EXHIBIT 4.7
THE HILLHAVEN CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
__________________
INDENTURE
Dated as of September ___, 1993
__________________
$175,000,000
_____% Senior Subordinated Notes due 2001
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of September ___, 1993
Trust Indenture Indenture
Act Section Section
--------------- ---------
(S) 310(a)(1) ........................ 608
(a)(2) ........................ 608
(b) ........................ 607, 609
(S) 312(c) ........................ 702
(S) 314(a) ........................ 704
(a)(4) ........................ 1019
(c)(1) ........................ 103
(c)(2) ........................ 103
(e) ........................ 103
(S) 315(b) ........................ 601
(S) 316(a) (last
sentence) ........................ 101 ("Outstanding")
(a)(1)(A) ........................ 502, 512
(a)(1)(B) ........................ 513
(b) ........................ 508
(c) ........................ 105
(S) 317(a)(1) ........................ 503
(a)(2) ........................ 504
(S) 318(a) ........................ 108
_____________________________________
Security: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
Table of Contents
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.......................................... 1
Accounts Receivable Financing........................ 2
Acquired Indebtedness................................ 2
Affiliate............................................ 2
Asset Sale........................................... 3
Attributable Debt.................................... 3
Average Life to Stated Maturity...................... 3
Bankruptcy Law....................................... 4
Board of Directors................................... 4
Board Resolution..................................... 4
Business Day......................................... 4
Capital Lease Obligation............................. 4
Capital Stock........................................ 4
Cash Equivalent...................................... 4
Change in Control.................................... 5
Code................................................. 5
Commission........................................... 6
Company.............................................. 6
Company Request...................................... 6
Consolidated Income Tax Expense...................... 6
Consolidated Interest Expense........................ 6
Consolidated Net Income (Loss)....................... 6
Consolidated Net Worth............................... 7
Consolidated Rental Payments......................... 7
Consolidation........................................ 8
Corporate Trust Office............................... 8
Default.............................................. 8
Designated Senior Indebtedness....................... 8
Event of Default..................................... 8
Exchange Act......................................... 8
Fair Market Value.................................... 8
Fiscal Year.......................................... 8
Fixed Charge Coverage Ratio.......................... 8
Generally Accepted Accounting
Principles...................................... 9
Guarantee............................................ 9
Guaranteed Debt...................................... 9
Guarantor............................................ 9
Holder............................................... 9
Indebtedness......................................... 9
Indenture............................................ 11
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Indenture Obligations................................ 11
Intercompany Agreement............................... 11
Interest Payment Date................................ 11
Interest Rate Contracts.............................. 11
Investment........................................... 11
Lien................................................. 11
Management Investors................................. 11
Maturity............................................. 12
Net Cash Proceeds.................................... 12
New Bank Credit Agreement............................ 12
NME.................................................. 12
Non-payment Default.................................. 12
Officers' Certificate................................ 13
Opinion of Counsel................................... 13
Outstanding.......................................... 13
Pari Passu Indebtedness.............................. 14
Paying Agent......................................... 14
Payment Default...................................... 14
Permitted Holders.................................... 14
Permitted Indebtedness............................... 14
Permitted Investment................................. 16
Permitted Junior Securities.......................... 16
Person............................................... 16
PIP Debentures....................................... 16
PIP options.......................................... 16
Predecessor Security................................. 16
Preferred stock...................................... 17
Public Equity Offering............................... 17
Qualified Capital Stock.............................. 17
Redeemable Capital Stock............................. 17
Redemption Date...................................... 17
Redemption Price..................................... 17
Regular Record Date.................................. 17
Responsible Officer.................................. 17
Restricted Payment................................... 18
Securities........................................... 18
Securities Act....................................... 18
Security Register.................................... 18
Senior Indebtedness.................................. 18
Senior Representative................................ 18
Series C Preferred Stock............................. 19
Series D Preferred Stock............................. 19
Significant Subsidiary............................... 19
Special Record Date.................................. 19
Stated Maturity...................................... 19
Subordinated Indebtedness............................ 19
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Subsidiary........................................... 19
Temporary Cash Investment............................ 19
Trustee.............................................. 20
Trust Indenture Act.................................. 20
Voting Stock......................................... 20
Warrants............................................. 20
Wholly owned Subsidiary.............................. 20
Section 102. Other Definitions.................................... 21
Section 103. Compliance Certificates and Opinions................. 21
Section 104. Form of Documents Delivered to Trustee............... 22
Section 105. Acts of Holders...................................... 23
Section 106. Notices, etc., to Trustee, the Company
and any Guarantor.................................. 23
Section 107. Notice to Holders; Waiver............................ 24
Section 108. Conflict with Trust Indenture Act.................... 24
Section 109. Effect of Headings and Table of Contents............. 25
Section 110. Successors and Assigns............................... 25
Section 111. Separability Clause.................................. 25
Section 112. Benefits of Indenture................................ 25
Section 113. Governing Law........................................ 25
Section 114. Legal Holidays....................................... 26
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally...................................... 26
Section 202. Form of Face of Security............................. 26
Section 203. Form of Reverse of Security.......................... 28
Section 204. Form of Trustee's Certificate of
Authentication..................................... 32
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms...................................... 32
Section 302. Denominations........................................ 33
Section 303. Execution, Authentication, Delivery
and Dating......................................... 33
Section 304. Temporary Securities................................. 34
Section 305. Registration, Registration of Transfer and
Exchange........................................... 35
Section 306. Xxxxxxxxx, Xxxxxxxxx, Lost and Stolen
Securities......................................... 36
Section 307. Payment of Interest; Interest Rights
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Preserved.......................................... 37
Section 308. Persons Deemed Owners................................ 38
Section 309. Cancellation......................................... 38
Section 310. Computation of Interest.............................. 39
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or
Covenant Defeasance................................ 39
Section 402. Defeasance and Discharge............................. 39
Section 403. Covenant Defeasance.................................. 40
Section 404. Conditions to Defeasance or Covenant Defeasance...... 40
Section 405. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions........................... 43
Section 406. Reinstatement........................................ 43
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.................................... 44
Section 502. Acceleration of Maturity: Rescission
and Annulment...................................... 46
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................. 47
Section 504. Trustee May File Proofs of Claim..................... 48
Section 505. Trustee May Enforce Claims Without
Possession of Securities........................... 49
Section 506. Application of Money Collected....................... 50
Section 507. Limitation on Suits.................................. 50
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.................... 51
Section 509. Restoration of Rights and Remedies................... 51
Section 510. Rights and Remedies Cumulative....................... 51
Section 511. Delay or Omission Not Waiver......................... 52
Section 512. Control by Holders................................... 52
section 513. Waiver of Past Defaults.............................. 52
Section 514. Undertaking for Costs................................ 53
Section 515. Waiver of Stay, Extension or Usury Laws.............. 53
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ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults................................... 54
Section 602. Certain Rights of Trustee............................ 54
Section 603. Trustee Not Responsible for Recitals,
Dispositions of Securities or Application
of Proceeds Thereof................................ 56
Section 604. Trustee and Agents May Hold Securities:
Collections; Etc................................... 56
Section 605. Money Held in Trust.................................. 56
Section 606. Compensation and Indemnification of Trustee
and Its Prior Claim................................ 57
Section 607. Conflicting Interests................................ 57
Section 608. Corporate Trustee Required; Eligibility.............. 57
Section 609. Resignation and Removal; Appointment of
Successor Trustee.................................. 58
Section 610. Acceptance of Appointment by Successor............... 59
Section 611. Merger, Conversion, Amalgamation,
Consolidation or Succession to Business............ 60
Section 612. Preferential Collection of Claims Against
Company............................................ 61
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders............................... 61
Section 702. Disclosure of Names and Addresses of
Holders............................................ 62
Section 703. Reports by Trustee................................... 62
Section 704. Reports by Company................................... 62
ARTICLE EIGHT
CONSOLIDATION, MERGER, AMALGAMATION,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Guarantor May Consolidate,
Amalgamate, etc., Only on Certain Terms............. 63
Section 802. Successor Substitutes................................. 65
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders......................... 66
Section 902. Supplemental Indentures and Agreements
with Consent of Holders............................ 67
Section 903. Execution of Supplemental Indentures and
Agreements......................................... 68
Section 904. Effect of Supplemental Indentures.................... 68
Section 905. Conformity with Trust Indenture Act.................. 69
Section 906. Reference in Securities to Supplemental
Indentures......................................... 69
Section 907. Effect on Senior Indebtedness........................ 69
Section 908. Record Date.......................................... 69
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.......... 70
Section 1002. Maintenance of Office or Agency..................... 70
Section 1003. Money for Security Payments to be Held
in Trust.......................................... 71
Section 1004. Corporate Existence................................. 72
Section 1005. Payment of Taxes and Other Claims................... 72
Section 1006. Maintenance of Properties........................... 73
Section 1007. Insurance........................................... 73
Section 1008. Limitation on Indebtedness.......................... 73
Section 1009. Limitation on Restricted Payments................... 74
Section 1010. Limitation on Preferred Stock of
Subsidiaries...................................... 77
Section 1011. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries............... 78
Section 1012. Limitation on Liens Securing Pari Passu
and Subordinated Indebtedness..................... 79
Section 1013. Provision of Financial Statements................... 79
Section 1014. Limitation on Transactions with Affiliates.......... 80
Section 1015. Disposition of Proceeds of Asset Sales.............. 80
Section 1016. Limitation on Issuance of Guarantees of
Pari Passu and Subordinated Indebtedness.......... 86
Section 1017. Limitation on Other Senior subordinated
Indebtedness...................................... 87
Section 1018. Purchase of Securities upon Change in
Control........................................... 87
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Section 1019. Statement by Officers as to Default.................. 90
Section 1020. Waiver of Certain Covenants.......................... 91
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Right of Redemption.................................. 91
Section 1102. Applicability of Article............................. 92
Section 1103. Election to Redeem; Notice to Trustee................ 92
Section 1104. Selection by Trustee of Securities to
Be Redeemed.......................................... 92
Section 1105. Notice of Redemption................................. 93
Section 1106. Deposit of Redemption Price.......................... 94
Section 1107. Securities Payable on Redemption Date................ 94
Section 1108. Securities Redeemed or Purchased in Part............. 94
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior
Indebtedness....................................... 95
Section 1202. Payment Over of Proceeds Upon Dissolution,
Etc................................................ 95
Section 1203. Suspension of Payment When Senior
Indebtedness in Default............................ 97
Section 1204. Payment Permitted if No Default...................... 98
Section 1205. Subrogation to Rights of Holders of
Senior Indebtedness................................ 98
Section 1206. Provisions Solely to Define Relative
Rights............................................. 99
Section 1207. Trustee to Effectuate Subordination.................. 99
Section 1208. No Waiver of Subordination Provisions................ 100
Section 1209. Notice to Trustee.................................... 101
Section 1210. Reliance on Judicial Order or Certificate
of Liquidating Agent............................... 102
Section 1211. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of
Trustee's Rights................................... 102
Section 1212. Article Applicable to Paying Agents.................. 102
Section 1213. No Suspension of Remedies............................ 103
Section 1214. Trustee's Relation to Senior Indebtedness............ 103
Section 1215. Other Rights of Holders of Senior
Indebtedness....................................... 103
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ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of Indenture.............. 104
Section 1302. Application of Trust Money........................... 105
viii
INDENTURE, dated as of September ___, 1993, between THE HILLHAVEN
CORPORATION, a Nevada corporation (the "Company"), and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts banking corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of $175,000,000
aggregate principal amount of its _____ % Senior Subordinated Notes due 2001
(the "Securities"), of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture;
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act;
All acts and things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company in accordance with the terms of this
Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
Certain terms used principally in Article Four are defined in Article Four.
"Accounts Receivable Financing" means the Company's commercial paper
program established pursuant to the Company's Liquidity Agreement among
Hillhaven Funding Corporation, the banks named therein and Banque Indosuez, New
York Branch, as agent, dated as of July 1, 1990, and as amended to the date of
this Indenture and thereafter, pursuant to which the Company has issued short
term notes backed by certain of the Company's Medicaid accounts receivable.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person or the
date the acquired Person becomes a Subsidiary.
"Affiliate" means with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's Capital
Stock, (iii) any officer or director of (A) any such specified Person, (B) any
Subsidiary of such specified Person or (C) any Person described in clause (i) or
(ii) above or (iv) the spouse of any natural Person described in clause (i),
(ii) or (iii) above or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such spouse. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of
2
such Person directly or indirectly, whether through ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction) (collectively, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (i) any Capital Stock
of any Subsidiary; (ii) all or substantially all of the properties and assets of
any division or line of business of the Company or its Subsidiaries; or (iii)
any other properties or assets of the Company or any Subsidiary, other than in
the ordinary course of business, provided that for the purposes of this
definition only, the disposition of any nursing facilities shall not be
considered to be in the ordinary course of business. For the purposes of this
definition, the term "Asset Sale" shall not include (i) any transfer of
properties and assets that is governed by the provisions described under Article
Eight, or (ii) any transfer of properties or assets of the Company to any
Wholly Owned Subsidiary, or of any Subsidiary to the Company or any Wholly
Owned Subsidiary in accordance with the terms of this Indenture or (iii) the
transfer, directly or indirectly, in one transaction or a series of related
transactions, of property or assets with a Fair Market Value (as determined by
the Board of Directors of the Company, whose determination shall be evidenced by
a Board Resolution) not in excess of $1,000,000 in any 12-month period.
