DRAFT
______________________________________________________________________________
______________________________________________________________________________
XXXXX HEALTHCARE CORPORATION
________________________
$_________
____% EXCHANGEABLE SUBORDINATED NOTES due 2007
_______________________________
______________________
INDENTURE
Dated as of __________, 1995
______________________
____________________________
THE BANK OF NEW YORK
____________________________
as Trustee
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions............................................ 1
Section 1.02. Other Definitions...................................... 7
Section 1.03. Incorporation by Reference of TIA...................... 8
Section 1.04. Rules of Construction.................................. 8
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
Section 2.01. Form and Dating........................................ 9
Section 2.02. Execution and Authentication........................... 9
Section 2.03. Registrar and Paying Agent............................. 10
Section 2.04. Paying Agent to Hold Money in Trust.................... 10
Section 2.05. Holder Lists........................................... 11
Section 2.06. Transfer and Exchange.................................. 11
Section 2.07. Replacement Securities................................. 12
Section 2.08. Outstanding Securities................................. 12
Section 2.09. Treasury Securities.................................... 13
Section 2.10. Temporary Securities................................... 13
Section 2.11. Cancellation........................................... 13
Section 2.12. Defaulted Interest..................................... 13
Section 2.13. Record Date............................................ 14
Section 2.14. CUSIP Number........................................... 14
ARTICLE 3
COVENANTS
Section 3.01. Payment of Securities.................................. 14
Section 3.02. Maintenance of Office or Agency........................ 15
Section 3.03. Commission Reports..................................... 16
Section 3.04. Compliance Certificate................................. 17
Section 3.05. Taxes.................................................. 18
Section 3.06. Stay, Extension and Usury Laws......................... 18
Section 3.07. Change of Control...................................... 18
Section 3.08. Corporate Existence.................................... 21
ARTICLE 4
SUCCESSORS
Section 4.01. Limitations On Mergers, Consolidations or
Sales of Assets........................................ 21
Page
Section 4.02. Successor Corporation Substituted...................... 22
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default...................................... 23
Section 5.02. Acceleration........................................... 25
Section 5.03. Other Remedies......................................... 26
Section 5.04. Waiver of Past Defaults................................ 27
Section 5.05. Control by Majority.................................... 27
Section 5.06. Limitation on Suits.................................... 27
Section 5.07. Rights of Holders to Receive Payment................... 28
Section 5.08. Collection Suit by Trustee............................. 28
Section 5.09. Trustee May File Proofs of Claim....................... 28
Section 5.10. Priorities............................................. 29
Section 5.11. Undertaking for Costs.................................. 29
ARTICLE 6
TRUSTEE
Section 6.01. Duties of Trustee...................................... 30
Section 6.02. Rights of Trustee...................................... 31
Section 6.03. Individual Rights of Trustee........................... 32
Section 6.04. Trustee's Disclaimer................................... 32
Section 6.05. Notice of Defaults..................................... 33
Section 6.06. Reports by Trustee to Holders.......................... 33
Section 6.07. Compensation and Indemnity............................. 33
Section 6.08. Replacement of Trustee................................. 34
Section 6.09. Successor Trustee or Agent by Xxxxxx, etc.............. 35
Section 6.10. Eligibility; Disqualification.......................... 35
Section 6.11. Preferential Collection of Claims Against Company...... 36
ARTICLE 7
DISCHARGE OF INDENTURE
Section 7.01. Defeasance and Discharge of this Indenture and the
Securities............................................. 36
Section 7.02. Legal Defeasance and Discharge......................... 36
Section 7.03. Covenant Defeasance.................................... 37
Section 7.04. Conditions to Legal or Covenant Defeasance............. 37
Section 7.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.................. 39
Section 7.06. Repayment to Company................................... 40
Section 7.07. Reinstatement.......................................... 41
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
ii
Page
Section 8.01. Without Consent of Holders............................. 41
Section 8.02. With Consent of Holders................................ 42
Section 8.03. Compliance with TIA.................................... 43
Section 8.04. Revocation and Effect of Consents...................... 43
Section 8.05. Notation on or Exchange of Securities.................. 44
Section 8.06. Trustee to Sign Amendments, etc........................ 44
ARTICLE 9
MISCELLANEOUS
Section 9.01. TIA Controls........................................... 45
Section 9.02. Notices................................................ 45
Section 9.03. Communication by Holders with Other Holders............ 46
Section 9.04. Certificate and Opinion as to Conditions Precedent..... 46
Section 9.05. Statements Required in Certificate or Opinion.......... 47
Section 9.06. Rules by Trustee and Agents............................ 47
Section 9.07. Legal Holidays......................................... 47
Section 9.08. No Personal Liability of Directors, Officers,
Employees and Shareholders............................. 48
Section 9.09. Duplicate Originals.................................... 48
Section 9.10. Governing Law.......................................... 48
Section 9.11. No Adverse Interpretation of Other Agreements.......... 48
Section 9.12. Successors............................................. 48
Section 9.13. Severability........................................... 48
Section 9.14. Counterpart Originals.................................. 49
Section 9.15. Table of Contents, Headings, etc....................... 49
ARTICLE 10
REDEMPTION OF SECURITIES
Section 10.01. Notices to Trustee..................................... 49
Section 10.02. Selection of Securities to Be Redeemed................. 49
Section 10.03. Notice of Redemption................................... 50
Section 10.04. Effect of Notice of Redemption......................... 51
Section 10.05. Deposit of Redemption Price............................ 51
Section 10.06. Securities Redeemed in Part............................ 52
Section 10.07. Optional Redemption................................... 52
Section 10.08. Mandatory Redemption................................... 52
ARTICLE 11
EXCHANGE OF SECURITIES
Section 11.01. Right of Exchange...................................... 53
Section 11.02. Method of Exchange..................................... 53
Section 11.03. Fractional Interests................................... 55
iii
Section 11.04. Adjustment of Exchange Rate............................ 56
Section 11.05. Escrow Agreement....................................... 57
Section 11.06. Notice of Certain Events............................... 62
Section 11.07. Transfer Taxes......................................... 63
Section 11.08. Shares Free and Clear.................................. 64
Section 11.09. Cancellation of Securities............................. 64
Section 11.10. Consolidation, etc., of Vencor......................... 64
Section 11.11. Certain Tender or Exchange Offers for Vencor
Common Stock........................................... 65
Section 11.12. Obligations of Trustee and Escrow Agent................ 66
Section 11.13. Tax Adjustments........................................ 66
Section 11.14. Cash Equivalent........................................ 69
Section 11.15. Computation of Taxes Payable........................... 69
Section 11.16. Tax Assumptions for Permitted Transferees.............. 70
Section 11.17. Registration of Vencor Common Shares................... 70
ARTICLE 12
SUBORDINATION
Section 12.01. Agreement to Subordinate............................... 70
Section 12.02. Certain Definitions.................................... 71
Section 12.03. Liquidation; Dissolution; Bankruptcy................... 71
Section 12.04. Default on Designated Senior and Senior
Subordinated Debt...................................... 72
Section 12.05. Acceleration of Securities............................. 73
Section 12.06. When Distribution Must Be Paid Over.................... 73
Section 12.07. Notice by Company...................................... 73
Section 12.08. Subrogation............................................ 74
Section 12.09. Relative Rights........................................ 74
Section 12.10. Subordination May Not Be Impaired by Company........... 74
Section 12.11. Distribution or Notice to Representative............... 75
Section 12.12. Rights of Trustee and Paying Agent..................... 75
Section 12.13. Authorization to Effect Subordination.................. 75
Section 12.14. Amendments............................................. 76
EXHIBITS
Exhibit A FORM OF SECURITY
iv
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
310 (a)(1)............................................ 6.10
(a)(2)............................................. 6.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 6.10
(b) ............................................... 6.08; 6.10
(c) ............................................... N.A.
311 (a) .............................................. 6.11
(b) ............................................... 6.11
(c) ............................................... N.A.
312 (a)............................................... 2.05
(b)................................................ 9.03
(c) ............................................... 9.03
313 (a) .............................................. 6.06
(b)(1) ............................................ N.A.
(b)(2) ............................................ 6.06
(c) ............................................... 6.06; 9.02
(d)................................................ 6.06
314 (a) .............................................. 3.03; 9.02
(b) ............................................... N.A.
(c)(1)............................................. 9.04
(c)(2)............................................. 9.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e) .............................................. 9.05
(f)................................................ N.A.
315 (a)...............................................6.01(iii)(b)
(b)................................................ 6.05; 9.02
(c) .............................................. 6.01(i)
(d)................................................ 6.01(iii)
(e)................................................ 5.11
316 (a)(last sentence) ............................... 2.09
(a)(1)(a).......................................... 5.05
(a)(1)(b) ......................................... 5.04
(a)(2)............................................. N.A.
(b) ............................................... 5.07
(c) ............................................... 2.13; 8.04
317 (a)(1) ........................................... 5.08
(a)(2)............................................. 5.09
(b) ............................................... 2.04
318 (a)............................................... 9.01
(b)................................................ N.A.
(c)................................................ 9.01
N.A. means not applicable.
____________________________
*THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
INDENTURE dated as of __________, 1995 between Xxxxx Healthcare Corporation, a
Nevada corporation (the "COMPANY"), and The Bank of New York, as trustee
(the "TRUSTEE").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the ____%
Exchangeable Subordinated Notes due 2007 (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"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.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee thereof.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE" means, at the time any determination thereof is to be
made, any lease of property, real or personal, in respect of which the present
value of the minimum rental commitment would be capitalized on a balance sheet
of the lessee in accordance with GAAP.
"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.
1
"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.
"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,
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 TRIGGERING EVENT" means the occurrence of both a
Change of Control and a Rating Decline.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means Xxxxx Healthcare Corporation, as obligor under the
Securities, unless and until a successor replaces Xxxxx Healthcare Corporation,
in accordance with Article 4 hereof and thereafter includes such successor.
"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 Disqualified 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 hereof 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.
"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 hereof or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing
2
Directors who were members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 9.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"CREDIT FACILITY" means that certain Credit Agreement, dated as of
February 28, 1995, by and among the Company and Xxxxxx Guaranty Trust Company of
New York and the other banks that are party thereto, providing for $1.8 billion
in aggregate principal amount of senior term debt and up to $500.0 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 as of August 31, 1995, and as amended,
modified, extended, renewed, refunded, replaced or refinanced, in whole or in
part, from time to time.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"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, as in effect from time to time.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"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.
"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.
3
"HOLDER" means a Person in whose name a Security is registered.
"INDEBTEDNESS" means with respect to any Person, any indebtedness 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 banker's 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, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"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).
"MARKET PRICE" means as of any time of determination the average of
the sale prices of the Vencor Common Stock (or other securities held by the
Escrow Agent) for the five Business Day period (appropriately adjusted to take
into account the occurrence during such period of certain events that would
result in an adjustment of the Exchange Rate with respect to the Vencor Common
Shares) commencing on the first Business Day after delivery by the Company or
the Escrow Agent of notice to the Holders that the Company has elected to pay
cash in lieu of delivering Vencor Common Shares (or other property deliverable
upon such exchange) in exchange for any Securities.
