guarantors'
obligations pursuant to Article VIII of this Indenture and any rejection or
termination of this Indenture under any Bankruptcy Law.
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SECTION 8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor trustee with the Company's
consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee 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. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 hereof have been paid, the retiring Trustee shall transfer all property held
by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7 hereof, 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 Holder.
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
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
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SECTION 9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1), (2) and (5). The Trustee shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 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.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1. DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Securities that have
been replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company
may elect to have Section 8.2, at the Company's option and at any time within
one year of the Maturity Date of the Securities, or Section 8.3, at the
Company's option at any time, of this Indenture applied to all outstanding
Securities upon compliance with the conditions set forth below in this
Article VIII.
SECTION 2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall be
deemed to have been discharged from their respective obligations with respect
to all outstanding Securities on the date the conditions set forth 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
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and this Indenture shall cease to be of further effect as to all outstanding
Securities and Guarantees, except as to be deemed to be "outstanding" only
for the purposes of Section 8.5 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and the Company and the
Guarantors shall be deemed to have satisfied all other of their respective
obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall 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 Securities to receive payments in respect of the principal of,
premium, if any, and interest on such Securities when such payments are due
from the trust described in Section 8.5, (b) the Company's obligations with
respect to such Securities under Sections 2.3, 2.4, 2.6, 2.7, 2.10, 5.2, 8.5,
8.6 and 8.7 hereof and (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith. Subject to compliance with this Article VIII, the
Company may exercise its option under this Section 8.2 notwithstanding the
prior exercise of its option under Section 8.3 hereof with respect to the
Securities.
SECTION 3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall be
released from their respective obligations under the covenants contained in
Sections 4.3, 4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and
4.17, Article V and Article XI hereof with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "COVENANT DEFEASANCE"), and the Securities shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, neither the Company
nor any Guarantor need comply with and shall have any liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document (and Section 6.1(iii) hereof shall
not apply to any such covenant), but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
In addition, upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, Sections 6.1(v) and 6.1(vi) hereof
shall not constitute Events of Default with respect to the Securities.
SECTION 4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
(a)(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 VIII applicable to it), in trust, for the benefit
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of the Holders of the Securities, cash, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such outstanding Securities on
their Maturity Date; (ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of such outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a
result of such Legal 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 Legal Defeasance had not occurred; (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States confirming that the Holders of such
outstanding Securities 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; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit)
or insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound (other than a breach, violation or default resulting
from the borrowing of funds to be applied to such deposit); (vi) the Company
must have delivered to the Trustee an opinion of counsel to the effect that
after the 91st day following the deposit, the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally; (vii) the Company must
deliver to the Trustee an Officers' Certificate stating that the deposit was
not made by the Company with the intent of preferring the Holders of such
Securities over the other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding other creditors of the Company;
and (viii) the Company must deliver to the Trustee an Officers' Certificate
and an opinion of counsel, each stating that the conditions precedent
provided for in, in the case of the Officers' Certificate, (i) through (vi)
and, in the case of the opinion of counsel, clauses (i), (with respect to the
validity and perfection of the security interest) (ii), (iii) and (v) of this
paragraph, have been complied with.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of premium, if any,
and interest on the Securities when due, then the obligations of the Company
and the Guarantors under this Indenture, the Securities and the Guarantees
will be revived and no such defeasance will be deemed to have occurred.
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SECTION 5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"PAYING AGENT") pursuant to Section 8.4 hereof in respect of the outstanding
Securities shall be held in trust and applied by the Paying Agent, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any other Paying Agent as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal, premium, if any, and interest, but such
money need not be segregated from other funds except to the extent required
by law.
The Company 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 8.4 or the principal 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 Outstanding Securities.
SECTION 6. REPAYMENT TO THE COMPANY.
(a) Anything in this Article VIII to the contrary notwithstanding,
the Trustee or the Paying Agent shall deliver or pay to the Company from time
to time upon the request of the Company any cash or U.S. Government
Obligations held by it as provided in Section 8.4 hereof which in the opinion
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.4(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall
be paid to the Company on its request; and the Holder of such Security shall
thereafter look only to the Company for 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 such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the NEW YORK TIMES and THE WALL STREET
JOURNAL (national edition), 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 notification or publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 7. REINSTATEMENT.
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If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the
case may be, of this Indenture by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's and the Guarantors'
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3
hereof until such time as the Trustee or Paying Agent is permitted to apply
such money in accordance with Sections 8.2 and 8.3 hereof, as the case may
be; PROVIDED, HOWEVER, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Security following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the cash or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this clause (1) shall not
adversely affect the interests of any Holder in any respect;
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(3) to add to the covenants of the Company or the Guarantors for
the benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or the Guarantors;
(4) to provide for collateral for or additional Guarantors of the
Securities;
(5) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Securities in accordance with Article V;
(6) to comply with the TIA;
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(7) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guarantee of such
Guarantor (as set forth in Section 12.4) in accordance with Article XII;
(8) to evidence the release of any Guarantor in accordance with
Article XII;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
(10) in any other case where a supplemental indenture is required or
permitted to be entered into pursuant to the provisions of this Indenture
without the consent of any Holder; or
(11) to provide for the issuance and authorization of the Exchange
Securities.
SECTION 2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT
OF HOLDERS.