"Attributable Debt" in respect of a sale-leaseback transaction or an
operating lease in respect of a health care facility means, at the time of
determination, the present value (discounted at the interest rate implicit in
the lease, compounded semiannually) of the obligation of the lessee of the
property subject to such sale-leaseback transaction or operating lease in
respect of a health care facility for rental payments during the remaining term
of the lease included in such transaction including any period for which such
lease has been extended or may, at the option of the lessor, be extended or
until the earliest date on which the lessee may terminate such lease without
penalty or upon payment of penalty (in which case the rental payments shall
include such penalty), after excluding all amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water,
utilities and similar charges.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness
3
multiplied by (b) the amount of each such principal payment by (ii) the sum of
all such principal payments.
"Bankruptcy Law" means Title 11, United States Code, as amended, or any
similar United States federal or state law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or any
Guarantor, as the case may be, or any Committee of the Board of Directors duly
authorized to act on behalf of the Board of Directors.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or any Guarantor, as the case may be,
to have been duly adopted by the Board of Directors or any committee thereof and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York or the
City of Boston, Massachusetts, are authorized or obligated by law or executive
order to close.
"Capital Lease Obligation" of any Person means any obligation of such
Person and its Subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded on
the balance sheet of such Person as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock or equity interests.
"Cash Equivalent" means (A) any security, maturing not more than six months
after the date of acquisition, issued by the United States of America, or an
instrumentality or agency thereof and guaranteed fully as to principal, premium,
if any, and interest by the United States of America, (B) any certificate of
deposit, time deposit, money market account or bankers' acceptance, maturing not
more than six months after the date of acquisition, issued by any commercial
banking institution that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not less than
$500,000,000, whose debt has a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Xxxxx'x Investors Service,
Inc. or any successor rating agency, or "A-1" (or higher) according to Standard
and Poor's Corporation or any successor rating agency, and
4
(C) commercial paper, maturing not more than three months after the date of
acquisition, issued by any corporation (other than an Affiliate or Subsidiary of
the Company) organized and existing under the laws of the United States of
America with a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or any
successor rating agency, or "A-1" (or higher) according to Standard and Poor's
Corporation or any successor rating agency.
"Change in Control" occurs at any time that (i) any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other
than Permitted Holders, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 40% of the
total Voting Stock of the CoMpany; provided, that the Permitted Holders
"beneficially own" a lesser percentage of the Voting Stock than such other
person or group and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the Board of
Directors of the Company; (ii) the Company consolidates with, or merges into,
another Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates or
merges with or into the Company, in any such event pursuant to a transaction in
which the outstanding Voting Stock of the Company is changed into or exchanged
for cash, securities or other property, other than any such transaction where
(A) the outstanding Voting Stock of the Company is changed into or exchanged for
(x) Voting Stock of the surviving corporation which is not Redeemable Capital
Stock or (y) cash, securities or other property in an amount which could be paid
by the Company in accordance with Section 1009 (and such amount shall be treated
as a Restricted Payment subject to the provisions in Section 1009), and (B) the
Holders of the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, not less than 50% of the Voting Stock of the
surviving corporation immediately after such transaction; (iii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of at least
66 2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation.
"Code" means the Internal Revenue Code of 1986, as amended.
5
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means The Hillhaven Corporation, a corporation incorporated under
the laws of Nevada, until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person. To the extent necessary to comply with the requirements
of the provisions of Trust Indenture Act Sections 310 through 317 as they are
applicable to the Company, the term "Company" shall include any other obligor
with respect to the Securities for purposes of complying with such provisions.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice-Chairman, its President or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Income Tax Expense" means for any period, as applied to any
Person, the provision for federal, state, local and foreign income taxes of such
Person and its Consolidated Subsidiaries for such period as determined in
accordance with GAAP.
"Consolidated Interest Expense" of any Person means, without duplication,
for any period, as applied to any Person, the sum of (a) the interest expense of
such Person and its Consolidated Subsidiaries for such period, on a consolidated
basis, including, without limitation, (i) amortization of debt discount, (ii)
the net cost under interest rate contracts (including amortization of
discounts), (iii) any payment or fees with respect to guarantees, letters of
credit, or similar facilities, (iv) the interest portion of any deferred payment
obligation and (v) accrued interest, plus (b) the interest component of the
Capital Lease Obligations paid, accrued and,'or scheduled to be paid, or accrued
by such Person during such period, in each case as determined in accordance with
GAAP, plus (c) Preferred Stock dividends in respect of Preferred Stock of the
Company or any Subsidiary held by Persons other than the Company or a Wholly
Owned Subsidiary.
"Consolidated Net Income (Loss)" of any Person means, for any period, the
Consolidated net income (or loss) of the Company and its Consolidated
Subsidiaries for such period as determined in accordance with GAAP, adjusted, to
the extent included in calculating such net income (loss), by excluding (i) all
6
extraordinary gains or losses (less all fees and expenses relating thereto),
(ii) the portion of net income (or loss) of the Company and its Consolidated
Subsidiaries allocable to minority interests in unconsolidated Persons to the
extent that cash dividends or distributions have not actually been received by
the Company or one of its Consolidated Subsidiaries, (iii) net income (or loss)
of any Person combined with the Company or any of its Subsidiaries in a "pooling
of interests" basis attributable to any period prior to the date of combination,
(iv) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan, (v) any gains or losses (less all fees and
expenses relating thereto) in respect of dispositions of assets other than in
the ordinary course of business, or (vi) the net income of any Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Subsidiary or its shareholders.
"Consolidated Net Worth" of any Person means the Consolidated stockholders'
equity (excluding Redeemable Capital Stock) of such Person and its Consolidated
Subsidiaries as set forth on the most recent consolidated balance sheet of such
Person and its Consolidated Subsidiaries determined in accordance with GAAP.
"Consolidated Rental Payments" of any Person means, for any period, the
aggregate rental obligations of such Person and its Consolidated Subsidiaries
(not including taxes, insurance, maintenance and similar expenses that the
lessee is obligated to pay under the terms of the relevant leases), determined
on a consolidated basis in conformity with GAAP, payable in respect of such
period under Attributable Debt or leases of real or personal property not
constituting Attributable Debt (net of income from subleases thereof, not
including taxes, insurance, maintenance and similar expenses that the sublessee
is obligated to pay under the terms of such sublease), whether or not such
obligations are reflected as liabilities or commitments on a consolidated
balance sheet of such Person and its Subsidiaries or in the notes thereto,
excluding, however, in any event, (i) that portion of Consolidated Interest
--------- -------
Expense of such Person representing payments by such Person or any of its
Consolidated Subsidiaries in respect of Capital Lease Obligations (net of
payments to such Person or any of its Consolidated Subsidiaries under subleases
qualifying as capitalized lease subleases to the extent that such payments would
be deducted in determining Consolidated Interest Expense) and (ii) the aggregate
amount of amortization of obligations of such Person and its Consolidated
Subsidiaries in respect of such Capital Lease Obligations for such period (net
of payments to such Person or any of its Consolidated Subsidiaries and subleases
qualifying as
7
capitalized lease subleases to the extent that such payments could be deducted
in determining such amortization amount).
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under
the New Bank Credit Agreement and (ii) any other Senior Indebtedness which is
$25,000,000 or more in aggregate principal amount outstanding and is
specifically designated in the instrument evidencing such Senior Indebtedness as
"Designated Senior Indebtedness".
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing
buyer.
"Fiscal Year" with respect to the Company shall mean the fiscal year of the
Company.
"Fixed Charge Coverage Ratio" of any Person means, for any period, the
ratio of (a) the sum of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense, and one-third of Consolidated Rental Payments
plus, without duplication, all depreciation, amortization and all other non-cash
charges (excluding any such non-cash charge constituting an extraordinary item
or loss or any non-cash charge which requires an accrual of or a reserve for
cash charges for any future period), in each case, for such period, of the
Company and its Subsidiaries on a Consolidated basis, as determined in
accordance with GAAP to (b)
8
the sum of (i) Consolidated Interest Expense for such period and (ii) one-third
of Consolidated Rental Payments for such period; provided that in making such
--------
computation, the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and (A) bearing a floating interest
--- -----
rate shall be computed as if the rate in effect on the date of computation had
been the applicable rate for the entire period and (B) which was not outstanding
during the period for which the computation is being made but which bears, at
the option of the Company, a fixed or floating rate of interest, the Company
shall apply, at its option, either the fixed or floating rate for purposes of
calculating the Fixed Charge Coverage Ratio.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect from time to time.
"Guarantee" means the guarantee by any Guarantor which guarantees the
Indenture Obligations pursuant to a guarantee given in accordance with this
Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the Holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "Guaranteed Debt" shall not include
--------
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Guarantor" means any Person which guarantees the Indenture Obligations
pursuant to this Indenture.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services,
9
excluding any trade payables and other accrued current liabilities arising in
the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such Person in connection with any
letters of credit or acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Capital Stock of such Person, or any warrants, rights or options to acquire
such Capital Stock, now or hereafter outstanding, (ii) all obligations of such
Person evidenced by bonds, notes, debentures, loan agreements, credit
agreements, lines of credit or other similar instruments, (iii) every obligation
of such Person issued or contracted for as payment in consideration of the
purchase by such Person or an Affiliate of such Person of the Capital Stock or
substantially all of the assets of another Person or in consideration for the
merger or consolidation with respect to which such Person or an Affiliate of
such Person was a party (other than any obligation of such Person to pay an
amount to another Person based on income in respect of Capital Stock or assets
which were purchased or in respect of such merger to which such Person or an
Affiliate was a party except for such obligations which are required in
accordance with GAAP to be classified as a liability on the balance sheet of
such Person), (iv) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), but excluding trade payables and other accrued current liabilities
arising in the ordinary course of business, (v) all obligations under Interest
Rate Contracts of such Person, (vi) all Capital Lease Obligations of such
Person, (vii) all indebtedness referred to in clauses (i) through (vi), (ix) and
(x) of other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien, upon any property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, (viii) all Guaranteed Debt of such Person, (ix) all
Redeemable Capital Stock valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends and (x) all
Attributable Debt of such Person. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capita1 Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value to be determined
10
in good faith by the board of directors of the issuer of such Redeemable Capital
Stock.
"Indenture" means this instrument as originally executed (including all
exhibits and schedules thereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provision hereof.
"Indenture Obligations" means the obligations of the Company and any other
obligor under this Indenture or under the Securities, including any Guarantor,
to pay principal of, premium, if any, and interest when due and payable, and all
other amounts due or to become due under or in connection with this Indenture,
the Securities and the performance of all other obligations to the Trustee and
the Holders under this Indenture and the Securities, according to the terms
thereof.
"Intercompany Agreement" means the Intercompany Agreement among the Company
and its Subsidiaries in the form of Exhibit A hereto.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Contracts" means interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, interest rate insurance,
and other agreements or arrangements designed to provide protection against
fluctuations in interest rates.
"Investment" means, with respect to any Person, directly or indirectly, any
advance, loan or other extension of credit or capital contribution to (by means
of any transfer of cash or other property (tangible or intangible) to others, or
any payment for property or services for the account or use of others or
otherwise), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities (including, without
limitation, any interests in any partnership or joint venture) issued or owned
by any other Person.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"Management Investors" means each (i) director of the Company and (ii) each
"officer" of the Company as such term is defined in Rule 16a-1 promulgated under
the Exchange Act.
11
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity, or any Redemption Date
and whether by declaration of acceleration, Offer in respect of Excess Proceeds,
Change in Control Offer in respect of a Change in Control, call for redemption
or otherwise.
"Net Cash Proceeds" means, with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or Cash Equivalents including payments
in respect of deferred payment obligations when received in the form of, or
stock or other assets when disposed for, cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Subsidiary) net of (i) brokerage commissions and other reasonable fees
and expenses (including fees and expenses of counsel and investment bankers)
related to such Asset Sale, (ii) provisions for all taxes payable as a result of
such Asset Sale, (iii) payments made to retire Indebtedness where payment of
such Indebtedness is secured by the assets or properties the subject of such
Asset Sale, (iv) amounts required to be paid to any Person (other than the
Company or any Subsidiary) owning a beneficial interest in the assets subject to
the Asset Sale and (v) appropriate amounts to be provided by the Company or any
Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an officers'
certificate delivered to the Trustee.