"MOODY'S" means Xxxxx'x Investors Services, Inc. and its successors.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
4
"OFFICERS" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
and any Vice President of the Company or any Subsidiary, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers,
one of whom must be the principal executive officer, principal financial officer
or principal accounting officer of the Company.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary or the Trustee.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"RATING AGENCIES" means (i) S&P and (ii) Moody's or (iii) if S&P or
Xxxxx'x or both shall not make a rating of the Securities publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, shall be substituted for S&P or Xxxxx'x or both, as the
case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (ii)
with respect to Moody's, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories); and (iii) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In determining
whether the rating of the Securities has decreased by one or more gradations,
gradations within Rating Categories (+ and - for S&P, 1, 2 and 3 for Xxxxx'x; or
the equivalent gradations for another Rating Agency) shall be taken into account
(E.G., with respect to S&P, a decline in a rating from BB+ to BB, as well as
from BB- to B+, shall constitute a decrease of one gradation).
"RATING DATE" means the date which is 90 days prior to the earlier of
(i) a Change of Control and (ii) the first public notice of the occurrence of a
Change of Control or of the intention by the Company to effect a Change of
Control.
"RATING DECLINE" means the occurrence on or within 90 days after the
date of the first public notice of the occurrence of a Change of Control or of
the intention by the Company to effect a Change of Control (which period shall
be extended so long as the rating of the Securities is under publicly announced
consideration for possible downgrade by any of the Rating Agencies) of: (a) in
5
the event the Securities are rated by either Xxxxx'x or S&P on the Rating Date
as Investment Grade, a decrease in the rating of the Securities by both Rating
Agencies to a rating that is below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by both Rating Agencies on the
Rating Date, a decrease in the rating of the Securities by either Rating Agency
by one or more gradations (including gradations within Rating Categories as well
as between Rating Categories).
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"SECURITIES" means the securities described above, issued under this
Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"S&P" means Standard & Poor's Corporation and its successors.
"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 that 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).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, except as provided in Section 8.03 hereof.
6
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"VENCOR" means Vencor, Inc., a Delaware corporation.
"VENCOR COMMON SHARES" means the 8,301,067 shares of Vencor Common
Stock to be deposited pursuant to the Escrow Agreement.
"VENCOR COMMON STOCK" means Shares of common stock, $.25 par value,
of Vencor, Inc.
"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.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
"Bankruptcy Law"...................... 5.01
"Change of Control Offer"............. 3.07
"Change of Control Payment"........... 3.07
"Change of Control Payment Date"...... 3.07
"Commencement Date"................... 2.15
"Covenant Defeasance"................. 7.03
"Custodian"........................... 5.01
"Event of Default".................... 5.01
"Legal Defeasance".................... 7.02
"Legal Holiday"....................... 9.07
"Notice of Default"................... 5.01
"Offer Amount"........................ 2.15
"Offer Period"........................ 2.15
"Paying Agent"........................ 2.03
"Registrar"........................... 2.03
7
SECTION 1.03. INCORPORATION BY REFERENCE OF XXX.
Whenever this Indenture refers to a provision of the TIA, the
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:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
"OBLIGOR" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. 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 in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
8
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
SECTION 2.01. FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Security shall be dated the date of its authentication. The
Securities shall be issuable only in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Securities for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture. The
form of Trustee's certificate of authentication to be borne by the Securities
shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities. The
aggregate principal amount of Securities outstanding at any time shall not
exceed the amount set forth herein except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
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 or an Affiliate of the Company.
9
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Securities
may be presented for registration of transfer or for exchange and where
Securities may be surrendered for exchange in accordance with the provisions of
Article 11 for Vencor Common Shares (and cash, other securities and other
property under certain circumstances) (including any co-registrar, the
"REGISTRAR") and (ii) an office or agency where Securities may be presented
for payment (the "PAYING AGENT"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder. The
Company shall notify the Trustee and the Trustee shall notify the Holders of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-registrar. The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to the due date of principal of, premium, if any, and
interest on any Securities, the Company shall deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and
interest becoming due. The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent shall hold in trust for
the benefit of the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Securities,
and shall notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company) shall have no
further liability for the money delivered to
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the Trustee. If the Company acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
SECTION 2.05. HOLDER 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
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, including
the aggregate principal amount of the Securities held by each thereof, and the
Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met; PROVIDED,
HOWEVER, that any Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar and the Trustee
duly executed by the Holder thereof or by his attorney duly authorized in
writing. To permit registrations of transfer and exchanges, the Company shall
issue and the Trustee shall authenticate Securities at the Registrar's request,
subject to such rules as the Trustee may reasonably require.
Neither the Company nor the Registrar shall be required to register
the transfer or exchange of a Security between the record date and the next
succeeding interest payment date.
No service charge shall be made to any Holder for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10 or 8.05 hereof, which shall be paid by the Company).
Prior to due presentment for registration of transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Security is registered as the absolute owner of such
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Security for the purpose of receiving payment of principal of, premium, if any,
and interest on such Security and for all other purposes whatsoever, whether or
not such Security is overdue, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
SECTION 2.07. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the
Company, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss which any of them may
suffer if a Security is replaced. Each of the Company and the Trustee may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 3.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Subject to Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities then outstanding have concurred in any demand, direction, waiver
or consent, Securities owned by the Company or any
12
Affiliate of the Company shall be considered as though not outstanding, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such demand, direction, waiver or consent, only Securities that a
Responsible Officer actually knows to be so owned shall be so considered.
Notwithstanding the foregoing, Securities that are to be acquired by the Company
or an Affiliate of the Company pursuant to an exchange offer, tender offer or
other agreement shall not be deemed to be owned by the Company or an Affiliate
of the Company until legal title to such Securities passes to the Company or
such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee, upon receipt of the written order of the Company signed
by two Officers of the Company, shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company and the Trustee consider appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee, upon receipt of the written order of the Company signed by two
Officers of the Company, shall authenticate definitive Securities in exchange
for temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall return
such cancelled Securities to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
related payment date, in each case at the rate provided in the Securities and in
Section 3.01 hereof. The Company shall, with the consent of the Trustee, fix or
cause to be fixed each such special record date and payment date. At least
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15 days before the special record date, the Company (or the Trustee, in the name
of and at the expense of the Company) shall mail to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
Trustee is not the permitted under this Indenture shall be determined as
316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and
if it does so, the Trustee shall use the CUSIP number in notices to Holders;
PROVIDED that any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the notice or on the
Securities and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee of any change in the CUSIP number.
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in this Indenture and the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary of the Company, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later than
five days following the date of payment, any money (including accrued interest)
that exceeds such amount of principal, premium, if any, and interest to be paid
on the Securities.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the interest rate then applicable to the Securities
to the extent lawful. In addition, it shall pay interest (including
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post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Securities may be
surrendered for registration of transfer or exchange and where Securities may be
surrendered for exchange in accordance with the provisions of Article 11 for
Vencor Common Shares (and cash, other securities and other property under
certain circumstances) and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company 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 of its obligation to maintain an office or agency in
the Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates The Bank of New York, 000 Xxxxxxx
Xxxxxx, 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000 as one such office or agency of the
Company in accordance with Section 2.03 hereof.
SECTION 3.03. COMMISSION REPORTS.
(i) So long as any of the Securities remain outstanding, the
Company shall provide to the Trustee within 15 days after the filing thereof
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. All obligors on the Securities shall comply with the provisions
of TIA Section 314(a). Notwithstanding that the Company may not
15
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations
promulgated by the Commission, the Company shall file with the Commission and
provide to the Trustee (a) within 90 days after the end of each fiscal year,
annual reports on Form 10-K (or any successor or comparable form) containing the
information required to be contained therein (or required in such successor or
comparable form), including a "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and a report thereon by the
Company's certified public accountants; (b) within 45 days after the end of each
of the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or
any successor or comparable form) containing the information required to be
contained therein (or required in any successor or comparable form), including a
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS"; and (c) promptly from time to time after the occurrence of an
event required to be therein reported, such other reports on Form 8-K (or any
successor or comparable form) containing the information required to be
contained therein (or required in any successor or comparable form); PROVIDED,
HOWEVER, that the Company shall not be in default of the provisions of this
Section 3.03(i) for any failure to file reports with the Commission solely by
the refusal of the Commission to accept the same for filing. Each of the
financial statements contained in such reports shall be prepared in accordance
with GAAP.
(ii) The Trustee, at the Company's expense, shall promptly mail
copies of all such annual reports, information, documents and other reports
provided to the Trustee pursuant to Section 3.03(i) hereof to the Holders at
their addresses appearing in the register of Securities maintained by the
Registrar.
(iii) Whether or not required by the rules and regulations of the
Commission, the Company shall 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.
(iv) The Company shall provide the Trustee with a sufficient number
of copies of all reports and other documents and information that the Trustee
may be required to deliver to the Holders under this Section 3.03.
(v) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 3.04. COMPLIANCE CERTIFICATE.
(i) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each has kept, observed, performed
and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge each entity has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action each is taking or proposes to take with respect thereto), all without
regard to periods of grace or notice requirements, and that to the best of his
or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the
Securities is prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
(ii) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 3.03 above shall be accompanied by a
written statement of the Company's certified independent public accountants (who
shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company or any
Subsidiary of the Company has violated any provisions of Article 3 or of Article
4 of this Indenture or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(iii) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of (a) any Default or Event of Default or (b) any event of default under any
other mortgage, indenture or instrument referred to in Section 5.01(v) hereof,
an Officers' Certificate specifying such Default, Event of Default or event of
default and what action the Company is taking or proposes to take with respect
thereto.
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SECTION 3.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except (i) as contested in good faith by appropriate proceedings and with
respect to which appropriate reserves have been taken in accordance with GAAP or
(ii) where the failure to effect such payment is not adverse in any material
respect to the Holders.
SECTION 3.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 3.07. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control Triggering Event, each
Holder of Securities shall have the right 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 the offer described below (the "CHANGE OF
CONTROL OFFER") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, thereon to
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 Triggering
Event (the "CHANGE OF CONTROL PAYMENT DATE").
Within 30 days following any Change of Control Triggering Event, the
Company shall mail, or at the Company's request the Trustee shall mail, a notice
of a Change of Control to each Holder (at its 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. The
Change of Control Offer shall remain open from the time of mailing until the
close of business on the Business Day next preceding the Change of Control
Payment Date. The notice, which shall govern the terms of the Change of Control
Offer, shall contain all instructions and materials necessary to enable the
Holders to tender Securities pursuant to the Change of Control Offer and shall
state:
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(1) that the Change of Control Offer is being made pursuant to
this Section 3.07 and that all Securities tendered will be
accepted for payment;
(2) the Change of Control Payment and the Change of Control
Payment Date, which date shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed;
(3) that any Security not tendered will continue to accrue
interest in accordance with the terms of this Indenture;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
any 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
Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice prior to
the close of business on the Business Day next preceding the
Change of Control Payment Date;
(6) that Holders will 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 Change of Control Payment Date, 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 Xxxxxx is
withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; and
19
(8) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with
respect to PRO FORMA historical financial information after
giving effect to such Change of Control, information regarding
the Person or Persons acquiring control and such Person's or
Persons' business plans going forward) and any other
information that would be material to a decision as to whether
to tender a Security pursuant to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered and not withdrawn pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Securities so tendered the Change of
Control Payment for such Securities, and the Trustee shall 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 shall be in a
principal amount of $1,000 or an integral multiple 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.