Subject to Section 6.8 hereof, with the consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for such Securities), by written act of said Holders delivered to the
Company and the Trustee, the Company or any Guarantor, when authorized by
Board Resolutions, and the Trustee may amend or supplement this Indenture or
the Securities or enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or the Securities or of
modifying in any manner the rights of the Holders under this Indenture or the
Securities. Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of then outstanding Securities may
waive compliance by the Company or any Guarantor with any provision of this
Indenture or the Securities. Notwithstanding any of the above, however, no
such amendment, supplemental indenture or waiver shall, without the consent
of the Holder of each outstanding Security affected thereby:
(1) change the Maturity Date on any Security, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest
thereon or any premium payable upon the redemption thereof, or change the
place of payment where, or the coin or currency in which, any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity Date
thereof (or in the case of redemption, on or after the Redemption Date), or
reduce the Change of Control Purchase Price or the Asset Sale Offer Price or
alter the provisions (including the defined terms used herein) regarding the
right of the Company to redeem the Securities in a manner adverse the
Holders; or
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(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture;
(3) modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provision of this Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby; or
(4) make the Securities subordinated in right of payment to any extent
or under any circumstances to any other indebtedness, except to the extent no
less favorable to the Holders than would be consistent with Article XII
hereof as in effect on the Issue Date.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the 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 supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or under
Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or
waiver.
SECTION 3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice
to the Company or the Person designated by the Company as the Person to whom
consents should be sent if such revocation is received by the Company or such
Person before the date on which the Trustee receives an Officers'
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Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
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 amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled 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 ninety days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses
(1) through (4) of Section 9.2 hereof, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security;
PROVIDED, that any such waiver shall not impair or affect the right of any
Holder to receive payment of principal and premium of and interest on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement
of any such payment on or after such respective dates.
SECTION 5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee or require the Holder to put an appropriate notation on the Security.
The Trustee may place an appropriate notation on the Security 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 Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Any failure to make the appropriate notation or to issue a
new Security shall not affect the validity of such amendment, supplement or
waiver.
SECTION 6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX; PROVIDED, that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects
the Trustee's own rights, duties or immunities under this Indenture. The
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
SECTION 7. AGREEMENT BY REPRESENTATIVE UNDER THE CREDIT AGREEMENT.
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Notwithstanding any of the above, however, so long as any Senior Debt
is outstanding under the Credit Agreement, no such modification, supplement or
waiver of any of the terms or provisions of Article XIII shall be effective
unless expressly agreed to in writing by the Representative under the Credit
Agreement. So long as any Senior Debt is outstanding under the Credit
Agreement, the Trustee shall deliver written notice of any modification or
supplement to the Securities or this Indenture to the Representative under the
Credit Agreement no less than five business days before the effective date of
any such modification or supplement.
ARTICLE X
RESERVED
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A CHANGE
OF CONTROL.
(a) In the event that a Change of Control occurs, each
Holder shall have the right, at such Holder's option, subject to the terms
and conditions of this Indenture, to require the Company to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to an irrevocable and unconditional offer, as described
below (the "CHANGE OF CONTROL OFFER"), at an offer price in cash (the "CHANGE
OF CONTROL PURCHASE PRICE") equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to and including the date of purchase (the "CHANGE OF CONTROL
PAYMENT") on a date that is not more than 90 days after the occurrence of
such Change of Control (the "CHANGE OF CONTROL PAYMENT DATE").
(b) In the event of a Change of Control, the Company shall
follow the procedures set forth in this Section 11.1 as follows:
(i) the Change of Control Offer shall commence within 45
days following the occurrence of a Change of Control;
(ii) the Change of Control Offer shall remain open for at
least 20 Business Days following its commencement except to the extent
that a longer period is required by applicable law (but in any case not
more than 40 Business Days following its commencement);
(iii) within three Business Days following the expiration of
a Change of Control Offer, the Company shall purchase all of the tendered
Securities at the Change of Control Purchase Price;
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(iv) if the Change of Control is on or after an interest
payment record date and on or before the related interest payment date,
any accrued interest (and Liquidated Damages, if any) will be paid to the
Person in whose name a Security is registered at the close of business on
such record date, and no additional interest will be payable to
Securityholders who tender Securities pursuant to the Change of Control
Offer;
(v) the Company shall provide the Trustee and the Paying
Agent with written notice of the Change of Control Offer at least three
Business Days before the commencement of any Change of Control Offer; and
(vi) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture)
shall govern the terms of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is being
made pursuant to this Section 11.1 and that all Securities,
or portions thereof, tendered will be accepted for payment;
(B) the Change of Control Purchase Price (including
the amount of accrued but unpaid interest (and Liquidated Damages,
if any)) and the Change of Control Payment Date;
(C) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(D) that, unless the Company defaults in depositing
cash with the Paying Agent in accordance with the last paragraph
of this subsection (b), or such payment is prevented for any reason,
any Security, or portion thereof, accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date;
(E) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security completed,
to the Paying Agent (which may not for purposes of this Section 11.1,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the
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address specified in the notice prior to the expiration of the Change
of Control Offer;
(F) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent receives, prior
to the expiration of the Change of Control Offer, a facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder is withdrawing
and a statement containing a facsimile signature and stating that
such Holder is withdrawing his election to have such principal
amount of Securities purchased;
(G) that Holders whose Securities are purchased only
in part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered; and
(H) a brief description of the events resulting in
such Change of Control.