"New Bank Credit Agreement" means the Credit Agreement, dated as of
_______, 1993, among First Healthcare Corporation, certain lenders named therein
and Xxxxxx Guaranty Trust Company of New York, as agent, together with the
documents related thereto, including without limitation, any security
agreements, pledge agreements, mortgages and guarantees, in each case as such
agreements may be amended, extended, renewed, restated, supplemented, otherwise
modified, refinanced or replaced from time to time, whether or not involving the
same lenders.
"NME" means National Medical Enterprises, Inc.
"Non-payment Default" means any event (other than a Payment Default) the
occurrence of which entitles one or more Persons to accelerate the maturity of
any Designated Senior Indebtedness.
12
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of Vice
Presidential designation), and by the Treasurer, Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or the Trustee unless an independent counsel is required
pursuant to the terms of this Indenture, and who shall be acceptable to the
Trustee.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that if such Securities are to be redeemed,
--------
notice of such redemption has been duly given pursuant to this Indenture or
provision there for reasonably satisfactory to the Trustee has been made; and
Securities, except to the extent provided in Sections 402 and 403, with respect
to which the Company has effected defeasance or covenant defeasance as provided
in Article Four; and
(c) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof reasonably satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands the Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
-------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor, or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been
13
pledged in good faith may be regarded as Outstanding if the pledgee certifies to
the Trustee that the pledgee has the right so to act with respect to such
Securities and that the pledgee is not the Company, any Guarantor or any other
obligor upon the Securities or any Affiliate of the Company, any Guarantor or
such other obligor.
"Pari Passu Indebtedness" means Indebtedness of the Company which ranks
pari passu in right of payment to the Securities.
---- -----
"Paying Agent" means any Person authorized by the Company to pay the
principal, premium, if any, or interest on any Securities on behalf of the
Company.
"Payment Default" means any default in the payment of principal, premium,
if any, interest, commitment fees, letter of credit fees, reimbursement
obligations in respect of amounts owing under letters of credit or payments in
respect of interest under Interest Rate Contracts on any Designated Senior
Indebtedness.
"Permitted Holders" means NME and the Management Investors.
"Permitted Indebtedness" means:
(a) Indebtedness of up to $360,000,000 aggregate principal amount under
the New Bank Credit Agreement;
(b) Indebtedness of up to $40,000,000 under the Accounts Receivable
Financing;
(c) any guarantee by the Company or any Subsidiary under the New Bank
Credit Agreement;
(d) Indebtedness in existence on the date of this Indenture and set forth
on Schedule I hereto;
(e) Indebtedness of the Company pursuant to the Securities;
(f) Indebtedness evidenced by letters of credit issued in the ordinary
course of business consistent with past practice to support the Company's or any
Subsidiary's insurance or self-insurance obligations (including to secure
workers' compensation and other similar insurance coverages);
(g) obligations pursuant to Interest Rate Contracts, to the extent that
the notional principal amount of such obligations does not exceed the amount of
Indebtedness outstanding or committed to be incurred on the date such Interest
Rate Contracts are entered into;
14
(h) Indebtedness of the Company to a Subsidiary (provided that any
Indebtedness of the Company owing to a Wholly Owned Subsidiary is subject to the
Intercompany Agreement) and Indebtedness of a Subsidiary to the Company or
another Subsidiary;
(i) any guarantees of Indebtedness by a Subsidiary entered into in
accordance with Section 1016;
(j) obligations in respect of surety bonds or appeal bonds provided by the
Company or a subsidiary in the ordinary course of business;
(k) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business; provided that such
Indebtedness is extinguished within three Business Days of incurrence;
(l) Indebtedness of the Company consisting of guarantees, indemnities or
obligations in respect of purchase price adjustments in connection with the
acquisition or disposition of assets;
(m) Indebtedness of the Company or any Subsidiary, in addition to that
described in clauses (a) through (l) of this definition of "Permitted
Indebtedness," in an aggregate principal amount outstanding at any given time
not to exceed $25,000,000; and
(n) any renewals, extensions, substitutions, refundings, refinancings or
replacements of any Indebtedness described in clauses (a) through (e) of this
definition of "Permitted Indebtedness," including any successive extensions,
renewals, substitutions, refundings, refinancings or replacements, so long as
(i) any such new Indebtedness shall be in a principal amount that does not
exceed the principal amount (or, if such Indebtedness being refinanced provides
for any amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced, plus the amount of any premium required to be paid
----
under the terms of the instrument governing such Indebtedness being refinanced
or the amount of any premium reasonably determined by the Company as necessary
to accomplish such refinancing through means of a tender offer or privately
negotiated transactions and, in each case, actually paid, plus the amount of
expenses of the Company incurred in connection with such refinancing, (ii) in
the case of any refinancing of Subordinated Indebtedness, such new Indebtedness
is made subordinate to the Securities at least to the same extent as the
Indebtedness being refinanced; (iii) in the case of any refinancing of Pari
Passu Indebtedness, such new Indebtedness shall rank not more than equally in
priority of payment with the Securities; (iv) any such
15
new Subordinated Indebtedness has an Average Life to Stated Maturity longer than
the Average Life to Stated Maturity of the Securities and final Stated Maturity
later than the final Stated Maturity of the Securities; and (v) any such new
Pari Passu Indebtedness has an Average Life to Stated Maturity equal to or
longer than the Average Life to Stated Maturity of the Securities and a final
Stated Maturity equal to or later than the final Stated Maturity of the
Securities.
"Permitted Investment" means (i) Investments in any of the Securities or
any Guarantee; (ii) Temporary Cash Investments; (iii) Indebtedness of the
Company to a Subsidiary (provided that any Indebtedness of the Company to a
Wholly Owned Subsidiary is subject to the Intercompany Agreement); (iv)
Investments in existence on the date of this Indenture; provided, however, that
-------- -------
to the extent Indebtedness in existence on the date of this Indenture that
constitutes a Permitted Investment is repaid, the amount of such repayment may
be reinvested and shall constitute a Permitted Investment; (v) Investments in
any Wholly Owned Subsidiary by the Company or any Wholly Owned subsidiary or any
Investment in the. Company by any Wholly Owned Subsidiary; (vi) receivables
owing to the Company and it. Subsidiaries if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (vii) Investments acquired or retained from another Person in
connection with any sale, conveyance, transfer, lease or other disposition of
any properties or assets to such Person; and (viii) in addition to the Permitted
Investments described in the foregoing clauses (i) through (vii), Investments in
the aggregate amount of $10,000,000 at any one time outstanding.
"Permitted Junior Securities" shall have the meaning specified in Article
Twelve.
"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PIP Debentures" means the Company's convertible debentures due May 29,
1999 held by Hillhaven PIP Funding I, Inc., a Wholly Owned Subsidiary, issued in
connection with the Company's 1991 Performance Investment Plan.
"PIP Options" means options outstanding on the date of the Indenture
granted pursuant to the Company's 1991 Performance Investment Plan.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as
16
that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for a mutilated Security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.
"Preferred Stock," as applied to any Person, means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"Public Equity Offering" means, with respect to any Person, a public
offering by such Person pursuant to a registration statement filed with the
Securities and Exchange Commission in accordance with the Securities Act of
shares of its Qualified Capital Stock.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Securities or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity at the option of
the holder thereof.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the price at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the 15th day (whether or not a Business Day) next preceding such
Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the agent of the Trustee
appointed hereunder, including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant officer of the Trustee or
the agent of the Trustee appointed hereunder to whom any corporate trust matter
17
is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Payment" has the meaning specified in Section 1009.
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition by or against the
Company under any state or federal Bankruptcy Laws, whether or not such interest
is allowed as a claim after such filing in any proceeding under such law) on any
Indebtedness of the Company (other than as otherwise provided in this
definition), whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (a) Indebtedness evidenced by
the Securities, (b) Indebtedness that is by its terms subordinate or junior in
right of payment to any Indebtedness of the Company, including the Company's
outstanding Convertible Subordinated Debentures due 2002, (c) Indebtedness which
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Law is without recourse to the Company, (d) Indebtedness which is
represented by Redeemable Capital Stock, (e) Indebtedness for goods, materials
or services purchased in the ordinary course of business or Indebtedness
consisting of trade payables or other current liabilities, (f) Indebtedness of
or amounts owed by the Company for compensation to employees or for services,
(g) to the extent it might constitute Indebtedness, any liability for federal,
state, local or other taxes owed or owing by the Company, (h) Indebtedness
(other than the then outstanding principal amount of the PIP Debentures) of the
Company to a Subsidiary of the Company or any other Affiliate of the Company or
any of such Affiliate's subsidiaries, (i) that portion of any Indebtedness which
at the time of issuance is issued in violation of this Indenture, and (j) to the
extent it might constitute Indebtedness, amounts owing under leases (other than
Capital Lease Obligations).
"Senior Representative" means a representative of one or more holders of
Designated Senior Indebtedness.
18
"Series C Preferred Stock" means the shares of the Company's 8-1/4%
cumulative, non-voting Series C Preferred Stock outstanding on the date of this
Indenture, the rights, privileges and preferences with respect to which are
described in the certificate of designation in effect on the date of this
Indenture.
"Series D Preferred Stock" means the shares of the Company's Series D
Preferred Stock outstanding on the date of this Indenture, the rights,
privileges and preferences with respect to which are described in the
certificate of designation in effect on the date of this Indenture and any
additional Series D Preferred Stock that may be issued as payment-in-kind
dividends in accordance with such certificate of designation.
"Significant Subsidiary" shall include each Subsidiary that qualifies as a
"significant subsidiary" as that term is defined in Rule 1-02 of Regulation S-X
under the Securities Act, and in any event shall include the Subsidiary
Guarantors, if any.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company subordinated
in right of payment to the Securities.
"Subsidiary" means any corporation or other entity at least a majority of
the outstanding voting shares of which is at the time directly or indirectly
owned or controlled (either alone or through Subsidiaries or together with
Subsidiaries) by the Company or another Subsidiary.
"Temporary Cash Investment" means (A) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
19
America, (B) any certificate of deposit, time deposit, money market account or
bankers' acceptance maturing not more than one year after the date of
acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $500,000,000, whose debt has a
rating, at the time as of which any investment therein is made, of "P-1" (or
higher) according to Xxxxx'x Investors Service, Inc. or any successor rating
agency, or "A-1" (or higher) according to Standard and Poor's Corporation or any
successor rating agency, (C) commercial paper, maturing not more than one year
after the date of acquisition, issued by a corporation (other than an Affiliate
or Subsidiary of the Company) organized and existing under the laws of the
United States of America with a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Xxxxx'x Investors Service,
Inc. or any successor rating agency, or "A-1" (or higher) according to Standard
and Poor's Corporation or any successor rating agency, and (D) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this instrument was executed, except as
provided in Section 905.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).
"Warrants" means the warrants outstanding on the date of this Indenture
held by NME to purchase up to 30,000,000 shares of the Company's common stock
pursuant to the terms of that certain Warrant and Registration Rights Agreement
dated January 31, 1990 between the Company and NME.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of which
is owned by the Company or another Wholly Owned Subsidiary. For purposes of
this definition, directors qualifying shares shall be disregarded in determining
the ownership of a Subsidiary.
20
Section 102. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Act" 105
"Change in Control Offer" 1018
"Change in Control Purchase Date" 1018
"Change in Control Purchase Notice" 1018
"Change in Control Purchase Price" 1018
"covenant defeasance" 403
"Defaulted Interest" 307
"defeasance" 402
"Defeased Securities" 401
"Excess Proceeds" 1015
"Offer" 1015
"Offered Price" 1015
"Pari Passu Debt Amount" 1015
"Pari Passu Offer" 1015
"Payment Blockage Period" 1203
"Permitted Preferred Stock" 1010
"Purchase Date" 1015
"Securities Amount" 1015
"Surviving Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company, any Guarantor and any
other obligor on the Securities shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture (including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that, in the case of any such
application or request as to which the furnishing of such documents,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
21
(b) 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;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor or
other obligor of the Securities may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Company, any Guarantor or other obligor of the Securities stating that
the information with respect to such factual matters is in the possession of the
Company, any Guarantor or other obligor of the Securities, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
22
Section 105. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The ownership of Securities shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
or any Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.
Section 106. Notices, etc., to Trustee, the Company and any Guarantor.
--------------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or any
other obligor of the Securities or a Senior Representative or holder of Senior
Indebtedness shall be sufficient for every purpose hereunder if made, given,
furnished or filed, in writing, to or with the Trustee at State Street Bank and
Trust Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX, 00000, or, if delivered by
recognized overnight carrier, to, State Street Bank and Trust Company, 5th
Floor, Xxx Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, XX, 00000-0000, in either case,
Attention: Mr. Xxxxx Xxxxxx, Corporate Trust Department or at any other address
previously furnished in writing to the Holders, the Company, any Guarantor, any
other obligor of
23
the Securities or a Senior Representative or Holder of Senior Indebtedness by
the Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder if in writing and mailed,
first-class postage prepaid or delivered to the Company or such Guarantor
addressed to it at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Secretary, or at any other address previously furnished in writing to the
Trustee by the Company.