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
repurchase of Securities as a result of a Change of Control.
SECTION 3.08. CORPORATE EXISTENCE.
Subject to Section 3.07 and Article 4 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
20
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
ARTICLE 4
SUCCESSORS
SECTION 4.01. LIMITATIONS ON MERGERS, CONSOLIDATIONS OR SALES OF ASSETS.
The Company may not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or 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 corporation, Person or
entity 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 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,
lease, conveyance or other disposition shall have been made
assumes all the Obligations of the Company under this
Indenture and the Securities pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction 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 shall have Consolidated
Net Worth immediately after the transaction equal to or
greater than the Consolidated Net Worth of the Company
immediately preceding the transaction.
21
The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel, covering clauses (i) through (iv) above, stating that the
proposed transaction and such supplemental indenture comply with this Indenture.
The Trustee shall be entitled to conclusively rely upon such Officers'
Certificate and Opinion of Counsel.
SECTION 4.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 4.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation), and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company, herein.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(i) default for 30 days in the payment when due of interest
on the Securities;
(ii) default in payment when due of the principal of or
premium, if any, on the Securities at maturity or
otherwise;
(iii) failure by the Company to comply with the provisions of
Section 3.07;
(iv) failure by the Company to comply with any other covenant
or agreement in the Indenture or the Securities for the
period and after the notice specified below;
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(v) any default that 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 Significant
Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Significant Subsidiaries),
whether such Indebtedness or Guarantee exists on the
date hereof or is created after the date hereof, which
default (a) constitutes a Payment Default or (b) results
in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount
of any such 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 $25.0 million or more;
(vi) failure by the Company or any of its Significant
Subsidiaries to pay a final judgment or final judgments
aggregating in excess of $25.0 million entered by a
court or courts of competent jurisdiction against the
Company or any of its Significant Subsidiaries if such
final judgment or judgments remain unpaid or
undischarged for a period (during which execution shall
not be effectively stayed) of 60 days after their entry;
(vii) the Company or any Significant Subsidiary thereof
pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case in which it is
the debtor,
(c) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
23
(e) admits in writing its inability generally to pay
its debts as the same become due;
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any
Significant Subsidiary thereof in an involuntary
case in which it is the debtor,
(b) appoints a Custodian of the Company or any
Significant Subsidiary thereof or for all or
substantially all of the property of the Company
or any Significant Subsidiary thereof, or
(c) orders the liquidation of the Company or any
Significant Subsidiary thereof,
and the order or decree remains unstayed and in effect
for 60 days; and
(ix) failure by the Company to make any exchange of Vencor
Common Shares (or such other securities or property or
cash as shall be added to such Vencor Common Shares or
as such Vencor Common Shares shall have been changed
into as provided in Article 11 hereof) for any Security
at the Exchange Rate and upon the terms set forth in
Article 11 hereof.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "CUSTODIAN" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (iv) is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
principal amount of the then outstanding Securities notify the Company and the
Trustee in writing, of the Default and the Company does not cure the Default
within 60 days after receipt of such notice. The written notice must specify
the Default, demand that it be remedied and state that the notice is a "NOTICE
of Default."
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SECTION 5.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities by written notice to the
Company and the Trustee, may declare the unpaid principal of, premium, if any,
and any accrued and unpaid interest on all the Securities to be due and payable
immediately. Upon such declaration the principal, premium, if any, and interest
shall be due and payable immediately. If an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof occurs with respect to the Company
or any Significant Subsidiary thereof such an amount shall IPSO FACTO become
and be immediately due and payable without further action or notice on the part
of the Trustee or any Holder.
If an Event of Default occurs under this Indenture prior to the
maturity of the Securities by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of such Securities prior to the date of maturity, then
a premium with respect thereto (expressed as a percentage of the amount that
would otherwise be due but for the provisions of this sentence) shall become and
be immediately due and payable to the extent permitted by law upon the
acceleration of such Securities if such Event of Default occurs during the
twelve-month period beginning on __________ of the years set forth below:
YEAR PERCENTAGE
1995.............................. _______ %
1996.............................. _______ %
1997.............................. _______ %
1998.............................. _______ %
1999.............................. _______ %
2000.............................. _______ %
2001.............................. _______ %
2002.............................. _______ %
2003.............................. _______ %
2004.............................. _______ %
2005.............................. _______ %
2006.............................. _______ %
Any determination regarding the primary purpose of any such
action or inaction, as the case may be, shall be made by and set forth in a
resolution of the Board of Directors (including the concurrence of a majority
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of the independent directors of the Company then serving) delivered to the
Trustee after consideration of the business reasons for such action or inaction,
other than the avoidance of payment of such premium or prohibition on
redemption. In the absence of fraud, each such determination shall be final and
binding upon the Holders of Securities. Subject to Section 6.01 hereof, the
Trustee shall be entitled to rely on the determination set forth in any such
resolutions delivered to the Trustee.
SECTION 5.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or interest on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 5.04. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under this Indenture except a continuing
Default or Event of Default in the payment of the principal of, premium, if any,
or interest on any Security or in respect of the exchange of Securities pursuant
to Article 11 hereof. 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 any right consequent thereon.
SECTION 5.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders or that may involve
26
the Trustee in personal liability. The Trustee may take any other action which
it deems proper which is not inconsistent with any such direction.
SECTION 5.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Securities only if:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal, premium, if any, and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
SECTION 5.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 5.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company or any other
27
obligor for the whole amount of principal, premium, if any, and interest
remaining unpaid on the Securities and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
amounts due the Trustee under Section 6.07 hereof, including the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian 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 to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 6.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. 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.
SECTION 5.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 6.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
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Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 5.10 upon five Business Days prior notice to
the Company.
SECTION 5.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 5.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 6
TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE.
(i) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(ii) Except during the continuance of an Event of Default known to
the Trustee:
(a) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the
Trustee need perform only those duties that are specifically
set forth in this Indenture or the TIA and no
29
others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee, and
(b) 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
provisions hereof are 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.
(iii) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph
(ii) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 5.05 hereof.
(iv) Whether or not therein expressly so provided every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (i), (ii), and (iii) of this Section.
(v) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives security and
indemnity satisfactory to it against any loss, liability or expense.
(vi) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Absent written instruction from the Company, the Trustee shall not be required
to invest any such money. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
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(vii) The Trustee shall not be deemed to have knowledge of any
matter unless such matter is actually known to a Responsible Officer.
SECTION 6.02. RIGHTS OF TRUSTEE.
(i) The Trustee may conclusively rely upon 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 the document.
(ii) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(iii) 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.
(iv) The Trustee shall not be liable for any action it 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. A permissive right
granted to the Trustee hereunder shall not be deemed an obligation to act.
(v) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 6.03. 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 or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 6.10 and 6.11 hereof.
SECTION 6.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, nor shall it
be accountable for the Company's use of the proceeds from the
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Securities or any money paid to the Company or upon the Company's direction
under any provision of this Indenture, nor shall it be responsible for the use
or application of any money received by any Paying Agent other than the Trustee,
nor shall it be responsible for any statement or recital herein or any statement
in the Securities or any other document in connection with the sale of the
Securities or pursuant to this Indenture other than its certificate of
authentication.
SECTION 6.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders.
SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each December 31 beginning with the December 31
following the date hereof, the Trustee shall mail to the Holders a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Securities are listed. The Company shall promptly notify
the Trustee when the Securities are listed on any stock exchange.
SECTION 6.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee shall agree in writing. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
32
The Company shall indemnify the Trustee against any and all losses,
liabilities, damages, claims or expenses incurred by it arising out of or in
connection with the acceptance of its duties and the administration of the
trusts under this Indenture, except as set forth below. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 6.07 shall survive
the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(vii) or (viii) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
SECTION 6.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 6.10 hereof;
33
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) 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 Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 6.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, 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. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 6.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 6.08, the Company's obligations under Section 6.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 6.09. SUCCESSOR TRUSTEE OR AGENT BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee or Agent.
34
SECTION 6.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
within the twelve months preceding the requirements of TIA Section 310(a)(1),
310(b).
SECTION 6.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
(2) and (5). The Trustee is subject to TIA Section relationship listed in TIA
shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 7
DISCHARGE OF INDENTURE
SECTION 7.01. DEFEASANCE AND DISCHARGE OF THIS INDENTURE AND THE
SECURITIES.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, with respect
to the Securities, elect to have either Section 7.02 or 7.03 hereof be applied
to all outstanding Securities upon compliance with the conditions set forth
below in this Article 7.
SECTION 7.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 7.01 hereof of the option
applicable to this Section 7.02, the Company shall be deemed to have been
discharged from its 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
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 7.05 hereof and the other
Sections of this Indenture referred to in clauses (i) and (ii) of this Section
7.02, and to have satisfied all its other obligations under such Securities and
35
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 provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 7.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Securities when such payments are due,
(ii) the Company's obligations with respect to such Securities under Sections
2.04, 2.06, 2.07, 2.10 and 3.02 hereof, (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 6.07 hereof, and the Company's obligations in
connection therewith and (iv) this Article 7. Subject to compliance with this
Article 7, the Company may exercise its option under this Section 7.02
notwithstanding the prior exercise of its option under Section 7.03 hereof with
respect to the Securities.
SECTION 7.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 7.01 hereof of the option
applicable to this Section 7.03, the Company shall be released from its
obligations under the covenants contained in Section 3.07 and Article 4 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 (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 5.01(iii) hereof, 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 7.01 hereof of the option applicable to
this Section 7.03, Sections 5.01(iv) through 5.01(vi) hereof shall not
constitute Events of Default.
SECTION 7.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 7.02 or Section 7.03 hereof to the outstanding Securities:
36
(i) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.10 who shall agree to comply with the provisions of this
Article 7 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
cash in U.S. Dollars in an amount, or (b) non-callable Government
Securities that through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, cash in U.S. Dollars in
an amount, or (c) a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the principal
of, premium, if any, and interest on such outstanding Securities on the
stated maturity date of such principal or installment of principal,
premium, if any, or interest.
(ii) In the case of an election under Section 7.02 hereof, 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 hereof, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the 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 an election under Section 7.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States confirming that the Holders of the 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 with respect to the Securities
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
37
Section 5.01(vii) or 5.01(viii) hereof is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(v) Such Legal Defeasance or Covenant Defeasance shall 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 shall 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 shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 7.02 or 7.03 hereof was not made by the Company
with the intent of preferring the Holders of the Securities over the other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
(viii) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 7.02 hereof or the Covenant Defeasance under
Section 7.03 hereof (as the case may be) have been complied with as
contemplated by this Section 7.04.
SECTION 7.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 7.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
7.05, the "Trustee") pursuant to Section 7.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
38
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 cash or non-callable
Government Securities deposited pursuant to Section 7.04 hereof 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 the outstanding
Securities.
Anything in this Article 7 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any money or non-callable Government Securities held by it as provided
in Section 7.04 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
7.04(i) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 7.06. REPAYMENT TO COMPANY.