On or before the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all Securities or portions
thereof properly tendered and not withdrawn pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent an amount in cash equal to the
Change of Control Payment in respect of all Securities or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate listing the
Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder so tendered the Change of Control
Payment for such Securities, and the Trustee will promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Security
equal in principal amount to any unpurchased portion of the Securities
surrendered, if any, PROVIDED that each such new Security will be in a
principal amount of $1,000 or an integral multiple thereof. Any Securities
improperly tendered or withdrawn will be delivered promptly by the Company to
the Holder thereof. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
Any such Change of Control Offer shall 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 repurchase of the Securities as a result of a Change of Control.
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ARTICLE XII
GUARANTEE
SECTION 1. GUARANTEE.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, to the fullest
extent permitted by applicable law, each of the Guarantors hereby irrevocably
and unconditionally guarantees (the "GUARANTEE") to the Trustee and its
successors and assigns, irrespective of the validity and enforceability
against the Company and the other Guarantors of this Indenture, the
Securities or the obligations of the Company under this Indenture or the
Securities, that: (x) the principal of and premium (if any), and interest on
the Securities will be paid in full when due, whether at the Maturity Date or
Interest Payment Date, by acceleration, call for redemption, upon a Change of
Control, an Asset Sale Offer or otherwise; (y) all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Securities
will be promptly paid in full or performed, all in accordance with the terms
of this Indenture and the Securities; and (z) in case of any extension of
time of payment or renewal of any Securities or any of such other
obligations, they will be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control, an Offer to
Purchase or otherwise. Failing payment when due of any amount so guaranteed
for whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default.
If the Company or a Guarantor defaults in the payment of the principal
of, premium, if any, or interest on, the Securities when and as the same shall
become due, whether upon maturity, acceleration, call for redemption, upon a
Change of Control Offer, upon an Asset Sale Offer or otherwise, without the
necessity of action by the Trustee or any Holder, each Guarantor shall be
required, jointly and severally, to promptly make such payment in full.
(b) Each Guarantor hereby agrees to the fullest extent permitted
by applicable law, that its obligations with regard to this Guarantee shall
be unconditional, irrespective of the validity, regularity or enforceability
of the Securities or this Indenture, the absence of any action to enforce the
same, any delays in obtaining or realizing upon or failures to obtain or
realize upon collateral, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company or right to require the prior disposition of the assets of the
Company to meet its obligations, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this
Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any Custodian
or similar official acting in
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relation to either the Company or such Guarantor, any amount paid by either
the Company or such Guarantor to the Trustee or such Holder, this Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor 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 hereby may be accelerated as provided in Section
6.2 hereof for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of this
Guarantee.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be in, but not in excess of,
the maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of any Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result
of a determination both that such Guarantee was made by such Guarantor
without fair consideration and, immediately after giving effect thereto, such
Guarantor was insolvent or unable to pay its debts as they mature or left
with an unreasonably small capital, then the obligations of such Guarantor
under such Guarantee shall be reduced by such court if and to the extent such
reduction would result in the avoidance of such annulment, avoidance or
subordination; PROVIDED, HOWEVER, that any reduction pursuant to this
paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, "fair consideration",
"insolvency", "unable to pay its debts as they mature", "unreasonably small
capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law.
SECTION 2. EXECUTION AND DELIVERY OF GUARANTEE.
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of this Indenture or such Guarantor's execution and delivery of an
indenture supplement pursuant to Section 12.3 hereof, be deemed to have signed
on each Security issued hereunder the notation of guarantee set forth on the
form of the Securities attached hereto as Exhibit A to the same extent as if the
signature of such Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 12.1 on behalf of each Guarantor. The notation of a guarantee set forth
on any Security shall be null and void and of no further effect with respect to
the guarantee of any Guarantor which, pursuant to Section 12.4 or Section 12.5,
is released from such Guarantee.
SECTION 3. CERTAIN BANKRUPTCY EVENTS.
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Each Guarantor hereby covenants and agrees, to the fullest extent that
it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 4. LIMITATION ON MERGER, CONSOLIDATION, ETC. OF GUARANTORS;
RELEASE OF CERTAIN GUARANTORS.
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving person) another person unless (i) subject to the
provisions of the following paragraph, the person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee, pursuant to which such person shall
unconditionally guarantee, on a senior subordinated basis, all of such
Guarantor's obligations under such Guarantor's Guarantee and the Indenture on
the terms set forth in the Indenture; and (ii) immediately before and
immediately after giving effect to such transaction on a PRO FORMA basis, no
Default or Event of Default shall have occurred or be continuing.
Notwithstanding the foregoing, upon the (i) sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Guarantor (or
all of its assets) to an entity which is not a Subsidiary of the Company or upon
the dissolution of any Guarantors which sale, disposition or dissolution is
otherwise in compliance with this Indenture, or (ii) the release of any
Guarantor from its obligations as a guarantor under the Credit Agreement, so
long as (a) no Default or Event of Default shall have occurred and be continuing
at the time of, or would occur after giving effect in a PRO FORMA basis to, such
release, (b) the Company is permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio Test set forth in
Section 4.11 on the date when such release occurs, and (c) the amount of
Indebtedness outstanding under the Credit Agreement for at least 30 days prior
to the time of such release is at least $250 million, such Guarantor will be
deemed released from its obligations under its Guarantee of the Securities;
PROVIDED, HOWEVER, that any such termination shall occur only to the extent that
all obligations of such Guarantor under all of its guarantees of, and under all
of its pledges of assets or other security interests which secure, any
Indebtedness of the Company shall also terminate upon such sale, disposition or
dissolution.
SECTION 5. FUTURE GUARANTORS.