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice when mailed to a Holder in the aforesaid
manner shall be conclusively deemed to have been received by such Holder whether
or not actually received by such Holder. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any provision
of the Trust Indenture Act or another provision which is required or deemed to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, the provision or requirement of the Trust Indenture Act shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the
24
latter provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and any
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
-------------------
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.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent, the holders and the Holders of Senior Indebtedness)
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 113. GOVERNING LAW.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF).
25
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the securities) payment of interest or
principal or premium, if any, need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, to the next succeeding Business Day.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities and the Trustee's certificate of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by the Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, any organizational
document or governing instrument or applicable law or as may, consistently
herewith, be determined by the officers executing such securities, as evidenced
by their execution of the Securities. Any portion of the text of any Security
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Section 202. Form of Face of Security.
------------------------
The form of the face of the Securities shall be substantially as follows:
26
THE HILLHAVEN CORPORATION
___________________
________% SENIOR SUBORDINATED NOTES due 2001
No. ________________ $______________
THE HILLHAVEN CORPORATION, a Nevada corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________________ or registered assigns, the principal sum of
___________________ United States dollars on ___________________, 2001, at the
office or agency of the Company referred to below, and to pay interest thereon
from _______________, 1993 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on
__________________ and _________________, in each year, commencing
_____________________, 1994 at the rate of ___________ % per annum, in United
States dollars, until the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be ____________ or ___________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Securities, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this Security
will be made at the office or agency of the Company maintained for that purpose
in The City of New York, or at such other office or agency of the Company as may
be maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
27
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: __________________ THE HILLHAVEN CORPORATION
By:___________________________
Attest:
[SEAL]
-------------------------
Secretary
Section 203. Form of Reverse of Security.
---------------------------
The form of the reverse of the Securities shall be substantially as
follows:
This Security is one of a duly authorized issue of Securities of the
Company designated as its _____________% Senior Subordinated Notes due 2001
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $175,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of ______________, 1993, among the Company and State Street Bank and Trust
Company, as trustee (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Trustee
28
and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on this Security and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Indenture), whether Outstanding on the date of the Indenture or thereafter, and
this Security is issued subject to such provisions. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee his attorney-in-fact for
such purpose; provided, however, that the indebtedness evidenced by this
-------- -------
Security shall cease to be so subordinate and subject in right of payment upon
any defeasance of this Security referred to in clause (a) or (b) of the next
preceding paragraph.
The Securities are subject to redemption, as a whole or in part, at any
time on or after ____________, 1998 at the option of the Company, upon not less
than 30 nor more than 60 days' prior notice by first-class mail in amounts of
$1,000 or an integral multiple of $1,000 at the following redemption prices
(expressed as a percentage of the principal amount) if redeemed during the 12-
month period beginning _____________ of the years indicated below:
Redemption
Year Price
---- ----------
1998 ............................. ______%
1999 ............................. ______%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of the Holders of record on the relevant record date to receive interest
due on an Interest Payment Date). If less than all of the Securities are to be
redeemed, such portion of the Securities shall be redeemed pro rata, by lot or
by any other method the Trustee shall deem fair and reasonable.
At any time on or prior to __________, 1996, the Company may redeem up to
an aggregate of $50,000,000 principal amount of
29
Securities within 180 days of the conclusion of one or more Public Equity
Offerings of the Company or any of its Subsidiaries with the net proceeds of
such offerings at a redemption price equal to ___% of the aggregate principal
amount, together with accrued and unpaid interest, if any, to the Redemption
Date.
Upon the occurrence of a Change in Control, each Holder may require the
Company to repurchase all or a portion of such Holder's Securities at a purchase
price in cash equal to 101% of the principal amount thereof, together with
accrued and unpaid interest to the date of repurchase.
Under certain circumstances, in the event the Net Cash Proceeds received by
the Company from any Asset Sale, which is not used to prepay Senior Indebtedness
or invested in properties or assets used in the businesses of the Company,
exceeds $17,500,000, the Company will be required to apply such proceeds to the
repayment of the Securities and certain indebtedness ranking pari passu to the
---- -----
Securities.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities of record at the close of business on the relevant
Record Date referred to on the face hereof. Securities (or portions thereof)
for whose redemption and payment provision is made in accordance with the
Indenture shall cease to bear interest from and after the date of redemption.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a specified
percentage in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
specified percentage in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain
30
provisions of the Indenture and certain past Defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company or any
Guarantor (in the event such Guarantor is obligated to make payments in respect
of the Securities), which is absolute and unconditional, to pay the principal
of, premium, if any, and interest on this Security at the times, place, and
rate, and in the coin or currency, herein prescribed, subject to the
subordination provisions of the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York or at such other office or agency of the Company as may be maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Company, the Trustee nor any agent shall be affected by notice to the contrary.
31
All terms used in this Security which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY
As Trustee
By:________________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to $175,000,000 in principal amount of
Securities, except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 303, 304, 305, 306, 906, 1015, 1018 or 1108.
The Securities shall be known and designated as the "__________% Senior
Subordinated Notes due 2001" of the Company. The Stated Maturity of the
Securities shall be ____________, 2001, and the Securities shall bear interest
at the rate of _________ % per annum from ___________, 1993 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, as the case may be, payable on ___________, 1994 and semi-annually
thereafter on____________ and _____________, in each year, until the principal
thereof is paid or duly provided for. Subject to Article Twelve, interest on any
overdue principal, interest (to the extent lawful) or premium, if any, shall be
payable on demand.
The principal of, premium, if any, and interest on the Securities shall be
payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; provided, however, that at the option of the
-------- -------
Company interest may be paid by check mailed to addresses of the Persons
32
entitled thereto as such addresses shall appear on the Security Register.
The Securities shall be redeemable at the option of the Company as provided
in Article Eleven.
At the election of the Company, the entire indebtedness on the Securities
or certain of the Company's obligations and covenants and certain Events of
Default thereunder may be defeased as provided in Article Four.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
Section 302. Denominations.
-------------
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by one of its
Chairman of the Board, its President or one of its Vice Presidents under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the
33
Trustee by manual signature of an authorized officer, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
In case the Company, pursuant to Article Eight or Section 1018, shall be
consolidated, amalgamated, merged with or into any other Person or shall convey,
transfer or lease substantially all of its properties and assets to any Person,
and the successor Person resulting from such consolidation or amalgamation, or
surviving such merger, or into which the Company shall have been merged or
amalgamated, or the Person which shall have received a conveyance, transfer or
lease as aforesaid, shall have executed an indenture supplemental hereto with
the Trustee pursuant to Article Eight, any of the Securities authenticated or
delivered prior to such consolidation, amalgamation, merger, conveyance,
transfer or lease may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Request of
the successor Person, shall authenticate and deliver Securities as specified in
such request for the purpose of such exchange. If Securities shall at any time
be authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten or otherwise produced,
in any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
34
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee, or such other office as the Trustee may designate, a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 1002 being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as the Security
Registrar may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee or an agent thereof or
of the Company shall initially be the "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or
for exchange or redemption shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the
35
Company and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to pay all documentary, stamp or similar issue or
transfer taxes or other governmental charges that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 303, 304, 305, 306, 906, 1015, 1018 or 1108 not
involving any transfer.
Neither the Company nor the Security Registrar shall be required (a) to
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business (i) 15 days before the mailing of a notice
of redemption of the Securities selected for redemption under Section 1104 and
ending at the close of business on the day of such mailing or (ii) 15 days
before an Interest Payment Date and ending on the close of business on the
Interest Payment Date, or (b) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of Securities being redeemed in part.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, each Guarantor, if any, and the Trustee, such security or indemnity, in
each case, as may be required by them to save each of them harmless, then, in
the absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a replacement Security of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section, the
Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charge that may
be imposed in relation thereto
36
and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and the Guarantors, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in Subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Security and the
date (not less than 35 days after such notice) of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Subsection provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
37
payment and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company in
writing of such Special Record Date. In the name and at the expense of the
Company, the Trustee shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed, first-
class postage prepaid, to each Holder at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities are registered on such Special Record
Date and shall no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment to the Persons in whose name the
Securities are registered at the close of business on the Special Record Date of
any Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the proposed payment pursuant to
this Subsection, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
---------------------
The Company, any Guarantor, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 307) interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and
neither the Company, any Guarantor, the Trustee nor any agent of the Company,
any Guarantor or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
------------
All Securities surrendered for payment, purchase, redemption, registration
of transfer or exchange shall be delivered to the Trustee and, if not already
cancel led, shall be promptly cancelled by it. The Company and any Guarantor may
at any time deliver to the Trustee for cancellation any Securities previously
38
authenticated and delivered hereunder which the Company or such Guarantor may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities shall
be held by the Trustee in accordance with the record retention requirements of
the Exchange Act. The Trustee shall provide the Company a list of all
Securities that have been cancelled from time to time as requested in writing by
the Company.
Section 310. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day year
of twelve 30-day months.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance.
------------------------------------------------------------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 402 or Section 403 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 401 of the option applicable to
this Section 402, the Company and each Guarantor, if any, shall be deemed to
have been discharged from its obligations with respect to the Defeased
Securities on the date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Defeased Securities, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 405 and the other sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, and,
upon written request, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Defeased Securities to
receive, solely from the trust fund described in Section 404 and as more fully
set
39
forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Securities when such payments are due, (b) the
Company's obligations with respect to such Defeased Securities under Sections
304, 305, 306, 1002 and 1003, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 606, and (d) this Article Four. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 402 notwithstanding the prior exercise of its option under Section
403 with respect to the Securities.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable to
this Section 403, the Company and any Guarantor, if any, shall be released from
its obligations under each covenant or provision contained in Section 501(g) or
(h) and in Sections 1006 through 1019 and the provisions of Articles Eight and
Twelve, shall not apply, with respect to the Defeased Securities on and after
the date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Defeased Securities shall thereafter be deemed to be 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 and the provisions of Article Twelve, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company and
each Guarantor, if any, may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or Article or by reason of any reference in any such
Section or Article to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 501(c), (d) or (e), but, except as specified above, the remainder
of this Indenture and such Defeased Securities shall be unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section 402
or Section 403 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 608
who shall agree to comply with the provisions of this Article Four 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
40
benefit of the Holders of such Securities, (a) United States dollars in an
amount, or (b) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (c) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge the principal of, premium, if any, and interest on the Defeased
Securities on the Stated Maturity (or Redemption Date, if applicable) of such
principal or installment of principal and interest; provided that the Trustee
--------
shall have been irrevocably instructed in writing to apply such United States
dollars or the proceeds of such U.S. Government Obligations to said payments
with respect to the Securities; and provided, further, that from and after the
-------- -------
91st day after the date of deposit, the United States dollars or U.S. Government
Obligations deposited shall not be subject to the rights of the Holders of
Senior Indebtedness pursuant to the provisions of Article Twelve. For this
purpose, "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof prior
to the Stated Maturity of the Securities, and shall also include a depository
receipt issued by a bank (as defined in Section 3(a) (2) of the Securities Act),
as custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the Holder of such depository receipt,
provided that (except as required by law) such custodian is not authorized to
--------
make any deduction from the amount payable to the Holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) In the case of an election under Section 402, the Company shall have
delivered to the Trustee an Opinion of Counsel of independent counsel in the
United States of nationally recognized standing to the effect that the Holders
of the then Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be subject
to federal income tax on the same amounts, in the same
41
manner and at the same times as would have been the case if such defeasance had
not occurred.
(3) In the case of an election under Section 403, the Company shall have
delivered to the Trustee an Opinion of Counsel of independent counsel in the
United States of nationally recognized standing to the effect 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.
(4) No Default or Event of Default shall have occurred and be continuing
on the date of such deposit or insofar as subsections 501(g) and (h) are
concerned, at any time during the period ending on the 91st day after the date
of deposit.
(5) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under the Indenture, the New Bank Credit
Agreement or any other material agreement or instrument to which the Company or
any Guarantor is a party or by which it is bound.
(6) In the case of defeasance or covenant defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel of independent counsel to
the effect that (A) the trust funds will not be subject to any rights of Holders
of Senior Indebtedness, including, without limitation, those arising under this
Indenture, after the 91st day following the deposit and (B) 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.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of the Securities or any Guarantee over the other
creditors of the Company or any Guarantor with the intent of defecting,
hindering, delaying or defrauding creditors of the Company or others.