Any money 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 written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, 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 7.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Dollars
or non-callable Government Securities in accordance with Section 7.02
39
or 7.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 7.02 or 7.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 7.02 or
7.03 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 Security to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture
or the Securities without the consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iii) to provide for the assumption of the Company's
obligations to the Holders of the Securities in the case
of a merger, consolidation or sale of assets pursuant to
Article 4 hereof;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of the Securities or
that does not adversely affect the legal rights
hereunder of any such Holder; or
(v) to comply with requirements of the Commission in order
to effect or maintain the qualification of this
Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon receipt by the Trustee of the documents described in Section 8.06
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this
40
Indenture and to make any further appropriate agreements and stipulations which
may be therein contained, but the Trustee shall not be obligated to enter into
such supplemental indenture which affects its own rights, duties or immunities
under this Indenture or otherwise.
SECTION 8.02. WITH CONSENT OF HOLDERS.
Except as provided in the next succeeding paragraphs, this Indenture
or the Securities may be amended or supplemented 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), and any existing default or compliance with any provision
of this Indenture or the Securities may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities
(including consents obtained in connection with a tender offer or exchange offer
for such Securities).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 8.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment 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.
Subject to Sections 5.04 and 5.07 hereof, the Holders of a majority in aggregate
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities. Without the consent of each Holder affected, however, an amendment
or waiver may not (with respect to any Security held by a non-consenting
Holder):
41
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Security;
(iii) reduce the rate of or change the time for payment of interest
on any Security;
(iv) make any change regarding the exchange rights set forth in
Article 11 other than to increase the Exchange Rate;
(v) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities
(except a rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal amount
thereof and a waiver of the payment default that resulted from
such acceleration);
(vi) make any Security payable in money other than that stated in
the Securities;
(vii) make any change in Section 5.04 or 5.07 hereof; or
(viii) make any change in this sentence of this Section 8.02.
SECTION 8.03. COMPLIANCE WITH XXX.
Every amendment to this Indenture or the Securities shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver 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
Xxxxxx'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 its
Security if the Trustee receives written notice of revocation before the date
the waiver or amendment becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for determining which Holders must consent to such amendment or
42
waiver. If the Company fixes a record date, the record date shall be fixed at
(i) the later of 30 days prior to the first solicitation of such consent or the
date of the most recent list of Holders furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof or (ii) such other date as the
Company shall designate.
SECTION 8.05. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for
all Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment or waiver.
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 8 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 6.01, shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or Supplemental Indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it shall be valid and
binding upon the Company in accordance with its terms. The Company may not sign
an amendment or supplemental indenture until the Board of Directors approves it.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 9.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first
43
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company:
Xxxxx Healthcare Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Treasurer
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. XxXxxxxx
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Unless otherwise set forth above, any notice or communication to a
Holder shall be mailed by first class mail, certified or registered, return
receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or
Section 311(b). A Trustee who has resigned or been removed communication shall
to the extent required by the TIA. Failure to mail a notice or
44
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 9.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 9.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 9.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 9.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
SECTION 9.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
45
(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 satisfied; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied; 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 9.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 9.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
46
SECTION 9.08. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of the Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
SECTION 9.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 9.10. GOVERNING LAW.
The internal law of the State of New York, shall govern and be used
to construe this Indenture and the Securities, without regard to the conflict of
laws provisions thereof.
SECTION 9.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 9.12. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 9.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
47
SECTION 9.14. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 9.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 10.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Securities to be redeemed and (iv) the redemption price.
SECTION 10.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed at any time,
the Trustee shall select the Securities to be redeemed among the Holders in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are then listed, or, if the Securities are not
so listed, on a pro rata basis, by lot or by such method the Trustee shall deem
fair and appropriate; provided, that Securities with a principal amount of
$1,000 shall not be redeemed in part.
The Trustee shall promptly notify the Company 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 and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Securities of a Holder are to be redeemed, the
entire outstanding amount of Securities held by such Holder, even if not a
multiple of $1,000 shall be redeemed.
48
SECTION 10.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed by first class mail a notice of
redemption to each Holder of Securities to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the porion of the
principal amount of such Security to be redeemed and that, after the
redemption date upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion shall be
issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date;
(7) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Security shall not affect the validity
of the proceeding for the redemption of any other Security.
49
SECTION 10.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 10.03
hereof, Securities called for redemption become due and payable on the
redemption date at the redemption price plus accrued and unpaid interest, if
any, to such date.
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of, and accrued interest on, all Securities to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent of the Company in
excess of the amounts necessary to pay the redemption price of (including any
applicable premium), and accrued interest on, all Securities to be redeemed.
On and after the redemption date, interest ceases to accrue on the
Securities or the portions of Securities called for redemption. If a Security
is redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Security was registered at the close of business on
such record date. If any Security called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent lawful
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Securities and in Section 3.01 hereof.
SECTION 10.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
SECTION 10.07. OPTIONAL REDEMPTION.
On or after _________________, 1997, the Company may redeem all or
any portion of the Securities at a redemption price (expressed as a percentage
of the principal amount thereof), as set forth in the immediately succeeding
paragraph, plus accrued and unpaid interest, if any, to the redemption date
(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
50
Redemption Date); provided, however that the Securities are redeemable prior to
________________, 1998 only if, for a period of twenty consecutive trading days,
the last reported sale price for Vencor Common Shares shall have exceeded 150%
of the Exchange Price then in effect.
The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the 12-month period
beginning __________________ of the following years:
YEAR PERCENTAGE
---- ----------
1997....................... _____%
1998....................... _____%
1999....................... _____%
2000....................... _____%
2001....................... _____%
2002 and thereafter........ _____%
SECTION 10.08. MANDATORY REDEMPTION.
Subject to the Company's obligation to make an offer to repurchase
Securities under certain circumstance pursuant to Section 3.07 hereof, the
Company shall have no mandatory redemption or sinking fund obligations with
respect to the Securities.
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ARTICLE 11
EXCHANGE OF SECURITIES
SECTION 11.01. RIGHT OF EXCHANGE.
Subject to and upon compliance with the provisions of this Article
11, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may,
at any time or from time on or after September 28, 1997 and before the close of
business on _______, 2007 (or if not a Business Day the next preceding Business
Day), or, in case such Security or portion thereof shall have been called for
redemption prior to such date, then in respect of such Security or portion
thereof until and including, but (unless the Company shall default in payment
due upon the redemption thereof) not after, the close of business on the
Business Day next preceding the Redemption Date or, in case such Security or
portion thereof shall have been called for redemption in accordance with Section
11.11, then in respect of such Security or portion thereof until and including,
but (unless the Company shall default in payment due upon the redemption
thereof) not after, the close of business on the Business Day next preceding the
fifteenth day after the date the notice of redemption is mailed, be exchanged
for fully paid and non-assessable Vencor Common Shares (or such other securities
or property or cash as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have been changed into as provided in this Article
11) at the Exchange Rate hereinafter provided.
The rate at which Vencor Common Shares shall be delivered upon
exchange (herein called the "Exchange Rate") shall be initially _______ Vencor
Common Shares for each $1,000 principal amount of Securities exchanged. The
Exchange Rate shall be subject to adjustment as provided in Sections 11.04,
11.05 and 11.10.
SECTION 11.02. METHOD OF EXCHANGE.
In order to exercise the right of exchange, the Holder of any
Security to be exchanged shall surrender such Security to the Escrow Agent at
the office or agency maintained for that purpose pursuant to Section 2.03,
accompanied by written notice to the Company and the Escrow Agent that the
Holder elects to exchange such Security or, if less than the entire principal
amount of a Security is to be exchanged, the portion thereof to be exchanged.
Such notice shall also state the name or names (with address) in which the
certificate or certificates for Vencor Common Shares (or such other securities,
property or cash as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have been changed into as provided in this Article
11) which shall be issuable on such exchange shall be issued.
52
Securities surrendered for exchange shall be accompanied (if so required by the
Company or Escrow Agent) by proper assignments thereof to the Company or in
blank for transfer.
If the Company does not elect to deliver cash in lieu of Vencor
Common Shares pursuant to Section 11.13 hereof, as promptly as practicable after
the receipt of such notice and the proper surrender of such Security as
aforesaid (subject, however, to the following paragraph of this Section 11.02
and to Section 11.13), the Company shall deliver or cause the Escrow Agent to
deliver at said office or agency to such Holder, or on his written order, a
certificate or certificates for the number of full Vencor Common Shares (or such
other securities or property as such Vencor Common Shares shall have been
changed into as provided in this Article 11) deliverable upon the exchange of
any such Security (or specified portion thereof), the property and securities
(other than cash), if any, apportioned thereto, a check for any cash apportioned
thereto and provision shall be made for any fractional interests in Vencor
Common Shares or other securities or property as provided in Section 11.03.
Such exchange shall be deemed to have been effected immediately prior to the
close of business on the date on which such notice shall have been received by
the Company and the Escrow Agent and such Security shall have been properly
surrendered as aforesaid, and at such time the rights of the Holder of such
Security as a Holder shall cease and the person or persons in whose name or
names any certificate or certificates for Vencor Common Shares (or such other
securities or property as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have been changed into as provided in this Article
11) shall be deliverable upon such exchange shall, as between such person or
persons and the Company and any Permitted Transferee (as defined below), be
deemed to have become the holder or holders of record of the shares or
securities represented thereby.
Delivery of such certificate or certificates, of property and
securities, if any, apportioned thereto and of any check for any cash
apportioned thereto and for cash in lieu of fractional interests as aforesaid
may be delayed for a reasonable period of time at the request of the Company
(which shall be made by an Officer's Certificate) in order to effectuate the
calculation of the adjustments of the Vencor Common Shares (or such other
securities or property as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have been changed into as provided in this Article
11) and cash apportioned thereto pursuant to this Article 11, to obtain any
certificate representing securities to be delivered or to complete any
reapportionment of the Vencor Common Shares, cash and other property apportioned
thereto which is required by this Article 11. If, between any date an exchange
under this Section is deemed effected and delivery of the applicable security or
securities, such security or securities shall cease to have any or certain
rights, or a record date or effective date of a transaction to which Section
11.04, 11.05, or 11.10 applies shall occur, the person entitled to receive such
security or securities shall be entitled only to receive such
53
security or securities as so modified and any proceeds received thereon on or
after the date and time on which such an exchange is deemed effected, and the
Company, any Permitted Transferee (as defined below), the Trustee and the Escrow
Agent shall not otherwise be liable with respect to the modification, from the
date such an exchange is deemed effected to the date of such delivery, of such
security or securities.
Except as otherwise expressly provided in this Indenture, no payment
or adjustment shall be made upon any exchange on account of any interest accrued
on the Securities surrendered for exchange or on account of any dividends on the
Vencor Common Shares delivered upon such exchange; provided that interest
accrued on any Securities surrendered for exchange on or after any record date
and before the interest payment date relating thereto shall be paid to the
holder of record as of such record date.
In the case of any Security which is exchanged in part only, upon
such exchange the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company except for transfer
taxes in the case that the new Security is to be registered in a name different
than that in which the old Security was issued, a new Security or Securities of
authorized denominations in principal amount equal to the unexchanged portion of
such Security.