Upon (i) the acquisition by the Company or Guarantor of the Capital
Stock of any Person, if, as a result of such acquisition, such Person becomes a
Subsidiary of the Company or any Guarantor or (ii) the last day of any fiscal
quarter during which any Subsidiary of the Company that
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is not a Guarantor as of such date and has not previously been released as a
Guarantor pursuant to Section 12.4 hereof becomes a Subsidiary, such
Subsidiary any such Subsidiary, except any Excluded Guarantee Subsidiary (as
defined below), (hereinafter being called a "FUTURE SUBSIDIARY GUARANTOR")
shall unconditionally guarantee the obligations of the Company with respect
to payment and performance of the Securities and the other obligations of the
Company under this Indenture to the same extent that such obligations are
guaranteed by the other Guarantors pursuant to Section 12.1 hereof; and,
within ten Business Days of the date of such occurrence, such Future
Subsidiary Guarantor shall execute and deliver to the Trustee a supplemental
indenture, which shall be in a form satisfactory to the Trustee, making such
Future Subsidiary Guarantor a party to this Indenture; PROVIDED, HOWEVER,
that the foregoing provisions of this Section 12.5 shall not apply to (A)
Subsidiaries of the Company or any Guarantor having total assets with a book
value of less than $500,000 and that do not guarantee any Senior Debt and (B)
Sun Systems, Inc. and each CareerStaff Company and Foreign Company, if such
person does not (i) guarantee or otherwise becomes liable for Indebtedness of
the Company or any Guarantor (other than, in the case of CareerStaff
Companies, Indebtedness under the Credit Agreement), and (ii) does not cause
more than two-thirds of its Equity Interests to be pledged to secure
Indebtedness of the Company or any Guarantor (other than, in the case of
CareerStaff Companies, Indebtedness under the Credit Agreement).
ARTICLE XIII
SUBORDINATION
SECTION 1. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and interest on the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of the Securities by the Company and
the Guarantors (including, without limitation, pursuant to Section 4.14, 11.1,
or Article XII) is subordinated, to the extent and in the manner provided in
this Article XIII, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt of the Company and the Guarantors and that these subordination
provisions are for the benefit of the holders of Senior Debt.
This Article XIII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debts and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment (by set-off or otherwise) shall be made by or on
behalf of the Company or a Guarantor, as applicable, on account of the
principal of, premium, if any, or interest on the Securities (including any
repurchases of Securities), or on account of the redemption provisions of the
Securities, for cash or property (other than Junior Securities), (i) upon the
maturity
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of any Senior Debt of the Company or such Guarantor, as applicable,
by lapse of time, acceleration (unless waived) or otherwise, unless and until
all principal of, premium, if any, and the interest on such Senior Debt are
first paid in full in cash or Cash Equivalents (or such payment is duly
provided for) or otherwise to the extent holders accept satisfaction of
amounts due by settlement in other than cash or Cash Equivalents, or (ii) in
the event of default in the payment of any principal of, premium, if any, or
interest on Senior Debt of the Company or such Guarantor when it becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (a "PAYMENT DEFAULT"), unless and until such Payment
Default has been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits the holder of Senior Debt to declare such
Senior Debt to be due and payable and (ii) written notice of such event of
default given to the Company and the Trustee by the Representative under the
Credit Agreement or the holders of an aggregate of at least $50 million
principal amount outstanding of any other Senior Debt or their representative
(a "PAYMENT NOTICE"), then, unless and until such event of default has been
cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company or any Guarantor which
is an obligor under such Senior Debt on account of the principal of, premium,
if any, or interest on the Securities (including any repurchases of any of
the Securities), or on account of the redemption provisions of the
Securities, in any such case, other than payments made with Junior
Securities. Notwithstanding the foregoing, unless the Senior Debt in respect
of which such event of default exists has been declared due and payable in
its entirety within 179 days after the Payment Notice is delivered as set
forth above (the "PAYMENT BLOCKAGE PERIOD") (and such declaration has not
been rescinded or waived), at the end of the Payment Blockage Period, the
Company and the Guarantors shall be required to pay all sums not paid to the
Holders of the Securities during the Payment Blockage Period due to the
foregoing prohibitions and to resume all other payments as and when due on
the Securities. Any number of Payment Notices may be given; PROVIDED that
(i) not more than one Payment Notice shall be given within a period of any
360 consecutive days, and (ii) no default that existed upon the date of such
Payment Notice or the commencement of such Payment Blockage Period (whether
or not such event of default is on the same issue of Senior Debt) shall be
made the basis for the commencement of any other Payment Blockage Period
unless such other Payment Blockage Period is commenced by a Payment Notice
from the Representative under the Credit Agreement and such event of default
shall have been cured or waived for a period of at least 90 consecutive days.
(c) Upon any distribution of assets of the Company or any
Guarantor upon any dissolution, winding up, total or partial liquidation or
reorganization of the Company or a Guarantor, whether voluntary or involuntary,
in bankruptcy, insolvency, receivership or a similar proceeding or upon
assignment for the benefit of creditors or any marshalling of assets or
liabilities, (i) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, will first be entitled to receive payment in full in
cash or Cash Equivalents (or have such payment duly provided for to the
satisfaction of such holders) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash Equivalents
before the Holders are entitled to receive any payment on account of principal
of, premium, if any, and interest on the Securities (other
79
than Junior Securities) and (ii) any payment or distribution of assets of the
Company or such Guarantor of any kind or character from any source, whether
in cash, property or securities (other than Junior Securities) to which the
Holders or the Trustee on behalf of the Holders would be entitled (by set-off
or otherwise), except for the subordination provisions contained in this
Indenture, will be paid by the liquidating trustee or agent or other person
making such a payment or distribution directly to the holders of such Senior
Debt or their representative to the extent necessary to make payment in full
(or have such payment duly provided for) on all such Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.