(8) No event or condition shall exist that would prevent the Company from
making payments of the principal of, premium, if any, and interest on the
Securities on the date of such deposit or at any time ending on the 91st day
after the date of such deposit.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 402 or
the covenant defeasance under
42
Section 403 (as the case may be) have been complied with as contemplated by this
Section 404.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all United
States dollars and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee--collectively for
purposes of this Section 405, the "Trustee") pursuant to Section 404 in respect
of the Defeased 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 its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 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 Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
United States dollars or U.S. Government Obligations held by it as provided in
Section 404 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States dollars
or U.S. Government Obligations in accordance with Section 402 or 403, as the
case may be, by reason of any order or
43
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 402 or 403, as the case may be, until
such time as the Trustee or Paying Agent is permitted to apply all such United
States dollars or U.S. Government Obligations in accordance with Section 402 or
403, as the case may be; provided, however, that if the Company makes any
-------- -------
payment to the Trustee or Paying Agent of principal, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Trustee or Paying Agent shall promptly pay any such amount to the Holders of the
Securities and the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Twelve or be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):
(a) there shall be a default in the payment of any interest on any
Security when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity;
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or of any Guarantor under this Indenture
(other than a default in the performance or breach of a covenant or agreement
which is specifically dealt with in clauses (a) or (b) or subclauses (ii), (iii)
or (iv) of this clause (c)) and such default or breach shall continue for a
period of 30 days after written notice has been given, by certified mail, (x) to
the Company by the Trustee or (y) to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the outstanding Securities;
(ii) there shall be a default in the performance or breach of the
44
provisions of Article Eight; (iii) the Company shall have failed to make or
consummate an Offer in accordance with the provisions of Section 1015; or (iv)
the Company shall have failed to make or consummate a Change in Control Offer in
accordance with the provisions of Section 1018;
(d) (i) an event of default shall have occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing any Indebtedness of the
Company or any Subsidiary, which Indebtedness is outstanding in an amount of
$15,000,000 or more in the aggregate, and such default shall result in such
Indebtedness becoming, whether by declaration or otherwise, due and payable
prior to the date on which it would otherwise become due and payable or (ii) a
default in any payment when due at final maturity of any such Indebtedness;
(e) any Holder of at least $15,000,000 in aggregate principal amount of
secured Indebtedness of the Company or any Subsidiary under the New Bank Credit
Agreement after a default under such secured Indebtedness under the New Bank
Credit Agreement shall commence proceedings, or take any action, to retain in
satisfaction of such secured Indebtedness under the New Bank Credit Agreement or
to collect, seize, dispose of or apply in satisfaction of such secured
Indebtedness under the New Bank Credit Agreement, assets of the Company or any
Subsidiary having a Fair Market Value in excess of $15,000,000 individually or
in the aggregate (including funds on deposit or held pursuant to lock-box and
other similar arrangements)
(f) one or more judgments, orders or decrees for the payment of money in
excess of $15,000,000, either individually or in the aggregate, shall be entered
against the Company or any Subsidiary or any of their respective properties
which is not fully covered by insurance, bond, surety or similar instrument and
shall not be discharged and either (a) any creditor shall have commenced an
enforcement proceeding upon such judgment, order or decree or (b) there shall
have been a period of 60 days during which a stay of enforcement of such
judgment or order, by reason of an appeal or otherwise, shall not be in effect;
(g) the entry of a decree or order by a court having jurisdiction in the
premises (i) for relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under any applicable Bankruptcy Law or (ii)
adjudging the Company or any Significant Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Significant Subsidiary under applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of
45
any substantial part of any of their respective properties, or ordering the
winding up or liquidation of any of their affairs, and the continuance of any
such decree or order unstayed and in effect, for a period of 60 consecutive
days; or
(h) (i) the institution by the Company or any Significant Subsidiary of a
voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or proceedings to be adjudicated bankrupt or insolvent, (ii) the consent by
the Company or any Significant Subsidiary to the entry of a decree or order for
relief in respect of the Company or such Significant Subsidiary in an
involuntary case or proceeding under any Bankruptcy Law or to the institution of
any bankruptcy or insolvency proceedings against the Company or any Significant
Subsidiary, (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, (iv) the Company or any Significant Subsidiary
(x) consents to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of any of the Company or any Significant
Subsidiary or of any substantial part of their respective properties, (y) makes
an assignment for the benefit of creditors, or (z) admits in writing of its
inability to pay its debts generally as they become due or (v) the taking of
corporate action by the Company or any Significant Subsidiary authorizing any
such actions specified in this paragraph (h).
Within five business days after the occurrence of any Default or Event of
Default, the Company shall deliver to the Trustee written notice thereof, which
notice shall be in the form of an Officers' Certificate and shall include the
status of the Default or Event of Default and what action the Company is taking
or proposes to take with respect thereto.
Section 502. Acceleration of Maturity: Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(g) and (h)) occurs and is continuing, the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Outstanding Securities
may, and the Trustee upon the request of the Holders of not less than 25% in
aggregate principal amount of the Outstanding Securities shall, declare all the
Securities to be due and payable immediately in an amount equal to the principal
amount of the Securities, together with accrued and unpaid interest to the date
the Securities become due and payable, by a notice in writing to the Company
(and to the Trustee, if given by the Holders), and upon any such declaration
such principal and interest shall become immediately due and payable. If an
Event of
46
unpaid interest to the date the Securities become due and payable, by a
notice in writing to the Company (and to the Trustee, if given by the Holders),
and upon any such declaration such principal and interest shall become
immediately due and payable. If an Event of Default specified in Sections
501(g) and (h) occurs and is continuing, then the Securities shall ipso facto
---- -----
become and be immediately due and payable in an amount equal to the principal
amount of the Securities, together with accrued and unpaid interest, without any
declaration or other act on the part of the Trustee or any Holder.
After such declaration of acceleration has been made and before a judgment
or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(i) all sums paid or advanced by the Trustee under Section 606 and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal of the
Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon provided in Section 513.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company and each Guarantor, if any, covenant that if a
47
(a) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period of
30 days, or
(b) default is made in the payment of the principal of or premium, if any,
on any Security at the Stated Maturity thereof, the Company and any such
Guarantor will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, subject to Article Twelve, the whole amount then due
and payable on such Securities for principal and premium, if any, and interest,
with interest upon the overdue principal and premium, if any, and, to the extent
that payment of such interest shall be legally enforceable, upon overdue
installments of interest, in each case, from the date upon which such payments
become due and payable, at the rate borne by the Securities; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company
or any Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Guarantees by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, seeking recourse against any Guarantor pursuant
to the terms of any Grarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 512.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or
48
any other obligor, including each Guarantor, if any, upon the Securities or the
property of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) subject to Article Twelve, to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same;
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 the
Trustee any amount due 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 606.
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 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
49
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article or otherwise on
behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of
any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: Subject to Article Twelve, to the payment of the amounts then due
and unpaid upon the Securities for principal, premium, if any, and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium, if any, and interest;
and
THIRD: Subject to Article Twelve, the balance, if any, to the Person or
Persons entitled thereto, including the Company, provided that all sums due and
owing to the Holders and the Trustee have been paid in full as required by the
Indenture.
Section 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses (including the
reasonable fees and disbursements of its attorneys and agents) and liabilities
to be incurred in compliance with such request;
50
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Guarantee to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner provided in this Indenture or any Guarantee and for the equal and ratable
benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest.
------------
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right on the terms stated herein, which is absolute and
unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder,
subject to Article Twelve.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or any Guarantee and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, each
Guarantor, if any, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at
51
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
--------
(a) such direction shall be in writing and shall not be in conflict with
any rule of law or with this Indenture or any Guarantee or, in the sole judgment
of the Trustee, expose the Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on
any Security, or
(b) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising there from shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver
52
shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver of Stay Extension or Usury Laws.
--------------------------------------
Each of the Company and each Guarantor, if any, covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities contemplated herein or in the Securities or which may affect
the covenants or the performance of this Indenture; and each of the Company and
each Guarantor, if any, (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
53
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
------------------
Within 60 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, however, that, except in
------- -------
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred therein or thereby in
compliance with such request or direction;
54
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Securities then Outstanding; provided that,
--------
if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be paid by
the Company or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Company upon demand; provided, further, the Trustee in its
-------- -------
discretion may make such further inquiry or investigation into such facts
or matters as it may deem fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers;
(i) whenever the Trustee is given hereunder a permissive right or power to
act, such right or power shall not be construed as a requirement to act; and
(j) matters shall not be deemed known by the Trustee unless known by a
Responsible Officer of the Trustee.
55
Section 603. Trustee Not Responsible for Recitals,
-------------------------------------
Dispositions of Securities or Application of Proceeds Thereof.
-------------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Securities and perform
its obligations hereunder and that the statements made by it in a Statement of
Eligibility and Qualification on Form T-1 supplied to the Company are true and
accurate subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of the Securities or
the proceeds thereof.
Section 604. Trustee and Agents May Hold Securities: Collections; Etc.
--------------------------------------------------------
The Trustee, any Paying Agent, Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of the Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 605. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Temporary Cash
Investments in accordance with the written directions of the Company. Absent
written direction from the Company, the Trustee shall not be required to invest
any such monies. The Trustee shall not have liability for any losses on monies
invested in accordance with the directions of the Company.
56
Section 606. Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim.
-----
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation for all services
rendered by it hereunder (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and the company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
loss, liability, tax, assessment or other governmental charge (other than taxes
applicable to the Trustee's compensation hereunder) or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including enforcement of this Section 606 and also including
any liability which the Trustee may incur as a result of failure to withhold,
pay or report any tax, assessment or other governmental charge, and the costs
and expenses of defending itself against or investigating any claim of liability
in the premises. The obligations of the Company under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute an additional obligation hereunder and shall survive
the satisfaction and discharge of this Indenture.
Section 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 608. Corporate Trustee Required: Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under Trust Indenture Act Section 310(a) (1) and which shall have
a combined capital and surplus of at least $100,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the
57
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 609. Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
Trustee by written instrument executed by authority of the Board of Directors of
the Company, a copy Of which shall be delivered to the resigning Trustee and a
copy to the successor Trustee. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed or any
58
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 514, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of the
Securities and accepted appointment in the manner hereinafter provided, the
Holder of any Security who has been a bona fide Holder for at least six months
may, subject to Section 514, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee as if originally named as
59
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor Trustee, upon payment of its charges then unpaid, such retiring
Trustee shall pay over to the successor Trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor Trustee all such rights, powers, duties and obligations. Upon request
of any such successor Trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such
Trustee or such successor Trustee to secure any amounts then due such Trustee
pursuant to the provisions of Section 606.
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 610 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Sixth and
shall have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 608 in
the City of New York.
Upon acceptance of appointment by any successor Trustee as provided in this
Section 610, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at Their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
609. If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Company.
Section 611. Merger, Conversion, Amalgamation, Consolidation or Succession
-------------------------------------------------------------
to Business.
-----------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or amalgamated, or any corporation resulting from
any merger, conversion, amalgamation or consolidation to which the Trustee shall
be a party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be eligible under Trust Indenture Act
Section 310(a) and this Article Sixth and shall have a combined capital and
surplus of at least $100,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 608 in the City of New York, without the
60
execution or filing of any paper or any further act on the part of any of the
parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided that the right to adopt
--------
the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, amalgamation, conversion or consolidation.
Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished;
61
provided, however, that if and so long as the Trustee shall be the Security
-------- -------
Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the company nor the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Securities, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act Section 313(c), a brief report dated as of such
May 15 in accordance with and to the extent required by Trust Indenture Act
Section 313(a).
Section 704. Reports by Company.
------------------
The Company shall:
(a) file with the Trustee, within 15 days after the Company is required to
file the same 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 from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company,
with the conditions and
62
covenants of this Indenture as may be required from time to time by such rules
and regulations; and
(c) transmit by mail to all Holders, as their names and addresses appear
in the Security Register, within 15 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Trust Indenture Act Section
313(c), such summaries of any information, documents and reports required to by
filed by the Company pursuant to Subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, AMALGAMATION,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Guarantor May Consolidate, Amalgamate, etc., Only
-------------------------------------------------------------
on Certain Terms.