SECTION 11.03. FRACTIONAL INTERESTS.
No fractional Vencor Common Shares or fractional interest in other
securities or property shall be delivered upon exchange of Securities. If more
than one Security shall be surrendered for exchange at one time by the same
Holder, the number of full shares or whole interests in other securities or
property which shall be delivered upon exchange shall be computed on the basis
of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted hereby) so surrendered. Instead of any
fractional Vencor Common Share (or other fractional interest) which would
otherwise be deliverable upon exchange of any Security or Securities (or
specified portions thereof), the Escrow Agent on behalf of the Company shall pay
a cash adjustment in respect of such fractional interest in an amount equal to
the same fraction of the Market Price per share of the Vencor Common Stock (or
the same fraction of the Market Price of a whole interest in the other
securities or property) on the Business Day next preceding the date of exchange.
The Escrow Agent shall obtain the funds for payment of such fractional interests
by, at the direction of the Company, (i) the sale of Vencor Common Shares held
by it, to the extent that after such sale the number of Vencor Common Shares
remaining on deposit with the Escrow Agent shall be sufficient to allow the
exchange of all outstanding Securities for Vencor Common Shares on the basis of
the then applicable Exchange Rate, (ii) the sale of whole interests in the other
securities or property held by it, to the extent that after such sale the number
of whole interests in the other securities
54
or property remaining on deposit with the Escrow Agent shall be sufficient to
allow the exchange of all outstanding Securities on the basis of the then
applicable Exchange Rate or (iii) sufficient cash contributions from the
Company. The Company agrees to furnish any additional moneys required to permit
such payment.
SECTION 11.04. ADJUSTMENT OF EXCHANGE RATE.
The Exchange Rate shall be subject to adjustment as follows:
(a) In the event Vencor shall, (i) pay a dividend on the Vencor
Common Stock in Vencor Common Stock, (ii) subdivide outstanding shares of
Vencor Common Stock into a greater number of shares of Vencor Common
Stock, (iii) combine outstanding shares of Vencor Common Stock into a
smaller number of shares of Vencor Common Stock, or (iv) issue, by
reclassification of Vencor Common Stock, any shares of its common stock
(which in any such case shall apply to the Vencor Common Shares held by
the Escrow Agent under the Escrow Agreement), the Exchange Rate in effect
immediately prior thereto shall be proportionately adjusted so that the
Holder of any Securities thereafter surrendered for exchange shall be
entitled (subject to Section 11.13 hereof) to receive the number and kind
of shares of Vencor Common Stock (in addition to any cash or other
property apportioned thereto) which he would have owned or have been
entitled to receive after the happening of any of the events described
above had such Securities been exchanged immediately prior to the record
date (or if there is no record date, the effective date) of such event.
Such adjustments shall be made whenever any of the events listed above
shall occur and shall become effective as of immediately after the close
of business on the record date in the case of a stock dividend and shall
become effective as of immediately after the close of business on the
effective date in the case of a subdivision or combination or
reclassification. Any Holder surrendering any Securities after such
record date or such effective date, as the case may be, shall be entitled
to receive Vencor Common Shares at the Exchange Rate as so adjusted
pursuant to this Section 11.04(a), in addition to any cash or other
property apportioned thereto.
(b) Notwithstanding the foregoing provisions, no adjustment in the
Exchange Rate shall be required unless such adjustment would require an
increase or decrease in such Exchange Rate of more than 1%; provided that
any adjustments which by reason of this paragraph (b) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment.
(c) All calculations under this Section 11.04 shall be made to the
nearest one-ten-thousandth (.0001) of a share.
55
(d) Whenever the Exchange Rate is adjusted as herein provided, the
Company shall determine the adjusted Exchange Rate in accordance with this
Section 11.04 and shall prepare a certificate setting forth such adjusted
Exchange Rate and any cash and other property apportioned to the Vencor
Common Shares and showing in detail the facts upon which such adjustments
are based, and such certificate shall forthwith be filed with the Trustee
and the Escrow Agent and a notice stating the Exchange Rate has been
adjusted and setting forth the adjusted Exchange Rate and any cash and
other property apportioned to the Vencor Common Shares shall as soon as
practicable be mailed by or on behalf of the Company to the Holders at
their last addresses as they shall appear upon the Security register
maintained pursuant to Section 2.05.
SECTION 11.05. ESCROW AGREEMENT.
(a) Simultaneously with the execution and delivery of this
Indenture the Company is entering into the Escrow Agreement with The Bank
of New York, as Escrow Agent, pursuant to which it is depositing with the
Escrow Agent 8,301,067 Vencor Common Shares. The Escrow Agent shall be
the exchange agent for the exchange of Securities for the Vencor Common
Shares (or such other securities or property or cash as shall be added to
such Vencor Common Shares or as such Vencor Common Shares shall have been
changed into as provided in this Article 11) as the Holders of all
outstanding Securities shall from time to time be entitled to receive
pursuant to this Article 11 upon exchange thereof. The Company may, at
any time and from time to time in its sole discretion, sell or transfer
all or any part of its right, title and interest in the Vencor Common
Shares to any wholly-owned subsidiary of the Company or any partnership
all of the general partners and limited partners of which are wholly-owned
subsidiaries of the Company (any of the foregoing are hereinafter referred
to as a "Permitted Transferee"); provided that: (1) such Vencor Common
Shares sold or transferred shall remain subject to the terms and
conditions of the Escrow Agreement and the Indenture; (2) any such
Permitted Transferee must expressly agree in writing to become bound by
the terms and conditions of the Escrow Agreement, as such Escrow
Agreement, may be amended from time to time, as though such Permitted
Transferee were a party thereto; (3) the Company shall notify the Escrow
Agent in writing at the time of any such sale or transfer as to the number
of Vencor Common Shares so sold or transferred to such Permitted
Transferee; and (4) such sale or transfer shall be in compliance with
federal and all applicable state and foreign securities laws.
Notwithstanding any such sale or transfer, except as otherwise provided in
the Escrow Agreement, the Company shall remain liable to perform all of
its duties and obligations hereunder and under the Escrow Agreement.
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(b) The Company and any Permitted Transferee, shall each be
entitled (based upon their respective ownership of Vencor Common Shares)
to all (i) cash dividends paid on the Vencor Common Shares held by the
Escrow Agent other than dividends paid pursuant to a plan of liquidation,
partial liquidation, recapitalization, restructuring or other
extraordinary cash dividends and (ii) interest payments on any debt
securities held for exchange by the Escrow Agent which are issued in
exchange for or with respect to Vencor Common Shares held by the Escrow
Agent, including pursuant to any merger or consolidation of Vencor or in
connection with the sale of all or substantially all of the assets of
Vencor. The Escrow Agent shall retain and apply as hereinafter provided
all other dividends paid on the securities held by the Escrow Agent under
the Escrow Agreement.
(c) If any distribution of cash, securities, or other property is
made on Vencor Common Shares held by the Escrow Agent under the Escrow
Agreement (other than (i) cash dividends payable on the Vencor Common
Shares to which the Company or any Permitted Transferee is entitled and
interest paid on debt securities, as specified in paragraph (b) above,
(ii) dividends, subdivisions, combinations and reclassifications for which
an adjustment in the Exchange Rate is made pursuant to Section 11.04 and
(iii) securities or other property received in a transaction to which
Section 11.10 applies) or if transferable subscription rights, options,
warrants or other similar rights are granted to the Company, any Permitted
Transferee (with respect to any securities or property held by the Escrow
Agent) or the Escrow Agent, as the holder thereof, in respect of the
Vencor Common Shares or other property held for exchange by the Escrow
Agent, the Company will cause to be deposited with the Escrow Agent any
such securities, other property, cash and rights that it or any Permitted
Transferee receives and the Escrow Agent shall, as soon as reasonably
practicable after its receipt of any such securities, other property, cash
or rights, notify the Company and any affected Permitted Transferee of
such receipt. The Company shall cause the Escrow Agent, to the extent
such rights, options, warrants, securities or other property are
transferable, to sell all such options, warrants, securities or other
property and rights for cash. Any net cash proceeds therefrom shall be
apportioned equally among the Vencor Common Shares for which outstanding
Securities are exchangeable as of immediately after the close of business
on the record date for the distribution or grant to which this paragraph
(c) applies, or if there is no such record date, the effective date of
such distribution or grant. Any Holder surrendering any Securities after
such record date, or such effective date, as the case may be, and prior to
the distribution date shall be entitled to receive, in addition to the
Vencor Common Shares for which such Securities are exchangeable (and any
cash or property theretofore apportioned to such shares hereunder), the
amount of cash so apportioned to such Vencor Common
57
Shares. Whenever a transaction occurs to which this paragraph (c)
applies, the Company shall determine the Exchange Rate (calculated to the
nearest .0001 of a share) and the cash and other property apportioned to
the Vencor Common Shares as adjusted in accordance with this paragraph (c)
and shall prepare an Officer's Certificate setting forth the Exchange Rate
and the cash and other property apportioned to the Vencor Common Shares
held by the Escrow Agent under the Escrow Agreement as so adjusted and
showing in detail the facts upon which such calculation is based, and such
certificate shall forthwith be filed with the Trustee and Escrow Agent and
a notice stating that a transaction to which this paragraph (c) applies
has occurred and setting forth the Exchange Rate and the cash and other
property apportioned to the Vencor Common Shares, in accordance with this
Section 11.5, shall as soon as practicable be mailed by or on behalf of
the Company to the Holders at their last addresses as they shall appear
upon the Security register maintained pursuant to Section 2.05.
(d) If, at any time any Securities are outstanding, any
distribution or grant is made to holders of any Vencor Common Shares held
or required to be held by the Escrow Agent under the Escrow Agreement, of
any nontransferable subscription rights, options, warrants or other
similar nontransferable rights, securities or property, the Company shall
elect to do any of the following: (i) to the extent permissible by the
terms of said subscription rights, options, warrants or other similar
nontransferable rights, securities or property, cause such rights,
securities or property to be distributed pro rata by the Escrow Agent to
the Holders pro rata based on the principal amount of the Securities held
by such Holders of record of Securities shown on the Security register as
of immediately after the close of business on the record date (or if there
is no record date, the close of business on the effective date), for such
distribution or grant, but subject to the provisions of Section 11.7
hereof, (ii) provide to the Escrow Agent the necessary funds and direct
the Escrow Agent to exercise such options, warrants, or rights and to hold
the securities or other property received upon such exercise for the
benefit of Holders of Securities or (iii) direct the Escrow Agent to
retain such options, warrants, or rights and to hold the securities or
property for delivery to the Holders of Securities upon the exchange of
such Securities. Any options, warrants, rights, securities or property
retained pursuant to clause (iii) above and any securities or other
property received by the Escrow Agent pursuant to clause (ii) above less
any cash, property or securities as determined pursuant to the last three
sentences of this paragraph (d) delivered to or sold or segregated for the
benefit of the Company or any Permitted Transferee, shall be apportioned
equally among the Vencor Common Shares for which outstanding Securities
are exchangeable as of immediately after the close of business on the
record date for the distribution or grant to which this paragraph (d)
applies or, if there is
58
no such record date, the effective date of such distribution or grant.