(d) In furtherance of the provisions of Section 13.1, in the
event that, notwithstanding the foregoing provisions of this Section 13.2, any
payment or distribution of assets of the Company or any Guarantor (other than
Junior Securities) shall be received by the Trustee or the Holders at a time
when such payment or distribution is prohibited by the provisions of this
Section 13.2, such payment or distribution shall be held in trust for the
benefit of the holders of such Senior Debt, and shall be paid or delivered by
the Trustee or such Holders, as the case may be, to the holders of such Senior
Debt remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate principal amounts remaining unpaid on account
of such Senior Debt held or represented by each, for application to the payment
of all such Senior Debt remaining unpaid, to the extent necessary to pay or to
provide for the payment of all such Senior Debt in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.
The subordination provisions hereof shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any Senior Debt
is rescinded or must otherwise be returned by any holder of such Senior Debt
upon the insolvency, bankruptcy or reorganization of the Company, any Guarantor
or otherwise, all as though such payment has not been made.
SECTION 3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or any Guarantor or
upon any dissolution, winding up, total or partial liquidation or reorganization
of the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, will first be entitled to receive payment in full
in cash or Cash Equivalents before the Holders are entitled to receive any
payment on account of the principal of, premium, if any, and interest on the
Securities or any Obligation in respect of the Securities (other than Junior
Securities);
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(b) any payment or distribution of assets of the Company or such
Guarantor of any kind or character from any source, whether in cash, property
or securities (other than Junior Securities) to which the Holders or the
Trustee on behalf of the Holders would be entitled (by set-off or otherwise),
except for the provisions of this Article XIII, shall be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of such Senior Debt or their
representative to the extent necessary to make payment in full on all such
Senior Debt remaining unpaid, after giving effect to any concurrent payment
or distribution to the holders of such Senior Debt; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company or any Guarantor (other than Junior
Securities) shall be received by the Trustee or the Holders at a time when
such payment or distribution is prohibited by the foregoing provisions, such
payment or distribution shall be held in trust for the benefit of the holders
of such Senior Debt, and shall be paid or delivered by the Trustee or such
Holders, as the case may be, to the holders of such Senior Debt remaining
unpaid to their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the aggregate
principal amounts remaining unpaid on account of such Senior Debt held or
represented by each, for application to the payment of all such Senior Debt
remaining unpaid, to the extent necessary to pay all such Senior Debt in full
in cash or Cash Equivalents after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
SECTION 4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
DEBT.
Subject to the payment in full in cash or Cash Equivalents of all Senior
Debt of the Company or any Guarantor as provided herein, the Holders of
Securities shall be subrogated to the rights of the holders of such Senior
Debt to receive payments or distributions of assets of the Company applicable
to the Senior Debt until all amounts owing on the Securities shall be paid in
full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Debt by or on behalf of the
Company or any Guarantor, or by or on behalf of the Holders by virtue of this
Article XIII, which otherwise would have been made to the Holders shall, as
between the Company or any Guarantor and the Holders, be deemed to be payment
by the Company or any Guarantor or on account of such Senior Debt, it being
understood that the provisions of this Article XIII are and are intended
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of such Senior Debt, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XIII shall have been
applied, pursuant to the provisions of this Article XIII, to the payment of
amounts payable under Senior Debt of the Company or any Guarantor, then the
Holders shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess
of the amount sufficient to pay all amounts payable under or in respect of
such Senior Debt in full in cash or Cash Equivalents.
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SECTION 5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS UNCONDITIONAL.
Nothing contained in this Article XIII or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and
any Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium,
if any, and interest on the Securities as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders and creditors of the Company and the
Guarantors other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XIII, of the
holders of Senior Debt in respect of cash, property or securities of the
Company and the Guarantors received upon the exercise of any such remedy.
Notwithstanding anything to the contrary in this Article XIII or elsewhere in
this Indenture or in the Securities, upon any distribution of assets of the
Company and the Guarantors referred to in this Article XIII, the Trustee,
subject to the provisions of Sections 7.1 and 7.2, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
Trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company or any Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIII so long as such court has
been apprised of the provisions of, or the order, decree or certificate makes
reference to, the provisions of this Article XIII. Nothing in this Section
13.5 shall apply to the claims of, or payments to, the Trustee under or
pursuant to Section 7.7.
SECTION 6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF
NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee unless and until a Trust Officer of the Trustee or any Paying
Agent shall have received, no later than one Business Day prior to such
payment written notice thereof from the Company or from one or more holders
of Senior Debt or from any representative therefor and, prior to the receipt
of any such written notice, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, shall be entitled in all respects conclusively to
assume that no such fact exists.
SECTION 7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article VIII shall be for the sole benefit of Securityholders and, to
the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreement and (ii)
allocated for the payment of Securities, shall not be subject to the
subordination
82
provisions of this Article XIII. Otherwise, any deposit of assets with the
Trustee or the Agent (whether or not in trust) for the payment of principal
of or interest on any Securities shall be subject to the provisions of
Sections 13.1, 13.2, 13.3 and 13.4; PROVIDED that, if prior to one Business
Day preceding the date on which by the terms of this Indenture any such
assets may become distributable for any purpose (including without
limitation, the payment of either principal of or interest on any Security)
the Trustee or such Paying Agent shall not have received with respect to such
assets the written notice provided for in Section 13.6, then the Trustee or
such Paying Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on
or after such date.