-----------------
(a) The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer or lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, transfer, lease or disposal of
all or substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis to any other Person or group of affiliated
Persons, unless at the time and after giving effect thereto
(i) either (a) the Company shall be the continuing corporation, or
(b) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance, transfer, lease or disposition the properties and assets of the
Company, substantially as an entirety (the "Surviving Entity") shall be a
corporation duly organized and validly existing under the laws of the
United States of America, any state thereof or the District of Columbia and
shall, in either case, expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, subject to 602(c), in form
satisfactory to the Trustee, all the obligations, including the performance
of all covenants contained herein, of the Company under the Securities and
this Indenture, and this Indenture shall remain in full force and effect;
63
(ii) immediately before and immediately after giving effect to such
transaction on a pro forma basis (and treating any Indebtedness not
--- -----
previously an obligation of the Company or a Subsidiary which becomes the
obligation of the Company or any of its Subsidiaries in connection with or
as a result of such transaction as having been incurred at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a pro
---
forma basis, the Consolidated Net Worth of the Company (or the Surviving
-----
Entity if the Company is not the continuing obligor under this Indenture)
is at least equal to the Consolidated Net Worth of the Company immediately
before such transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis on the assumption that the transaction
--- -----
occurred on the first day of the four-quarter period immediately prior to
the consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation,
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) could incur $1.00 of additional Indebtedness
under Section 1008 (other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the
transactions described above, shall have by supplemental indenture
confirmed that its Guarantee of the Securities shall apply to such person's
obligations under this Indenture and the Securities; and
(vi) the Company or the Surviving Entity shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, conveyance, transfer,
lease or disposition and such supplemental indenture comply with this
Indenture.
(b) Each Guarantor, if any, (other than any Subsidiary whose Guarantee is
being released pursuant to Section 1016 as a result of such transaction), shall
not, and the Company will not permit a Guarantor to, in a single transaction or
through a series of related transactions, merge or consolidate with or into any
other corporation or other entity (other than the Company or any Guarantor), or
sell, assign, convey, transfer, lease or otherwise dispose of its properties and
assets on a Consolidated basis substantially as an entirety to any entity unless
64
(i) either (1) such Guarantor shall be the continuing corporation
or partnership or (2) the entity (if other than such Guarantor) formed by
such consolidation or into which such Guarantor is merged or the entity
which acquires by sale, assignment, conveyance, transfer, lease or
disposition the properties and assets of such Guarantor substantially as an
entirety shall be a corporation or partnership organized and validly
existing under the laws of the United States, any state thereof or the
District of Columbia and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of such Guarantor under
the Securities and this Indenture;
(ii) immediately before and immediately thereafter (and treating any
Indebtedness not previously an obligation of the Company or a Subsidiary
which becomes the obligation of the Company or any of its Subsidiaries in
connection with or as a result of such transaction as having been incurred
at the time of such transaction), no Default or Event of Default shall have
occurred and be continuing; and
(iii) such Guarantor shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with this Indenture, and
thereafter all obligations of the predecessor shall terminate.
Section 802. Successor Substitutes.
----------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture and/or
the Guarantees, if any, as the case may be, with the same effect as if such
successor had been named as the Company or such Guarantor, as the case may be,
herein and/or in the Guarantees, as the case may be. When a successor assumes
all the obligations of its predecessor under this Indenture, the Securities or a
Guarantee, as the case may be, the predecessor shall be released from those
obligations; provided that in the case of a transfer by lease, the predecessor
--------
shall not be released from the payment of principal and interest on the
Securities or a Guarantee, as the case may be.
65
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
-------
Without the consent of any Holders, the Company and the Guarantors, if any,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee, in form and
substance satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor, and the assumption by any such successor of the covenants of the
Company or such Guarantor herein and in the Securities and in any Guarantee;
(b) to add to the covenants of the Company or any Guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred upon
the Company or any Guarantor, as applicable, herein, in the Securities or in any
Guarantee;
(c) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or in any
Guarantee, or to make any other provisions with respect to matters or questions
arising under this Indenture, the Securities or any Guarantee; provided that, in
--------
each case, such provisions shall not adversely affect the interests of the
Holders;
(d) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 1016;
(f) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder;
(g) to add Events of Default for the benefit of the Holders of all of the
Securities;
(h) to secure the Securities pursuant to the requirements of Section 1012
or otherwise; or
(i) to mortgage, pledge, hypothecate or grant a security interest in favor
of the Trustee for the benefit of the Holders as additional security for the
payment and performance of the Indenture Obligations, in any property or assets,
including any which are required to be mortgaged, pledged or hypothecated, or in
which a security interest is required to be granted to the Trustee pursuant to
this Indenture or otherwise.
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
-------
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company, each Guarantor, if any, and the Trustee, the Company, and each
Guarantor (if a party thereto) when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee in form and
substance satisfactory to the Trustee for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders under this
Indenture, the Securities or any Guarantee; provided, however, that no such
-------- -------
supplemental indenture, agreement or instrument shall, without the consent of
the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption or required purchase
thereof, or change the coin or currency in which the principal of any Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate a Change in Control Offer in accordance with Section 1018 or an Offer
in accordance with Section 1015, including amending, changing or modifying any
of the definitions related thereto for purposes of such provisions;
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain Defaults
hereunder and their consequences provided for in this Indenture or with respect
to any Guarantee;
67
(d) modify any of the provisions of this Section or Section 513 or 1020,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of their rights
and obligations under this Indenture; or
(f) modify any of the provisions of this Indenture relating to the
subordination of the Securities or any Guarantee in a manner adverse to the
Holders thereof.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of a Board Resolution authorizing the execution of any
such supplemental indenture or guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall join with
the Company and each Guarantor in the execution of such supplemental indenture
or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture, agreement or instrument is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture, agreement or instrument which affects the
Trustee's own rights, duties or immunities under this Indenture, any Guarantee
or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith,
68
and such supplemental indenture shall form a part of this Indenture for all
Purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and each Guarantor, if any, and authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
Section 907. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under Article
Twelve, or any definitions or provisions related thereto, or the Guarantees of
any Holder of Senior Indebtedness unless the requisite Holders of each issue of
Senior Indebtedness affected thereby shall have consented to such supplemental
indenture.
Section 908. Record Date.
-----------
If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
but shall not be obligated to, fix a record date for the purpose of determining
the Holders entitled to consent to any supplemental indenture, agreement or
instrument or any waiver, and shall promptly notify the Trustee of any such
record date. If a record date is fixed those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such supplemental indenture, agreement or instrument or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. The record date shall be a date
no more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such
69
solicitation is completed. No such consent shall be valid or effective for more
than 90 days after such record date and no action shall be taken in respect of
such consent after such 90 day period.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of, premium, if any,
and interest on the Securities in accordance with the terms of the Securities
and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
So long as any of the Securities remain outstanding, the Company will
maintain in the City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company initially appoints State Street Bank and Trust Company, N.A., at its
office at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its office or agency for
each of said purposes. The Company will give prompt written notice to the
Trustee of any change in the location of any 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 office of the agent
of the Trustee described above and the Company hereby appoints such agent as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of the City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; 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 City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such office or agency.
70
Section 1003. Money for Security Payments to be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, premium, if any, or interest on any
of the Securities, segregate and hold in trust for the benefit of the Holders
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
If the Company is not acting as Paying Agent, the company will, on or
before each due date of the principal of, premium, if any, or interest on, any
Securities, deposit with a Paying Agent a sum in same day funds sufficient to
pay the principal, premium, if any, or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor
(or any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying
71
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
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
promptly be paid to the Company on Company 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 promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight and Section 1018, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, the failure to pay or
discharge of which would have a material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and its
Subsidiaries taken as one enterprise; provided, however, that the Company shall
-------- -------
not be required to pay or cause to be paid or discharged any such tax,
assessment or governmental charge whose amount, applicability or validity is
being contested in good faith by appropriate proceedings properly instituted and
diligently conducted and in respect of which appropriate reserves (in the good
faith judgment of management of the Company) are being maintained in accordance
with GAAP consistently applied.
72
Section 1006. Maintenance of Properties.
-------------------------
The Company will cause all properties owned or leased by the Company or any
Subsidiary or used or held for use in the conduct of its busineSs or the
business of any Subsidiary to be maintained and kept in good condition and
repair (ordinary wear and tear excepted) as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this Section
-------- -------
shall prevent the Company from (i) discontinuing the use, operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Board of Directors of the Company or the Subsidiary concerned, or of any
officer (or other agent employed by the Company or any Subsidiary) having
managerial responsibility for any such property, desirable in the conduct of its
business or the business of any Subsidiary or (ii) selling any properties;
provided that the proceeds of such sale shall be applied in accordance with
Section 1015, if applicable.
Section 1007. Insurance.
---------
The Company shall provide or cause to be provided for itself and any
Subsidiaries insurance (including appropriate self-insurance), with insurers
believed by the Company to be responsible, against loss or damage of the kinds
customarily insured against by Persons similarly situated and owning like
properties in the same general areas in which the Company or such Subsidiaries
operate, unless such failure to provide or cause to be provided such insurance
could not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the Company
and its subsidiaries taken as one enterprise.
Section 1008. Limitation on Indebtedness.
--------------------------
The Company will not, and will not permit any of its Subsidiaries to,
crate, incur, assume, or directly or indirectly guarantee or in any other manner
become directly or indirectly liable for the payment of, any Indebtedness
(including any Acquired Indebtedness and the liquidation value of any
outstanding Permitted Preferred Stock but excluding Permitted Indebtedness)
unless the Company's Consolidated Fixed Charge Coverage Ratio for the four full
fiscal quarters immediately preceding such event, taken as one period, and after
given pro forma effect to (i) the incurrence of such Indebtedness and (if
--- -----
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred at the
beginning of such four-quarter period; (ii) the incurrence, repayment or
retirement of any other Indebtedness by the Company and its Subsidiaries since
the first day of such four-quarter period as if such Indebtedness was
73
incurred, repaid or retired at the beginning of such four-quarter period (except
that, in making such computation, the amount of Indebtedness under any revolving
credit facility shall be computed based upon the average daily balance of such
Indebtedness during such four-quarter period); and (iii) any acquisition or
disposition by the Company or any Subsidiaries of any assets or any Person out
of the ordinary course of business, whether by merger, stock purchase or sale,
or asset purchase or sale, as if such acquisition or disposition occurred at the
beginning of such four-quarter period, including the Consolidated Net Income for
such period related to the Person or assets acquired or disposed by the Company
or such Subsidiary, is at least equal to the ratios set forth below during the
Fiscal Years indicated below:
Fiscal Year Ratio
----------- -----
1994.............................. 1.85:1.00
1995.............................. 2.00:1.00
1996 and thereafter............... 2.15:1.00
Section 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Subsidiary to, directly
or indirectly:
(i) declare or pay any dividend on, or make any distribution to Holders
of, any Capital Stock of the Company (other than dividends or distributions
payable solely in shares of Qualified Capital Stock of the Company or in
options, warrants or other rights to acquire Qualified Capital Stock of the
Company);
(ii) purchase, redeem, defease or otherwise acquire or retire for value any
Capital Stock of the Company or any option, warrant or other right to acquire
such Capital Stock of the Company;
(iii) make any principal payment on, or redeem, repurchase, defease or
otherwise acquire or retire for value, prior to any scheduled repayment, or
maturity, any Subordinated Indebtedness or Pari Passu Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Subsidiary to any Person other than the Company or any of its Wholly
Owned Subsidiaries (other than dividends or distributions by any Subsidiary to
all Holders of Capital Stock or such Subsidiary on a pro rata basis) or
purchase, redeem, defease or otherwise acquire for value any Capital Stock of
any Subsidiary held by any Person (other than the Company or any of its Wholly
Owned Subsidiaries) or any warrants, rights or options to purchase or acquire
any such outstanding Capital Stock; or
74
(v) make any Investment in any Person (other than any Permitted
Investment) unless the Person will thereby become a Wholly Owned Subsidiary;
(any of the foregoing payments or other actions described in (i) through (v),
collectively, "Restricted Payments") unless at the time of and after giving
effect to the proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing and such
Restricted Payment shall not be an event which is, or after notice or lapse of
time or both, would be, an "event of default" under the terms of any
Indebtedness of the Company or any Subsidiary; (2) immediately before and
immediately after giving effect to such transaction on a pro forma basis, the
Company could incur $1.00 of additional Indebtedness under the provisions of
Section 1008 (other than Permitted Indebtedness); and (3) the aggregate amount
of all Restricted Payments declared or made after the date of this Indenture
shall not exceed the sum of
(A) 50% of the Consolidated Net Income of the Company accrued on a
cumulative basis during the period beginning on the date of this Indenture and
ending on the last day of the Company's last fiscal quarter ending prior to the
date of such proposed Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss);
(B) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any of its
Subsidiaries) of shares of Qualified Capital Stock or any options or warrants to
purchase such shares of Qualified Capital Stock of the Company (except, in each
case, to the extent such proceeds are used for the purposes described in clause
(ii) of the following paragraph (b));
(C) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company as capital contributions to the Company;
(D) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company (other than from any of its Subsidiaries) upon the
exercise of any options or warrants to purchase shares of Qualified Capital
Stock of the Company; and
(E) the amount of which Indebtedness of the Company is reduced upon any
conversion or exchange of Indebtedness of the Company into Qualified Capital
Stock of the Company plus the aggregate cash received by the Company at the time
of such conversion or exchange.