Any Holder exchanging any Securities after such record date, or such
effective date, as the case may be, shall be entitled to receive the
Vencor Common Shares for which such Securities are exchangeable and the
amount of cash, or any such options, warrants, rights, securities or
property, so apportioned to such Vencor Common Shares, but subject to the
provisions of the last three sentences of this paragraph and Section 11.7
hereof. Notwithstanding the foregoing, any such options, warrants or
rights which may expire prior to the final maturity date of the
Securities, may not be retained pursuant to clause (iii) of this paragraph
(d) beyond the expiration date thereof, but must be distributed or
exercised pursuant to clause (i) or (ii) of this paragraph (d). The
Company shall be promptly repaid any amounts supplied by it pursuant to
the foregoing clause (ii) of this paragraph (d). If the Company is
entitled to any amount because it provided funds to pay for an exercise
pursuant to clause (ii) of this paragraph (d), it shall receive such
amount in cash held by the Escrow Agent, but if the amount of such cash
held by the Escrow Agent shall be less than the amount due the Company,
the Escrow Agent shall (i) as soon as reasonably practicable and to the
extent legally permissible, sell in accordance with written instructions
received from the Company such number of Vencor Common Shares or other
property or securities held or required to be held by the Escrow Agent, as
may be necessary to realize an amount of proceeds which, after payment of
any taxes by the Company and the Escrow Agent on such sale (which shall be
evidenced by an Opinion of Counsel and Officer's Certificate in the manner
specified in Section 11.7 hereof), shall equal the amount of any such
insufficiency, or (ii) if in the opinion of the Company such sale is not
advisable or legally permissible, segregate for the benefit of the Company
or deliver to the Company an amount of property or securities, held or
required to be held by the Escrow Agent, having a Market Price, as
determined by an Officer's Certificate, equal to the amount of such
insufficiency. Following such sale, segregation or delivery, the Vencor
Common Shares, cash and other property or securities, held by the Escrow
Agent shall be proportionately adjusted as of immediately after the close
of business on the record date for the distribution or grant to which this
paragraph (d) applies or, if there is no record date, the effective date
of such distribution or grant.
(e) The Company shall be entitled to any net income or gain
resulting from investments of cash made by the Escrow Agent pursuant to
Section 6 of the Escrow Agreement, in accordance with the provisions
thereof, and the Company shall reimburse or cause the reimbursement of the
Escrow Agent for any losses realized in respect of such investments.
59
(f) The Company and any Permitted Transferee shall each have the
full and unqualified right and power to exercise any rights to vote, or to
give consents to take any other action in respect of, its respective share
of the Vencor Common Shares or any other security held in escrow under the
Escrow Agreement at any time, and the Escrow Agent shall have no duty to
exercise any such rights.
(g) The Company (or any applicable Permitted Transferee) shall be
entitled, out of the property held by the Escrow Agent, to such number of
Vencor Common Shares and such amount of any cash (investments contemplated
by this Section 11.05 being deemed for these purposes to be cash and to be
valued at their outstanding principal balance) and other property as shall
be in excess of the number of Vencor Common Shares and the amount of cash
and other property apportioned thereto, all held by the Escrow Agent,
which would be deliverable upon the exchange of all Securities then
outstanding, and such excess shall be held by the Escrow Agent for the
account of the Company and, subject to the limitations contained in the
Escrow Agreement, released to the Company (or to any applicable Permitted
Transferee) upon demand of the Company. With respect to releases of cash,
the Escrow Agent shall release cash or such of the investment securities
so held as the Company may designate.
(h) Upon expiration of the right to surrender Securities for
exchange and when all other obligations of the Company and any Permitted
Transferee shall have been satisfied under the Escrow Agreement, all cash
and investments and other property held by the Escrow Agent under the
Escrow Agreement which are not required with respect to Securities
previously surrendered for exchange will, subject to the limitations
contained in the Escrow Agreement, be delivered by the Escrow Agent to the
Company and any Permitted Transferee based upon their respective shares of
the Vencor Common Shares.
SECTION 11.06. NOTICE OF CERTAIN EVENTS.
In case at any time:
(a) Vencor shall declare a dividend (or any other distribution) on
Vencor Common Stock; or
(b) Vencor shall authorize the granting of subscription rights,
options, warrants or other similar rights to holders of Vencor Common
Stock; or
(c) there shall occur any reclassification of Vencor Common Stock
(other than a subdivision or combination of outstanding shares of
60
Vencor Common Stock) or any consolidation or merger to which Vencor is a
party and for which approval of any stockholders of Vencor is required, or
the sale or transfer of all or substantially all of the assets of Vencor;
or
(d) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Vencor; then the Company shall cause to be
filed at the office or agency maintained for the purpose of exchange of
Securities pursuant to Section 2.03, and shall cause to be mailed to the
Holders of Securities at their last addresses as they shall appear upon
the Security register, as promptly as practicable after receipt of notice
by the Company of any record date or other applicable date hereinafter
specified a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, or grant of rights, or, if
a record is not to be taken, the date as of which the holders of Vencor
Common Stock of record to be entitled to such dividend, distribution or
grant of rights is to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as
of which it is expected that holders of Vencor Common Stock shall be
entitled to exchange their Vencor Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up.
SECTION 11.07. TRANSFER TAXES.
The Company will pay any and all documentary, stamp, transfer or
similar taxes that may be payable in respect of the transfer and delivery of
Vencor Common Shares (or such other securities or property as shall be added to
such Vencor Common Shares or as such Vencor Common Shares shall have been
changed into as provided in this Article 11) pursuant hereto; provided that the
Company shall not be required to pay any such tax which may be payable in
respect of any transfer involved in the delivery of Vencor Common Shares (or
such other securities or property as shall be added to such Vencor Common Shares
or as such Vencor Common Shares shall have been changed into as provided in this
Article 11) in a name other than that in which the Securities so exchanged were
registered and no such transfer or delivery shall be made unless and until the
person requesting such transfer has paid to the Company the amount of any such
tax, or has established, to the satisfaction of the Company, that such tax has
been paid; and, provided further, that the Company shall not be obligated to pay
any withholding taxes payable by Securityholders due to the exchange of any
Securities.
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SECTION 11.08. SHARES FREE AND CLEAR.
The Company hereby warrants that, upon exchange of a Security
pursuant to this Indenture, the Holder thereof shall receive legal and valid
title to the Vencor Common Shares and any cash and other property apportioned
thereto for which such Security is at such time exchangeable pursuant to this
Indenture free and clear of any and all Liens. Except as provided in Section
11.07, the Company will discharge all Liens and pay all charges with respect to
the delivery of Vencor Common Shares (or such other securities or property as
shall be added to such Vencor Common Shares or as such Vencor Common Shares
shall have changed into as provided in this Article 11).
SECTION 11.09. CANCELLATION OF SECURITIES.
All Securities delivered for exchange shall be delivered by the
Escrow Agent to the Trustee for cancellation and the Trustee shall dispose of
the same as provided in Section 2.11.
SECTION 11.10. CONSOLIDATION, ETC., OF VENCOR.
(a) In the case of any consolidation or merger of Vencor with or
into any other corporation or of any sale or transfer of all or
substantially all of the assets of Vencor or of any voluntary or
involuntary dissolution, liquidation or winding up of Vencor, the Company
shall execute and deliver to the Trustee a supplemental indenture
satisfactory in form to the Trustee, and to the Escrow Agent a
supplemental escrow agreement satisfactory in form to the Escrow Agent,
providing that the holder of each Security then outstanding shall have the
right thereafter to exchange such Security for (i) the kind and amount of
securities and other property receivable upon such consolidation, merger,
sale, transfer, dissolution, liquidation or winding up by a holder of the
number of Vencor Common Shares for which such Security was exchangeable
immediately prior to such consolidation, merger, sale, transfer,
dissolution, liquidation or winding up had such holder of Vencor Common
Shares failed to exercise any rights of election as to the kind or amount
of securities or other property receivable upon such consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, and (ii)
the kind and amount of securities (other than Vencor Common Shares) and
other property or cash apportioned to the Vencor Common Shares for which
such Security was exchangeable immediately prior to such consolidation,
merger, sale, transfer, dissolution, liquidation or winding up. Such
supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article 11.
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(b) The provisions of this Section 11.10 shall similarly apply to
any successive consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
SECTION 11.11. CERTAIN TENDER OR EXCHANGE OFFERS FOR VENCOR COMMON STOCK.
In the event that a tender offer or exchange offer for the Vencor
Common Stock (or such other securities as shall be added to such Vencor Common
Shares or as such Vencor Common Shares shall have been changed into as provided
in this Article 11) is commenced by any person (including the issuer of such
security) after the date on which the Securities may be redeemed at the option
of the Company pursuant to Section 10.07, the Company has the right to redeem,
in each case, in accordance with this Section 11.11 at the optional redemption
prices set forth in the form of Security hereinabove recited, together with
accrued interest to the date fixed for redemption, all or any part of the
Securities so long as (i) the Trustee shall have received notice of such
redemption from the Company not later than two days after the date of
commencement of such tender or exchange offer; provided that if the second such
day is not a Business Day, the Trustee shall have received such notice not later
than the next succeeding Business Day, (ii) any notice of redemption
(substantially in the form of Exhibit A attached hereto) shall be mailed to the
Holders of Securities called for redemption not later than ten days after the
date of commencement of such tender or exchange offer as determined by Company
and (iii) such tender or exchange offer shall not have been terminated by the
date that such notice is mailed. If notice of redemption is given in accordance
with the preceding sentence, the Company shall thereafter have the right to
instruct the Escrow Agent to tender, for its own account or for the account of a
Permitted Transferee, Vencor Common Shares (or such other securities, as
aforesaid) pursuant to such tender or exchange offer, provided the number of
Vencor Common Shares (or such other securities, as aforesaid) so tendered does
not include the number of such Vencor Common Shares (or such other securities,
as aforesaid) which would be deliverable upon exchange of the aggregate
principal amount of the outstanding Securities after giving effect to such
redemption in accordance with this Section 11.11. In addition to the
information called for by Section 10.03, any notice of redemption given pursuant
to this Section 11.11 shall state whether or not the Company by the date of such
notice has decided to cause Vencor Common Shares (or such other securities, as
aforesaid) held in escrow to be tendered pursuant to such tender or exchange
offer and, if tendered, that such Vencor Common Shares (or such other
securities, as aforesaid) may be sold, to the extent purchased, to the offeror
in accordance with such tender or exchange offer except to the extent that the
Holders of Securities called for redemption duly surrender their Securities to
the Escrow Agent in exchange for Vencor Common Shares (or such other securities,
as aforesaid) by not later than the close of business on the last Business Day
preceding the fifteenth day (which date shall be specified) after the date such
notice is mailed or to the extent that
63
the Company otherwise determines to withdraw the shares so tendered. The
Company shall cause to be withdrawn from the tender or exchange offer, or
otherwise to be delivered to the Escrow Agent, a number of Vencor Common Shares
(or such other securities, as aforesaid) at least equal to the number of Vencor
Common Shares (or such other securities, as aforesaid) deliverable in exchange
for Securities which are called for redemption pursuant to this Section 11.11
and are duly surrendered for exchange for Vencor Common Shares (or such other
securities, as aforesaid) by not later than the close of business on such last
Business Day preceding the fifteenth day in order to permit such Securities so
to be exchanged. The proceeds of the sale of Vencor Common Shares (or such
other securities, as aforesaid) sold pursuant to the tender or exchange offer
and any shares tendered which are returned to the Company or the Escrow Agent
following the expiration or termination of such tender or exchange offer, or
which are withdrawn, which are no longer deliverable in exchange for Securities
called for redemption pursuant to this Section 11.11, shall be the property of
the Company and not subject to the Escrow Agreement.