SECTION 8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to enforce
subordination provisions contained in this Article XIII shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or any Guarantor or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company or any Guarantor
with the terms of this Indenture, regardless of any knowledge thereof which
any such holder may have or be otherwise charged with. The holders of Senior
Debt may extend, renew, modify or amend the terms of the Senior Debt or any
security therefor and release, sell or exchange such security and otherwise
deal freely with the Company and the Guarantors, all without affecting the
liabilities and obligations of the parties to this Indenture or the Holders.
SECTION 9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION
OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XIII and to protect the rights of the Holders pursuant to
this Indenture, and appoints the Trustee his attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation
or reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of assets and liabilities of the
Company or any Guarantor), the immediate filing of a claim for the unpaid
balance of his Securities in the form required in said proceedings and cause
said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or claims, then the holders of
the Senior Debt or their representative are or is hereby authorized to have
the right to file and are or is hereby authorized to file an appropriate
claim for and on behalf of the Holders of said Securities. Nothing herein
contained shall be deemed to authorize the Trustee or the holders of Senior
Debt or their representative to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any
Holder thereof,
83
or to authorize the Trustee or the holders of Senior Debt or their
representative to vote in respect of the claim of any Securityholder in any
such proceeding.
SECTION 10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in this
Article XIII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture
shall be construed to deprive the Trustee of any of its rights as such holder.
SECTION 11. ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if
any, or interest on the Securities by reason of any provision of this Article
XIII shall not be construed as preventing the occurrence of a Default or an
Event of Default under Section 6.1 or in any way limit the rights of the
Trustee or any Holder to pursue any other rights or remedies with respect to
the Securities.
SECTION 12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt, and shall not be liable to any such holders (other than for
its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company, any
Guarantor or any other Person, cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article XIII or
otherwise. Nothing in this Section 13.12 shall affect the obligation of any
other such Person to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Debt or their representative. In the
event of any conflict between the fiduciary duty of the Trustee to the
Holders of Securities and to the holders of Senior Debt, the Trustee is
expressly authorized to resolve such conflict in favor of the Holders.
ARTICLE XIV
MISCELLANEOUS
SECTION 1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 2. NOTICES.
Any notices or other communications to the Company or any Guarantor or
the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand
84
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Company or any Guarantor:
Sun Healthcare Group, Inc.
000 Xxx Xxxx XX
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Shearman & Sterling
000 Xxxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
if to the Trustee:
First Trust National Association
First Trust Center
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or
made as of the date so delivered, if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
85
SECTION 3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA Section 312(c).
SECTION 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, such Person shall furnish to
the Trustee:
(1) an Officers' Certificate (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 met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been met.
SECTION 5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or 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, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been met;
and
(4) a statement as to whether or not, in the opinion of each such Person,
such condition or covenant has been met; PROVIDED, HOWEVER, that with respect
to matters of fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
86
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 7. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such
place, payment may be made at such place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 8. GOVERNING LAW.
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH
OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE
GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
87
SECTION 10. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, director,
officer or employee, as such, past, present or future, of the Company or any
Guarantor, or any successor entity, shall have any personal liability in
respect of the obligations of the Company and the Guarantors under the
Securities, this Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation by reason of his, her or its
status as such partner, incorporator, stockholder, director, officer or
employee. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
SECTION 11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the 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 15. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in
accordance with the terms and conditions of the Registration Rights Agreement
and shall pay all costs and expenses (including attorneys' fees for the
Company and the Trustee) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall
be entitled to receive from the Company any such
88
Officers' Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this
Indenture under the TIA.
SECTION 16. REGISTRATION RIGHTS.
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject
to the terms of, the Registration Rights Agreement.
89
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SUN HEALTHCARE GROUP, INC.,
a Delaware corporation
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President,
Financial Services and Chief
Financial Officer
FIRST TRUST NATIONAL
ASSOCIATION,
as Trustee
By:
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Trust Officer
GUARANTORS, as listed on Schedule A
to the Purchase Agreement
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer of the
Guarantors except for Accel-
erated Care Plus, LLC of
which he is Senior Vice Presi-
dent and Chief Executive Offi-
cer of its members HC, Inc.
and Cal-Med, Inc.
91
EXHIBIT A
[FORM OF SECURITY]
SUN HEALTHCARE GROUP, INC.
9 1/2% SERIES A (1) SENIOR SUBORDINATED NOTE DUE 2007
CUSIP No. ______________
No. $
Sun Healthcare Group, Inc., a Delaware corporation (hereinafter
called the "COMPANY", which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____, or registered assigns, the principal sum of _____ Dollars, on July 1,
2007.
Interest Payment Dates: July 1 and January 1, commencing January
1, 1998.
Record Dates: June 15 and December 15.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated:
SUN HEALTHCARE GROUP, INC.,
a Delaware corporation
By:
---------------------------------------
Name:
Title:
------------------------
(1) Series A should be replaced with Series B in the Exchange Securities.
A-1
Attest:
----------------------------
Name:
Title:
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
---------------------------------
Authorized Signatory
Dated:
A-3
SUN HEALTHCARE GROUP, INC.
91/2% SERIES A (2) SENIOR SUBORDINATED NOTE DUE 2007
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("XXX"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as 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.(3)
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT)(A "QIB"), OR (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING
THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE
--------------
(2) Series A should be replaced with Series B in the Exchange Security.