75
(b) None of the foregoing provisions shall be deemed to prohibit the
following Restricted Payments so long as in the case of clauses (ii), (iv) and
(vi) there is no Default or Event of Default continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration, such payment would be
permitted by the provisions of the preceding paragraph (a) and such payment
shall be deemed to have been paid on such date of declaration for purposes of
the calculation required by the provisions of the foregoing paragraph;
(ii) the redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of the Company, Subordinated Indebtedness
or Pari Passu Indebtedness in exchange for, or out of the net proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary) of shares
of Qualified Capital Stock of the Company; provided that any net proceeds from
--------
the issue and sale of such Qualified Capital Stock are excluded from clause 3(B)
of paragraph (a) above;
(iii) the repurchase of the PIP Options in accordance with the terms of the
PIP Options in an aggregate amount not to exceed $5,000,000, upon the death,
disability or involuntary or voluntary termination of employment of employees of
the Company;
(iv) the payment of dividends on the Series C Preferred Stock and the
Series D Preferred Stock, each in accordance with the terms of the certificates
of designation for such Preferred Stock;
(v) the exchange by NME of up to $63,300,000 in liquidation value of
Series D Preferred Stock in connection with the exercise of the Warrants held by
NME; and
(vi) the redemption, repurchase, or other acquisition or retirement of Pari
Passu Indebtedness or Subordinated Indebtedness of the Company (other than
Redeemable Capital Stock) made by exchange for, or out of the proceeds of the
substantially concurrent sale of, new Pari Passu Indebtedness or Subordinated
Indebtedness of the Company so long as (A) the principal amount of such new Pari
Passu Indebtedness or Subordinated Indebtedness does not exceed the principal
amount of the Pari Passu Indebtedness or Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value (plus the amount of any
premium required to be paid under the terms of the instrument governing the Pari
Passu Indebtedness or Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender offer
or privately negotiated transactions and, in each case, actually paid, plus the
amount of
76
expenses of the Company incurred in connection with such refinancing), (B) in
the case of the redemption, repurchase, or other acquisition or retirement of
Subordinated Indebtedness, such new Indebtedness is subordinated to Senior
Indebtedness and the Securities at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired
for value, (C) in the case of the redemption, repurchase or other acquisition or
retirement of Pari Passu Indebtedness, such new Indebtedness shall be pari passu
---- -----
in right of payment with the Securities or shall be Subordinated Indebtedness,
(D) any such Subordinated Indebtedness has a Stated Maturity for its final
scheduled principal payment later than the Stated Maturity for the final
scheduled principal payment of the Securities and an Average Life to Stated
Maturity greater than the remaining Average Life to Stated Maturity of the
Securities and (E) any such Pari Passu Indebtedness has a Stated Maturity for
its final scheduled principal payment later than or equal to the Stated Maturity
for the final scheduled principal payment of the Notes and an Average Life to
Stated Maturity greater than or equal to the remaining Average Life to Stated
Maturity of the Notes.
The actions described in clauses (i), (ii), (iii), (iv) and (v) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of paragraph (a)
and the actions described in clause (vi) of this paragraph (b) shall be
Restricted Payments that shall be permitted to be taken in accordance with this
paragraph (b) and shall not reduce the amount that would otherwise be available
for Restricted Payments under clause (3) of paragraph (a).
Section 1010. Limitation on Preferred Stock of Subsidiaries.
---------------------------------------------
The Company will not permit any Subsidiary to issue any Preferred Stock
other than Preferred Stock (collectively, "Permitted Preferred Stock") to be
issued (i) to the Company or a Wholly Owned Subsidiary, or (ii) to any Person
(other than the Company or a Wholly Owned Subsidiary) provided that at the time
of such issuance a Subsidiary would be entitled to create, incur or assume
Indebtedness pursuant to Section 1008 in the aggregate principal amount equal to
the aggregate liquidation value, plus any accrued dividends, of the Preferred
Stock to be issued. The Company will not sell, transfer or otherwise dispose of
Preferred Stock issued by a Subsidiary or permit a Wholly Owned Subsidiary to
sell, transfer or otherwise dispose of Preferred Stock issued by a Subsidiary,
other than (i) to the Company or a Wholly Owned Subsidiary, as the case may be,
or (ii) to any Person (other than the Company or a Wholly Owned Subsidiary),
provided that at the time of such sale, transfer or disposition a Subsidiary
would be
77
entitled to create, incur or assume Indebtedness pursuant to Section 1008 hereof
in the aggregate amount equal to the aggregate liquidation value, plus any
accrued dividends, of the Preferred Stock to be sold, transferred or otherwise
disposed of. Notwithstanding the foregoing, nothing set forth in this covenant
will prohibit the ownership of Preferred Stock issued by a Person prior to the
time (A) such Person becomes a Subsidiary of the Company, (B) such Person merges
with or into a Subsidiary of the Company or (C) a Subsidiary of the Company
merges with or into such Person; provided, further, that such Preferred
-------- -------
Stock was not issued or incurred by such Person in anticipation of a transaction
contemplated by subclause (A), (B), or (C) above.
Section 1011. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Subsidiaries.
----------------------
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction of any kind, on the ability of any Subsidiary to (i)
pay dividends or make any other distribution on its Capital Stock to the Company
or any other Subsidiary, (ii) pay any Indebtedness owed to the Company or any
other Subsidiary, (iii) make any Investment in the Company or any other
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Subsidiary, except (a) any encumbrance or restriction existing under or by
reason of applicable law; (b) any encumbrance or restriction existing under or
by reason of customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Subsidiary; (c) any encumbrance or
restriction pursuant to an agreement in effect at or entered into on the date of
this Indenture as set forth in an Officers' Certificate dated the date hereof
delivered to the Trustee; (d) any encumbrance or restriction, with respect to a
Subsidiary that is not a Subsidiary on the date of this Indenture, in existence
at the time such Person becomes a Subsidiary or created on the date it becomes a
Subsidiary and not incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary; and (e) any encumbrance or restriction existing
under any agreement that extends, renews, refinances or replaces the agreements
containing the encumbrances or restrictions in the foregoing clauses (c) and
(d), provided that the terms and conditions of any such encumbrances or
--------
restrictions are not materially less favorable to the Holders of the Securities
than those under or pursuant to the agreement evidencing the Indebtedness so
extended, renewed, refinanced or replaced (in the opinion of the Board of
Directors of the Company whose determination shall be evidenced by a Board
Resolution).
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Section 1012. Limitation on Liens Securing Pari Passu and Subordinated
--------------------------------------------------------
Indebtedness.
------------
The Company will not, and will not permit any Subsidiary to, create, incur,
assume or suffer to exist any Liens of any kind upon any of their respective
assets or properties now owned or acquired after the date of this Indenture or
any income or profits therefrom securing (i) any Indebtedness of the Company
which is expressly by its terms subordinate or junior in right of payment to any
other Indebtedness of the Company, unless the Securities are equally and ratably
secured; provided that, if such Indebtedness which is expressly by its terms
--------
subordinate or junior in right of payment to any other Indebtedness of the
Company is Subordinated Indebtedness, the Lien securing such subordinated or
junior Indebtedness shall be subordinate and junior to the Lien securing the
Securities with the same relative priority as such subordinated or junior
Indebtedness shall have with respect to the Securities, or (ii) any assumption,
guarantee or other liability of any Subsidiary in respect of any Indebtedness of
the Company which is expressly by its terms subordinate or junior in right of
payment to any other Indebtedness of the Company, unless the substantially
similar assumption, guarantee or other liability of such Subsidiary in respect
of the Securities is equally and ratably secured; provided that, if such
--------
subordinated Indebtedness is expressly by its terms subordinate or junior to the
Securities, then the Lien securing the assumption, guarantee or other liability
of such Subsidiary in respect of such subordinated or junior Indebtedness shall
be subordinate and junior to the Lien securing the Securities or securing the
assumption, guarantee or other liability of such Subsidiary in respect of the
Securities, with the same relative priority as such subordinated or junior
Indebtedness shall have with respect to the Securities; provided, further, that
-------- -------
clauses (i) and (ii) shall not be applicable to any Lien securing Acquired
Indebtedness, which Lien is in existence at the time of such transaction or
incurrence of such Acquired Indebtedness (and was not created in connection
with, or in contemplation of, the incurrence of such Indebtedness by the Company
or any Subsidiary), which Indebtedness is permitted under the provisions of
Section 1008, and so long as such Liens do not extend to or cover any property
or assets of the Company or any Subsidiary other than the property or assets
acquired in such transaction or securing such Acquired Indebtedness.
Section 1013. Provision of Financial Statements.
---------------------------------
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
79
pursuant to such Sections 13(a) of 15(d) if the Company were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required to
file such documents if the Company were so subject. The Company will also in
any event within 15 days of each Required Filing Date file with the Trustee and
provide to the Holders of the Securities copies of the annual reports, quarterly
reports and other documents which the Company is required or permitted to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act.
Section 1014. Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or suffer to exist any transaction or series
of related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of the
Company (other than the Company or a Wholly Owned Subsidiary) unless (i) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party, (ii) with respect to a transaction or series of related
transactions involving payments in excess of $1,000,000 in the aggregate, the
Company delivers an Officers' Certificate to the Trustee certifying that (x)
such transaction or series of related transactions complies with claus. (i)
above and (y) such transaction or series of related transactions shall have been
approved by a majority of the Board of Directors of the Company and (iii) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $10,000,000, such transaction or series of related
transactions shall have been approved by a Majority of the independent directors
of the Board of Directors of the Company; provided, however, that the foregoing
-------- -------
restriction shall not apply to (a) any transaction resulting from any agreement
entered into prior to the date of this Indenture, (b) the payment of reasonable
and customary regular fees to directors of the Company or any of its
Subsidiaries who are not employees of the Company or any Affiliate or (c)
payments or distributions in accordance with the Company's employee compensation
and other benefit arrangements.
Section 1015. Disposition of Proceeds of Asset Sales.
--------------------------------------
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Asset Sale unless the Company or such
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value of the shares or assets subject to such Asset Sale (as
determined by the
80
Board of Directors of the Company and evidenced in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are not
required to be applied to permanently repay any outstanding Senior Indebtedness,
or the Company determines not to apply such Net Cash Proceeds to the permanent
prepayment of such Senior Indebtedness, or if no such Senior Indebtedness is
outstanding, then the Company may within one year of the Asset Sale invest (or
enter into a legally binding agreement to invest) the Net Cash Proceeds in
properties and assets that (as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution) replace
the properties and assets that were the subject of the Asset Sale or in
properties and assets that will be used in the businesses of the Company or its
Wholly Owned Subsidiaries existing on the date of this Indenture or in a
business reasonably related thereto; provided that, in the case of any such
--------
legally binding agreement to invest, the Company makes such investment pursuant
to such legally binding agreement within 18 months of the Asset Sale. The
amount of such Net Cash Proceeds neither used to permanently repay or prepay
Senior Indebtedness nor used or invested as set forth in this paragraph
constitutes "Excess Proceeds."
(c) Subject to paragraph (f) below, when the aggregate amount of Excess
Proceeds equals $17,500,000 or more, the Company shall apply the Excess Proceeds
to the repayment of the Securities and any Pari Passu Indebtedness required to
be repurchased under the instrument governing such Pari Passu Indebtedness as
follows: (a) the Company shall make an offer to purchase (an "Offer") from all
Holders of the Securities in accordance with the procedures set forth in this
Indenture in the maximum principal amount (expressed as a multiple of $1,000) of
Securities that may be purchased out of an amount (the "Securities Amount")
equal to the product of such Excess Proceeds multiplied by a fraction, the
numerator of which is the outstanding principal amount of the Securities, and
the denominator of which is the sum of the outstanding principal amount of the
Securities and such Pari Passu Indebtedness (subject to proration in the event
such amount is less than the aggregate Offered Price (as defined herein) of all
Securities tendered) and (b) to the extent required by such Pari Passu
Indebtedness to permanently reduce the principal amount of such Pari Passu
Indebtedness, the Company shall make an offer to purchase Pari Passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt Amount")
equal to the excess of the Excess Proceeds over the Securities Amount, provided
--------
that in no event shall the Pari Passu Debt Amount exceed the principal amount of
such Pari Passu Indebtedness plus the amount of any premium required to be paid
to repurchase such Pari Passu Indebtedness. The offer price shall be payable in
cash in an amount equal to 100% of the principal amount
81
of the Securities plus accrued and unpaid interest, if any, to the date such
Offer is consummated (the "Offered Price") in accordance with the procedures set
forth in this Indenture. To the extent that the aggregate amount of the
Securities tendered and Pari Passu Indebtedness repurchased pursuant to an Offer
and Pari Passu Offer, respectively, is less than the amount of Excess Proceeds,
the Company may use such deficiency in the business of the company or its Wholly
Owned Subsidiaries or in a business reasonably related thereto. Upon completion
of the purchase of all the Securities tendered pursuant to an Offer or
repurchase of the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the
amount of Excess Proceeds shall be reset at zero.