SECTION 11.12. OBLIGATIONS OF TRUSTEE AND ESCROW AGENT.
Subject to the provisions of Section 6.01, neither the Trustee nor
the Escrow Agent shall at any time be under any duty or responsibility to any
Holder of Securities to determine whether any facts exist which may require any
adjustment of the Exchange Rate, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed herein, or in
any supplemental indenture, in making the same. Neither the Trustee nor the
Escrow Agent shall be accountable with respect to the validity or value (or the
kind or amount) of any Vencor Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the exchange of any Security;
and neither the Trustee nor the Escrow Agent makes any representation with
respect thereto. Neither the Trustee nor the Escrow Agent shall be responsible
for any failure of the Company to transfer or deliver any Vencor Common Shares
or stock certificates or other securities or property to the Escrow Agent as
provided herein or, subject to the provisions of Section 6.01 and the express
obligations assumed under the Escrow Agreement, to comply with any of the
covenants of the Company contained in this Article 11.
SECTION 11.13. CASH EQUIVALENT.
Notwithstanding any other provisions in this Article 11, in lieu of
delivering certificates representing Vencor Common Shares in exchange for
Securities surrendered in accordance with Section 11.02, the Escrow Agent shall,
if so directed by the Company, pay to the Holder surrendering such Securities an
amount in cash equal to the value of Vencor Common Shares for which such
Securities are exchangeable (based on the Market Price on the date of receipt by
the Escrow Agent of the notice of exchange delivered by such
64
Holder pursuant to Section 11.02), plus any cash and other property theretofore
apportioned to such Vencor Common Shares in accordance with Section 11.05. Prior
to so directing the Escrow Agent to make any such cash payment, the Company
shall deposit with the Escrow Agent the cash so payable.
SECTION 11.14. REGISTRATION OF VENCOR COMMON SHARES.
The Company hereby covenants that at any time that a Holder of
Securities exchanges such Securities for certificates representing Vencor Common
Shares and an effective registration statement of Vencor filed with the
Commission (or related qualification under state blue sky or securities law)
would be required in order for the Escrow Agent to deliver such Vencor Common
Shares in the United States or to a United States Person, the Company will use
its reasonable best efforts to ensure that an effective registration statement
of Vencor is on file with the Commission covering the delivery of such Vencor
Common Shares and any qualification under state blue sky or securities laws
required for such delivery is maintained. If such registration statement is not
effective or such qualification is not maintained, the Company shall direct the
Escrow Agent to pay such Holder cash, in lieu of delivering such Vencor Common
Shares in accordance with the provisions of Section 11.13.
ARTICLE 12
SUBORDINATION
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Security is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior and Senior Subordinated Debt (whether outstanding
on the date hereof or hereafter created, incurred, assumed or Guaranteed), and
that the subordination is for the benefit of the holders of Senior and Senior
Subordinated Debt.
SECTION 12.02. CERTAIN DEFINITIONS.
"Designated Senior and Senior Subordinated Debt" means (i) so long
as any Obligations are outstanding under the Credit Facility, such Obligations
and (ii) thereafter, any other Senior and Senior Subordinated Debt permitted
hereunder the principal amount of which is $100.0 million or more and that has
been designated by the Company as "Designated Senior and Senior Subordinated
Debt".
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"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior and Senior Subordinated Debt.
"Senior and Senior Subordinated Debt" means any Indebtedness of the
Company unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Securities and all Obligations with respect to any of the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
and Senior Subordinated Debt will not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company, (x) any Indebtedness
of the Company to any of its Subsidiaries or other Affiliates or (y) any trade
payables .
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
SECTION 12.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, holders of Senior and Senior Subordinated Debt will be
entitled to receive payment in full of all Obligations due in respect of such
Senior and Senior Subordinated Debt (including interest accruing after the
commencement of any such proceeding at the rate specified in the applicable
Senior and Senior Subordinated Debt, whether or not allowed or allowable as a
claim in such proceeding) before the Holders will be entitled to receive any
payment with respect to the Securities and until all Obligations with respect to
Senior and Senior Subordinated Debt are paid in full, any distribution to which
the Holders would be entitled shall be made to the holders of Senior and Senior
Subordinated Debt (except that Holders may receive securities that (i) are
subordinated to at least the same extent as the Securities to Senior and Senior
Subordinated Debt and any securities issued in exchange for Senior and Senior
Subordinated Debt, (ii) are unsecured (except to the extent the Securities are
secured), (iii) are not Guaranteed by any Subsidiary of the Company (except to
the extent the Securities are so Guaranteed), and (iv) have a Weighted Average
Life to Maturity and final maturity that are not shorter than the Weighted
Average Life to Maturity of the Securities or any securities issued to Holders
of Senior and Senior Subordinated Debt under the Credit Facility pursuant to a
plan of reorganization or readjustment.
SECTION 12.04. DEFAULT ON DESIGNATED SENIOR AND SENIOR SUBORDINATED DEBT.
66
The Company may not make any payment upon or in respect of the
Securities (except in securities that are subordinated to at least the same
extent as the Securities to Senior and Senior Subordinated Debt and any
securities issued in exchange for Senior and Senior Subordinated Debt if:
(i) a default in the payment of the principal of, premium, if any
or interest on Designated Senior and Senior Subordinated Debt occurs and
is continuing beyond any applicable period of grace in the agreement,
indenture or other document governing such Designated Senior and Senior
Subordinated Debt; or
(ii) any other default occurs and is continuing with respect to
Designated Senior and Senior Subordinated Debt that permits holders of the
Designated Senior and Senior Subordinated Debt as to which such default
relates to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice"), for so long as any Obligations
are outstanding under the Credit Facility, from the Representative
thereunder and, thereafter, from the holders or Representative of any
Designated Senior and Senior Subordinated Debt. If the Trustee receives
any such notice, a subsequent notice received within 360 days thereafter
shall not be effective for purposes of this Section 12.04. No nonpayment
default that existed or was continuing on the date of delivery of any such
notice to the Trustee shall be, or be made, the basis for a subsequent
notice.
The Company may and shall resume payments on the Securities:
(1) in the case of a payment default, upon the date which the
default is cured or waived, and
(2) in the case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received, unless
the maturity of any Designated Senior and Senior Subordinated Debt has
been accelerated.
SECTION 12.05. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior and Senior
Subordinated Debt of the acceleration.
SECTION 12.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Securities at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment
67
is prohibited by Section 12.04 hereof, such payment shall be held by the Trustee
or such Securityholder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior and Senior
Subordinated Debt as their interests may appear or their Representative under
the indenture or other agreement (if any) pursuant to which such Senior and
Senior Subordinated Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
and Senior Subordinated Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior and
Senior Subordinated Debt.
With respect to the holders of Senior and Senior Subordinated Debt,
the Trustee undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 12, and no implied
covenants or obligations with respect to the holders of Senior and Senior
Subordinated Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
and Senior Subordinated Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior and Senior
Subordinated Debt shall be entitled by virtue of this Article 12, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 12.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any Obligations
with respect to the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior and
Senior Subordinated Debt as provided in this Article.
SECTION 12.08. SUBROGATION.
After all Senior and Senior Subordinated Debt is paid in full and
until the Securities are paid in full, Holders shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Securities) to the
rights of holders of Senior and Senior Subordinated Debt to receive
distributions applicable to Senior and Senior Subordinated Debt to the extent
that distributions otherwise payable to the holders have been applied to the
payment of Senior and Senior Subordinated Debt. A distribution made under this
Article to holders of Senior and Senior Subordinated Debt that otherwise would
have been made to Holders is not, as between the Company and Holders, a payment
by the Company on the Securities.
SECTION 12.09. RELATIVE RIGHTS.
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This Article defines the relative rights of Holders and holders of
Senior and Senior Subordinated Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior and
Senior Subordinated Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior and Senior Subordinated Debt to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
SECTION 12.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior and Senior Subordinated Debt to
enforce the subordination of the Indebtedness evidenced by the Securities shall
be impaired by any act or failure to act by the Company or any Holder or by the
failure of the Company or any Holder to comply with this Indenture.
SECTION 12.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior and Senior Subordinated Debt, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 12, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or 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 and Senior Subordinated Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 12.
69
SECTION 12.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless the Trustee shall have received at
its Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Securities to violate this Article 12. Only the Company or
a Representative may give the notice. Nothing in this Article 12 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 6.07
hereof.
The Trustee in its individual or any other capacity may hold Senior
and Senior Subordinated Debt with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 12.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Security by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 12, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes.
SECTION 12.14. AMENDMENTS.
The provisions of this Article 12 shall not be amended or modified
without the written consent of the holders of all Senior and Senior Subordinated
Debt.
70
SIGNATURES
Dated as of _______________ XXXXX HEALTHCARE CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
___________________________ (SEAL)
Dated as of _______________ THE BANK OF NEW YORK, as
Trustee
By:
----------------------------------
Name:
Title:
Attest:
___________________________ (SEAL)
71
EXHIBIT A
(Face of Security)
___% Exchangeable Subordinated Note
due __________, 2007
CUSIP:
No. $____________
XXXXX HEALTHCARE CORPORATION
promises to pay to
_________________________________________________________________________
or its registered assigns, the principal sum of ________________________________
Dollars on __________, 2007.
Interest Payment Dates: _______ and __________, commencing __________, 1996
Record Dates: ______ and __________ (whether or not a Business Day).
XXXXX HEALTHCARE CORPORATION
By: _________________________
Dated: __________, 1995
(SEAL)
Trustee's Certificate of Authentication:
This is one of the Securities referred
to in the within-mentioned Indenture:
The Bank of New York, as Trustee
By: ___________________________
Authorized Signatory
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(Back of Security)
____% EXCHANGEABLE SUBORDINATED NOTE
due __________, 2007
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Xxxxx Healthcare Corporation, a Nevada corporation
(the "COMPANY"), promises to pay interest on the principal amount of this
Security at the rate and in the manner specified below.
The Company shall pay interest in cash on the principal amount of
this Security at the rate per annum of ____%. The Company shall pay interest
semiannually in arrears on _______ and __________ of each year, commencing
__________, 1996 to Holders of record on the immediately preceding _______ and
__________, respectively, or if any such date of payment is not a Business Day
on the next succeeding Business Day (each an "INTEREST PAYMENT DATE").