(3) This paragraph should only be added if the Security is issued in
global form.
A-4
ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
STATE SECURITIES LAWS OR (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING RESTRICTIONS.(4)
1. INTEREST.
Sun Healthcare Group, Inc., a Delaware corporation (hereinafter
called the "COMPANY," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 91/2% per annum. To the extent it is lawful,
the Company promises to pay interest on any interest payment due but unpaid
on such principal amount at a rate of 91/2% per annum compounded
semi-annually.
The Company will pay interest semi-annually on July 1 and January 1
of each year (each, an "INTEREST PAYMENT DATE"), commencing January 1, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities,
from the date of the original issuance. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Securities to a
--------------
(4) This paragraph should be included only for the Initial Securities.
A-5
Paying Agent to collect principal payments. Except as provided below, the
Company shall pay principal and interest in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
payment of public and private debts ("CASH"). The Securities will be payable
as to principal, premium and interest at the office or agency of the Company
maintained for such purpose within the Borough of Manhattan, the City and
State of New York or, at the option of the Company, payment of principal,
premium and interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and PROVIDED that payment by
wire transfer of immediately available funds will be required with respect to
principal of and interest and premium on all Global Securities and all other
Securities the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent at least 5 Business Days
prior to the relevant record date.
3. PAYING AGENT AND REGISTRAR.
Initially, First Trust National Association (the "TRUSTEE"), will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any
of its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
July 8, 1997 (the "INDENTURE"), among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act, as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and said Act for a statement of
them. The Securities are senior subordinated obligations of the Company
limited in aggregate principal amount to $250,000,000. The Securities are,
to the extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of all Senior Debt
of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose. The Securities are guaranteed on a senior
subordinated basis by the Guarantors.
5. REDEMPTION.
The Securities may be redeemed in whole or from time to time in
part at any time on and after July 1, 2002, at the option of the Company, at
the Redemption Price (expressed as a percentage of principal amount) set
forth below with respect to the indicated
A-6
Redemption Date, in each case (subject to the right of Holders of record on a
Record Date that is on or prior to such Redemption Date to receive interest
due on the Interest Payment Date to which such Record Date relates), plus any
accrued but unpaid interest to the Redemption Date. The Securities may not
be so redeemed prior to July 1, 2002.
If redeemed during
the 12-month period
Commencing July Redemption Price
---------------------- ----------------
2002 . . . . . . . . . 104.7500%
2003 . . . . . . . . . 103.1667%
2004 . . . . . . . . . 101.5833%
2005 and thereafter. . 100.0000%
Any such redemption will comply with Article III of the Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption
shall have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price, plus any accrued and unpaid interest to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may
register the transfer of, or exchange Securities in 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 Securities (a) selected for
redemption except the unredeemed portion of any Security being redeemed in
part or (b) for a period beginning 15 Business Days before the mailing of a
notice of an offer to repurchase or redemption and ending at the close of
business on the day of such mailing.
A-7
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, cash,
U.S. Government Obligations or a combination thereof, in such amounts as will
be sufficient in the opinion of a nationally recognized firm of independent
public accountants selected by the Trustee, to pay the principal of, premium,
if any, and interest on the Securities to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding their obligation to pay the
principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its obligations discharged with respect to
outstanding Securities.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with
any provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may under certain
circumstances amend or supplement the Indenture or the Securities to, among
other things, cure any ambiguity, defect or inconsistency, or make any other
change that does not adversely affect the rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and the Guarantors to, among other things, Incur additional
Indebtedness and issue Preferred Stock, pay dividends or make certain other
Restricted Payments, enter into certain transactions with Affiliates, incur
Liens, sell assets and subsidiary stock, merge or consolidate with any other
A-8
Person or transfer (by lease, assignment or otherwise) substantially all of
the properties and assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must
periodically report to the Trustee on compliance with such limitations.
13. RANKING.
Payment of principal, premium, if any, and interest on the
Securities is subordinated, in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior Debt.
14. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to offer to purchase on the Change of Control Payment Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Payment
Date. Holders of Securities will receive a Change of Control Offer from the
Company prior to any related Change of Control Payment Date and may elect to
have such Securities purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of
the Company, the Guarantors or any of their respective Subsidiaries to sell
assets and subsidiary stock. In the event the proceeds from a permitted
Asset Sale exceed certain amounts, as specified in the Indenture, the Company
will be required either to reinvest the proceeds of such Asset Sale in a
Related Business, repay certain Indebtedness or to make an offer to purchase
each Holder's Securities at 100% of the principal amount thereof, plus
accrued interest, if any, to the purchase date.
15. NOTATION OF GUARANTEE.
As set forth more fully in the Indenture, the Persons constituting
Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 12.1 of the Indenture, to the Holder and to the Trustee and its
successors and assigns, that (i) the principal of and interest on the
Security will be paid, whether at the Maturity Date or Interest Payment
Dates, by acceleration, call for redemption upon a Change of Control Offer,
upon an Asset Sale Offer or otherwise, and all other obligations of the
Company to the Holder or the Trustee under the Indenture or this Security
will be promptly paid in full or performed, all in accordance with the terms
of the Indenture and this Security, and (ii) in the case of any extension of
payment or renewal of this Security or any of such other obligations, they
will be paid in full when due or performed in accordance with the terms of
such extension or renewal, whether at the Maturity Date, as so extended, by
acceleration, call for redemption, upon a Change of Control Offer, upon an
Asset
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Sale Offer or otherwise. Such guarantees shall cease to apply, and shall be
null and void, with respect to any Guarantor who, pursuant to Article XII of
the Indenture, is released from its guarantees, or whose guarantees otherwise
cease to be applicable pursuant to the terms of the Indenture.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
16. DEFAULTS AND REMEDIES.
If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities may declare all the Securities to be due and payable
immediately; PROVIDED that so long as at least $15 million of Senior Debt is
outstanding under the Credit Agreement, no acceleration of the maturity of
the Securities shall be effective until the earlier of (i) five days after
notice of acceleration is received by the Representative under the Credit
Agreement (unless such Event of Default is cured or waived prior thereto) and
(ii) the date on which any Senior Debt under the Credit Agreement is
accelerated. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency with respect
to the Company or any of its Significant Subsidiaries, all outstanding
Securities will become due and payable without further action or notice.