Interest shall be computed on the basis of a 360-day year comprised
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
the original issuance of the Securities. To the extent lawful, the Company
shall pay interest on overdue principal at the rate of 1% per annum in excess of
the interest rate then applicable to the Securities; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are cancelled after such record
date and on or before such Interest Payment Date. The Holder hereof must
surrender this Security to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Principal, premium, if any, and interest shall be payable at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, payment of interest may be made by
check mailed to the Holder's registered address. Notwithstanding the foregoing,
all payments with respect to Securities the Holders of which have given wire
transfer instructions, on or before the relevant record date, to the Paying
Agent shall be made by wire transfer of immediately available funds to the
accounts specified by such Holders.
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3. PAYING AGENT AND REGISTRAR. Initially, the Trustee shall act
as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar or co-registrar without prior notice to any Holder. The Company and
any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of __________, 1995 (the "INDENTURE"), between the Company
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA") as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Holders are referred to the Indenture and such act for a
statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Securities. The Securities are
unsecured general obligations of the Company. The Securities are limited to
$___________ in aggregate principal amount.
5. OPTIONAL REDEMPTION. On or after ___________, 1997, the
Company may redeem all or any portion of the Securities at a redemption price
(expressed as a percentage of the principal amount thereof), as set forth in the
immediately succeeding paragraph, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of the 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); provided, however, that the Securities are redeemable
prior to _______________, 1998 only if, for a period of twenty consecutive
trading days, the last reported sale price for Vencor Common Shares shall have
exceed 150% of the Market Price then in effect.
The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the 12-month period
beginning ______________ of the following years:
YEAR PERCENTAGE
---- ----------
1997....................... _____%
1998....................... _____%
1999....................... _____%
2000....................... _____%
2001....................... _____%
2002 and thereafter........ _____%
6. MANDATORY REDEMPTION. Subject to the Company's obligation to
make an offer to repurchase Securities under certain circumstances pursuant to
Section 3.07 of the Indenture (as described in paragraph 6 below), the Company
shall have no mandatory redemption or sinking fund obligations with respect to
the Securities.
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7. REPURCHASE AT OPTION OF HOLDER. If there is a Change of
Control Triggering Event, the Company shall offer to repurchase on the Change of
Control Payment Date all outstanding Securities at 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon to the Change
of Control Payment Date. Holders that are subject to an offer to purchase shall
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.
8. SUBORDINATION. The Securities are subordinated to Senior and
Subordinated Debt (as defined in the Indenture), which includes any Indebtedness
of the Company that is not expressly pari passu with or subordinated to the
Securities and all Obligations (as defined in the Indenture) of the Company with
respect thereto. To the extent provided in the Indenture, Senior and
Subordinated Debt must be paid, in cash, cash equivalents or otherwise in a
manner satisfactory to the holders of Senior and Subordinated Debt, before the
Securities may be paid. The Company agrees, and each Holder by accepting a
Security consents and agrees, to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
9. NOTICE OF REDEMPTION. Notice of redemption shall be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address. Securities may
be redeemed in pat but only in whole multiples of $1,000, unless all of the
Securities held by a Holder are to be redeemed. On and after the redemption
date, interest ceases to accrue on Securities or portions of them called for
redemption.
10. EXCHANGE RIGHTS. Subject to the provisions of the Indenture,
the holder of this Security has the right, at his option, at any time or from
time to time on or after September 28, 1997 until and including, but not after
the close of business on, the date of final maturity of this Security (except
that, in case this Security or a portion hereof shall be called for redemption
and the Company shall not thereafter default in making due provision for the
payment of the redemption price, such right shall terminate with respect to this
Security or such portion hereof at the close of business on the last business
day preceding the date fixed for redemption or, in case this Security or a
portion hereof shall be called for redemption in accordance with Section 11.11
of the Indenture and the Company shall not thereafter default in making due
provision for the payment of the redemption price, such right shall terminate
with respect to this Security or such portion hereof at the close of business on
the last business day preceding the fifteenth day after the mailing of the
notice of redemption), to exchange the principal of this Security, or any
portion thereof which is $1,000 or a multiple of $1,000, into fully paid and
non-assessable Vencor Common Shares, as said shares shall be constituted at the
date of exchange (or such other securities or property or cash as shall be
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added to such Vencor Common Shares or as such Vencor Common Shares shall have
been changed into as provided in the Indenture), at the Exchange Rate of
____________ Vencor Common Shares (or such other securities, property or cash)
for each $1,000 principal amount of the Securities (the "Exchange Rate") or at
the adjusted Exchange Rate in effect at the date of exchange if an adjustment
has been made, determined as provided in the Indenture, upon surrender of this
Security to the Company at the office or agency of the Company maintained for
the purpose in the Borough of Manhattan, The City of New York, together with a
fully executed notice substantially in the form entitled "Exchange Notice"
appearing below that the holder elects so to exchange this Security (or any
portion hereof which is an integral multiple of $1,000); provided that the
Company may, in lieu of delivering Vencor Common Shares in exchange for this
Security, elect to pay the holder hereof an amount in cash equal to the Market
Price (as of the date of receipt at such office or agency of such notice of
exchange) as defined in the Indenture of such Vencor Common Shares into which
this Security (or any portion hereof which is an integral multiple of $1,000
which the holder elects to exchange) is exchangeable, plus any securities,
property or cash theretofore apportioned to such Vencor Common Shares, subject
to certain conditions as more fully described in the Indenture. Except as
expressly provided in the Indenture, no payment or adjustment shall be made on
account of interest accrued on this Security (or portion thereof) so exchanged
or on account of any dividend or distribution on any such shares of common stock
of Vencor Power Company issued upon exchange. If so required by the Company or
the Trustee, this Security, upon surrender for exchange as aforesaid, shall be
duly endorsed by, or be accompanied by instruments of transfer, in form
satisfactory to the Company, duly executed by, the holder or by his duly
authorized attorney. The Exchange Rate from time to time in effect is subject
to adjustment as provided in the Indenture. No fractional interest in Vencor
Common Shares (or other securities) will be issued on exchange, but an
adjustment in cash will be made for any fractional interest as provided in the
Indenture.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons, and in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee 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 exchange or register
the transfer of any Securities between a record date and the corresponding
Interest Payment Date.
12. PERSONS DEEMED OWNERS. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Company may deem and treat the Person in whose name this Security
is registered as its absolute owner for the purpose of receiving payment of
A-5
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Holder of a Security shall be treated as its owner for all
purposes.
13. AMENDMENT, SUPPLEMENT AND WAIVERS. Except as provided in the
next succeeding paragraphs, the Indenture or the Securities may be amended or
supplemented 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 Securities) and any
existing default or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a tender offer or exchange offer for Securities).
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Security held by a non-consenting Holder of
Securities): (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security, (iii) reduce the rate of or change
the time for payment of interest on any Security, (iv) make any change regarding
the exchange rights set forth in Article 11 of the Indenture other than to
increase the Exchange Rate, (v) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Securities,
(except a rescission of acceleration of the Securities by the Holders of at
least a majority in aggregate principal amount thereof and a waiver of the
payment default that resulted from such acceleration), (vi) make any Security
payable in money other than that stated in the Securities, (vii) make any change
in the provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Securities to receive payments of principal of or premium,
if any, or interest on the Securities or (viii) make any change in the foregoing
amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of
Securities, the Company and the Trustee may amend or supplement the Indenture or
the Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to provide for the assumption of the Company's obligations to Holders of the
Securities in the case of a merger, consolidation or sale of assets, to make any
change that would provide any additional rights or benefits to the Holders of
the Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder, or to comply with requirements of the Securities
and Exchange Commission (the "COMMISSION") in order to effect or maintain the
qualification of the Indenture under the TIA.
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14. DEFAULTS AND REMEDIES. Events of Default under the Indenture
include: (i) a default for 30 days in the payment when due of interest on the
Securities; (ii) a default in payment when due of the principal of or premium,
if any, on the Securities, at maturity or otherwise; (iii) a failure by the
Company to comply with the provisions described under the covenant "Change of
Control;" (iv) a failure by the Company for 60 days after notice to comply with
any of its other agreements in the Indenture or the Securities; (v) any default
that 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 Significant Subsidiaries (or the payment
of which is Guaranteed by the Company or any of its Significant Subsidiaries)
whether such Indebtedness or Guarantee exists on the date of the Indenture, or
is created after the date of the Indenture, which default (a) constitutes a
Payment Default or (b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
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 $25.0 million or more; (vi) failure by the Company or any of its
Significant Subsidiaries to pay a final judgment or final judgments aggregating
in excess of $25.0 million entered by a court or courts or competent
jurisdiction against the Company or any of its Significant Subsidiaries if such
final judgment or judgments remain unpaid or undischarged for a period (during
which execution shall not be effectively stayed) of 60 days after their entry;
(vii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Significant Subsidiaries; and (viii) a failure by the Company to make
any exchange of Vencor Common Shares for any Security in accordance with the
terms of the Indenture. 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 by written notice to the Company and the Trustee, may
declare all the Securities to be due and payable immediately (plus, in the case
of an Event of Default that is the result of willful actions (or inactions) by
or on behalf of the Company intended to avoid prohibitions on redemptions of the
Securities contained in the Indenture or the Securities, an amount of premium
applicable pursuant to the Indenture). 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 shall become due and payable without further action
or notice. Holders of the Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Securities 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 such
Holders' interest.
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The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium on, or the
principal of, the Securities.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
The above description of Events of Default and remedies is qualified
by reference, and subject in its entirety, to the more complete description
thereof contained in the Indenture.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to enter into
certain mergers and consolidations.
16. 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 or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
17. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS. No director, officer, employee, incorporator or shareholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder 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. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
18. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
19. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder 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).
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20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the Securities and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Xxxxx Healthcare Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
A-9
ASSIGNMENT FORM
To assign this Security, fill in the form below: For value received (i)
or (we) hereby sell, assign and transfer this Security to
______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and do hereby irrevocably constitute and appoint _____________________________
Attorney to transfer this Security on the books of the Company with full power
of substitution in the premises.
______________________________________________________________________________
Date: ______________
Your Signature:___________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, check the following box:
/ / Section 3.07
(Change of Control)
If you want to have only part of the Security purchased by the Company
pursuant to Section 3.07 of the Indenture, state the amount you elect to have
purchased:
$ _______________
Date:____________
Your Signature:___________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-11
[FORM OF EXCHANGE NOTICE]
To: XXXXX HEALTHCARE CORPORATION
The undersigned registered owner of this Security hereby: (i)
irrevocably exercises the option to exchange this Security, or the portion
hereof below designated, for shares of common stock ($.25 par value per share)
of Vencor, Inc. or other securities, other property or cash in accordance with
the terms of the Indenture referred to in this Security and (ii) directs that
such shares, other securities, other property or cash deliverable upon the
exchange, together with any check in payment for fractional shares, and any
Security representing any unexchanged principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or other securities are to be delivered registered
in the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Principal Amount to be
Exchanged: (if less than all)
$_______________________________
Dated __________ ________________________________
Signature
Notice: The signature to this Exchange Notice must correspond with the name as
it appears upon the face of the written Security in every particular, without
alteration, or enlargement or any change whatsoever.
Fill in for registration of shares if to be delivered, and of Securities if to
be issued, otherwise than to and in the name of the registered holder.
___________________________
Social Security or Other
Taxpayer Identifying Number
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and Zip Code)
(Please print name and
address)
A-12