Securityholders may not enforce the Indenture, the Securities or the
Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH 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, any of their Subsidiaries or any of their
respective Affiliates, and may otherwise deal with such Persons as if it were
not the Trustee.
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18. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, partner,
director, officer or employee, as such, past, present or future, of the
Company or any Guarantor, or any successor entity, shall have any personal
liability in respect of the obligations of the Company and the Guarantors
under the Securities or the Indenture by reason of his, her or its status as
such partner, incorporator, stockholder, director, officer or employee. Each
Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other
side of this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP
numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES.(5)
In addition to the rights provided to Holders of Securities under
the Indenture, Holders of Securities shall have all the rights set forth in
the Registration Rights Agreement.
23. GOVERNING LAW.
The Indenture and the Securities shall be governed by and construed
in accordance with the internal laws of the State of New York.
------------------
5 This paragraph should be included only for the Initial Securities.
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[FORM OF ASSIGNMENT]
I or we assign this Security to
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_______________________________
and irrevocably appoint __________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Securities and Exchange Commission of the effectiveness of a registration
statement under the Securities act of 1933, as amended (the "Securities Act")
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) July 1, 1999,
the undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that:
[Check One]
/ / (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by Rule 144A
thereunder.
/ / (b) this Security is being transferred other than in accordance
with (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Security in the name of any person other than
the Holder hereof unless and
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until the conditions to any such transfer or registration set forth herein
and in Section 2.6 of the Indenture shall have been satisfied.(6)
Dated: _______________ Signed: _______________________________________________
______________________________________________________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee (*)
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.(7)
Dated: __________________ _______________________________________________
NOTICE: To be executed
by an executive officer
------------------
6 This paragraph should be included only for the Initial Securities.
* NOTICE: The Signature must be guaranteed by an Institution which is
a member of one of the following recognized signature Guarantee Programs:
(I) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) in such other guarantee
program acceptable to the Trustee.
7 This paragraph should be included only for the Initial Securities.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article XI of the Indenture, check the
appropriate box: / / Section 4.14 / / Article XI.
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.14 or Article XI of the Indenture, as
the case may be, state the amount you want to be purchased: $________.
Date: ________________ Signature: ___________________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee**
-------------------
** NOTICE: The Signature must be guaranteed by an Insti-tution which is a
member of one of the following recognized signature Guarantee Programs:
(I) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange
Medallion Program (SEMP) or (iv) in such other guarantee program acceptable
to the Trustee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(8)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Principal Security officer of
Amount of Amount of following Trustee or
Date of this Global this Global such decrease (or Securities
Exchange Security Security increase) Custodian
------------------------------------------------------------------------------
-----------------------
(8) This schedule should only be added if the Security is issued in global
form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
TRANSFER RESTRICTED SECURITIES (9)
Re: ___% SERIES A SENIOR SUBORDINATED NOTES DUE 2007 OF SUN HEALTHCARE
GROUP, INC.
This Certificate relates to $______ principal amount of Securities held
in (check applicable space) _____ book-entry or ______ definitive form by
_________________ (the "TRANSFEROR").
The Transferor (check applicable box):
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (within the meaning of Rule 144A promulgated under the Securities
Act), that is aware that any sale of Securities to it will be made in
reliance on Rule 144A under the Securities Act and that is acquiring such
Transfer Restricted Security for its own account, or for the account of
another such "qualified institutional buyer" (in satisfaction of Section
2.06(a)(ii)(B) or Section 2.06 (d)(i)(B) of the Indenture).
/ / Such Security is being transferred pursuant to an exemption from
registration in accordance with Rule 144, or outside the United States in an
Offshore Transaction in compliance with Rule 904 under the Securities Act, or
pursuant to an effective reg-
------------------
9 This Certificate shall be included only for Initial Securities.
A-16
istration statement under the Securities Act (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
/ / Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act and in accordance with applicable securities laws of the
states of the United States, other than as provided in the immediately
preceding paragraph. An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
Certificate (in satisfaction of Section 2.6(a)(ii)(D) or Section 2.6(d)(i)(D)
of the Indenture).
____________________________________
[INSERT NAME OF TRANSFEROR]
By: ________________________________
Date: _____________________________
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES(10)
Re: ___% SERIES B SENIOR SUBORDINATED NOTES DUE 2007 OF SUN HEALTHCARE
GROUP, INC.
This Certificate relates to $______ principal amount of Securities held
in (check applicable box) _____ book-entry or ______ definitive form by
_____ (the "TRANSFEROR").
The Transferor (check applicable box):
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
/ / has requested the Registrar by written order to exchange or
register the transfer of a Security or Securities.
-------------------
10 This certificate shall be included only for the Exchange Securities.
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