(d) Whenever the Excess Proceeds received by the Company or its
Subsidiaries exceed $5,000,000, such Excess Proceeds shall be set aside by the
Company in a separate account pending (i) deposit with the Trustee or a Paying
Agent of the amount required to purchase the Securities tendered in an Offer or
a Pari Passu Offer, (ii) delivery by the Company of the Offered Price to the
Holders of the Securities tendered in an Offer or a Pari Passu Offer and (iii)
application, as set forth above, of Excess Proceeds for the purposes specified
in paragraph (b) above. Such Excess Proceeds may be invested at the written
direction of the Company in Temporary Cash Investments, provided that the
--------
maturity date of any investment made after the amount of Excess Proceeds exceeds
$17,500,000 shall not be later than the Offer Date. The Company shall be
entitled to any interest or dividends accrued, earned or paid on such Temporary
Cash Investments, provided that the Company shall not be entitled to such
--------
interest if a Default or Event of Default has occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant to clause
(c) above, the Securities shall be purchased by the Company, at the option of
the Holder thereof, in whole or in part in integral multiples of $1,000, on a
date (the "Purchase Date") that is not earlier than 30 days and not later than
60 days from the date the notice is given to Holders, or such later date as may
be necessary for the Company to comply with the requirements under the Exchange
Act, subject to proration in the event the Securities Amount is less than the
aggregate Offered Price of all Securities tendered.
(f) In the event that the Company shall be unable to purchase Securities
from Holders thereof in an Offer because of the provisions (i) of applicable law
or (ii) of the Company's loan agreements, indentures or other contracts in
existence on the date of this Indenture, the Company need not make an Offer. The
Company shall then be obligated to (i) invest the Excess Proceeds in properties
and assets to replace the properties and assets that were the subject of the
Asset Sale or in properties and assets that
82
(as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) will be used in the business of
the Company or its Wholly Owned Subsidiaries existing on the date of this
Indenture or in any business reasonably related thereto or (ii) apply the Excess
Proceeds to repay Senior Indebtedness.
(g) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, in connection with an Offer.
(h) The Company will not, and will not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of this Indenture or
(ii) any Senior Indebtedness existing on the date of this Indenture or
thereafter, provided that, in each case, such restrictions are no less favorable
--------
to the Holders of Securities than those existing on the date of this Indenture)
that would materially impair the ability of the Company to Make an Offer to
purchase the Securities upon an Asset Sale or, if such Offer is made, to pay for
the Securities tendered for purchase.
(i) Within 30 days after the date on which the amount of Excess Proceeds
equals or exceeds $17,500,000, the Company shall send by first-class mail,
postage prepaid, to the Trustee and to each Holder of the Securities, at his
address appearing in the Security Register, a notice stating or including:
(1) that the Holder has the right to require the Company to
repurchase, subject to proration, such Xxxxxx's Securities at the Offered
Price;
(2) the Purchase Date;
(3) the instructions a Holder must follow in order to have its
Securities purchased in accordance with paragraph (c) of this Section; and
(4) (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on
Form 8-K of the Company filed subsequent to such Quarterly Report, other
than Current Reports describing Asset Sales otherwise described in the
offering materials (or corresponding successor reports) (or in the event
the Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 1013), (ii) a
description of material developments in the Company's business subsequent
to the date of the latest
83
of such Reports, (iii) if material, appropriate pro forma financial
information, and (iv) such other information, if any, concerning the
business of the Company which the Company in good faith believes will
enable such Holders to make an informed investment decision.
(j) Holders electing to have Securities purchased will be required to
surrender such Securities to the Company at the address specified in the notice
at least two Business Days prior to the Purchase Date. An election may be
withdrawn before or after delivery by the Holder to the Paying Agent at the
office of the Paying Agent of the Security to which such an election relates, by
means of a written notice of withdrawal delivered by the Holder to the Paying
Agent at the office of the Paying Agent or to the office or agency referred to
in Section 1002 to which the related notice was delivered at any time prior to
the close of business on the Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original notice of the Offer and that has been or will be delivered for
purchase by the Company.
Holders will be entitled to withdraw their election if the Company receives, not
later than three Business Days prior to the Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Securities delivered for purchase by the Holder as to
which his election is to be withdrawn and a statement that such Xxxxxx is
withdrawing his election to have such Securities purchased.
(k) Not later than the Purchase Date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Offer, (ii)
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money in same day funds (or New York Clearing House funds if such
deposit is made prior to the Purchase Date) sufficient to pay the aggregate
Offered Price of all the Securities or portions thereof which are to be
purchased on that date and (iii) deliver to the Paying Agent Officers'
Certificate stating the securities or portions thereof accepted for payment by
the Company.
84
As provided in the Securities, the Trustee and the Paying Agent shall
return to the company any cash that remains unclaimed, together with interest or
dividends, if any, thereon, held by them for the payment of the Offered Price;
provided, however, that, to the extent that the aggregate amount of cash
-------- -------
deposited by the Company with the Trustee in respect of an Offer exceeds the
aggregate Offered Price of the Securities or portions thereof to be purchased,
then the Trustee shall hold such excess for the Company and promptly after the
Business Day following the Purchase Date the Trustee shall upon demand return
any such excess to the Company.
(l) Securities to be purchased shall, on the Purchase Date, become due and
payable at the Offered Price and from and after such date (unless the Company
shall default in the payment of the Offered Price) such Securities shall cease
to bear interest. Such Offered Price shall be paid to such Holder promptly
following the later of the Business Day following the Purchase Date and the time
of delivery of such Security to the relevant Paying Agent at the office of such
Paying Agent by the Holder thereof in the manner required. Upon surrender of
any such Security for purchase in accordance with the foregoing provisions, such
Security shall be paid by the Company at the Offered Price; provided, however,
-------- -------
that installments of interest whose Stated Maturity is on or prior to the
Purchase Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 307; provided, further,
-------- -------
that Securities to be purchased are subject to proration in the event the
Securities Amount is less than the aggregate Offered Price of all Securities
tendered for purchase, with such adjustments as may be appropriate by the
Trustee so that only Securities in denominations of $1,000 or integral multiples
thereof, shall be purchased. If any Security tendered for purchase shall not be
so paid upon surrender thereof, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Purchase Date at the rate
borne by such Security. Any Security that is to be purchased only in part shall
be surrendered to a Paying Agent at the office of such Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Xxxxxx's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, one or more new
Securities of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
85
Section 1016. Limitation on Issuance of Guarantees of Pari Passu and
------------------------------------------------------
Subordinated Indebtedness.
-------------------------
(a) The Company will not permit any Subsidiary, directly or indirectly, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company that is expressly by its terms subordinate or junior
in right of payment to any other Indebtedness of the Company unless (i) such
Subsidiary simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a guarantee of payment of the Securities by such
Subsidiary and (A) if any such assumption, guarantee or other liability is
subordinated, the guarantee under the supplemental indenture shall be
subordinated to no more than the extent that the Securities are subordinated to
Senior Indebtedness of the Company under this Indenture and (B) if such
subordinated or junior Indebtedness is expressly subordinated or junior to the
Securities, any such assumption, guarantee or other liability of such Subsidiary
with respect to such subordinated or junior Indebtedness shall be subordinated
to such Subsidiary's assumption, guarantee or other liability with respect to
the Securities to at least the same extent as such subordinated or junior
Indebtedness is subordinated or junior to the Securities under this Indenture;
and (ii) such Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Subsidiary as a
result of any payment by such Subsidiary under its Guarantee (as defined below).
(b) Each guarantee created pursuant to the provisions described in the
foregoing paragraph is referred to as a "Guarantee" and the issuer of each such
Guarantee is referred to as a "Guarantor." Notwithstanding the foregoing, any
Guarantee by a Subsidiary of the Securities shall provide by its terms that it
(together with any Liens arising from such Guarantee) shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of the Company's Capital
Stock in, or all or substantially all the assets of, such Subsidiary, which is
in compliance with this Indenture, and (ii) in the case of any Guarantee created
pursuant to the provisions described in the foregoing paragraph, the release or
discharge of the assumption, guarantee or other liability which resulted in the
creation of such Guarantee, except a discharge or release by or as a result of
payment under such assumption, guarantee or other liability.
86
Section 1017. Limitation on Other Senior Subordinated Indebtedness.
----------------------------------------------------
The Company will not create, incur, assume, guarantee or in any other
manner become liable with respect to any Indebtedness, other than the
Securities, that is subordinate in right of payment to any Senior Indebtedness,
unless such Indebtedness is also pari passu with, or subordinate in right of
---- -----
payment to, the Securities pursuant to subordination provisions substantially
similar to those contained in this Indenture.
Section 1018. Purchase of Securities upon Change in Control.
---------------------------------------------
(a) If a Change in Control occurs at any time, each Holder shall have the
right to require that the Company repurchase such Holder's Securities pursuant
to an offer described in subsection (c) of this Section (a "Change in Control
Offer") in whole or in part in integral multiples of $1,000, at a purchase price
(the "Change in Control Purchase Price") in cash in an amount equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase, in accordance with the procedures set forth in Subsections
(b), (c), (d) and (e) of this Section.
(b) Within 30 days following a Change in Control and prior to the mailing
of the Change in Control Purchase Notice to Holders provided for in paragraph
(c) below, the Company covenants to either (1) repay in full all Indebtedness
under the New Bank Credit Agreement and permanently reduce the commitments of
the lenders thereunder or offer to repay in full all such Indebtedness and
permanently reduce the commitment of each lender who has accepted such offer or
(2) obtain the requisite consent under the New Bank Credit Agreement to permit
the repurchase of the Securities as provided for in this Section 1018. The
Company shall first comply with this subsection (b) before it shall be required
to repurchase the Securities pursuant to this Section 1018, but any failure to
comply with this subsection (b) shall constitute a default of this covenant for
purposes of Section 501(c) (iv).
(c) Within 30 days following any Change in Control, the Company shall send
by first-class mail, postage prepaid, to the Trustee and to each Holder of the
Securities, at his address appearing in the Security Register, a notice (a
"Change in Control Purchase Notice") stating or including:
(1) that a Change in Control has occurred, the date of such event,
and that such Holder has the right to require the Company to repurchase
such Xxxxxx's Securities at the Change in Control Purchase Price;
87
(2) the circumstances and relevant facts regarding such Change in
Control (including but not limited to information with respect to pro forma
--- -----
historical income, cash flow and capitalization after giving effect to such
Change in Control, if any);
(3)(i) the most recently filed Annual Report on Form 10-K including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report (or in the event the Company is not required to prepare
any of the foregoing Forms, the comparable information required to be
prepared by the Company and any Guarantor pursuant to Section 1013), (ii) a
description of material developments in the Company's business subsequent
to the date of the latest of such reports and (iii) such other information,
if any, concerning the business of the Company which the Company in good
faith believes will enable such Holders to make an informed investment
decision;
(4) that the Change in Control Offer is being made pursuant to this
Section 1018(a) and that all Securities properly tendered pursuant to the
Required Offer will be accepted for payment at the Required Offer Purchase
Price;
(5) the purchase date (the "Change in Control Purchase Date") which
shall be a Business Day no earlier than 30 days nor later than 60 days from
the date such notice is mailed;
(6) the Change in Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 1002;
(8) that Securities must be surrendered on or prior to the Change in
Control Purchase Date to the Paying Agent at the office of the Paying Agent
or to an office or agency referred to in Section 1002 to collect payment;
(9) that the Change in Control Purchase Price for any Security which
has been properly tendered and not withdrawn will be paid promptly
following the Required Offer Purchase Date; and
(10) the procedures for withdrawing a tender.
(d) Upon receipt by the Company of the proper tender of Securities, the
Holder of the Security in respect of which such proper tender was made shall
(unless the tender of such Security is
88
properly withdrawn) thereafter be entitled to receive solely the Change in
Control Purchase Price with respect to such Security. Upon surrender of any such
Security for purchase in accordance with the foregoing provisions, such Security
shall be paid by the Company at the Change in Control Purchase Price; provided,
--------
however, that installments of interest whose Stated Maturity is on or prior to
-------
the Change in Control Purchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 307. If any Security tendered for purchase shall not be so paid upon
surrender thereof, the principal thereof (and premium, if any, thereon) shall,
until paid, bear interest from the Change in Control Purchase Date at the rate
borne by such Security. Holders electing to have Securities purchased will be
required to surrender such Securities to the Paying Agent at the address
specified in the notice at least two Business Days prior to the Change in
Control Purchase Date. Any Security that is to be purchased only in part shall
be surrendered to a Paying Agent at the office of such Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Xxxxxx's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, one or more new
Securities of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
(e) Not later than the Change in Control Purchase Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change in Control Offer, (ii) no later than 11:00 a.m. (New York time) on the
Business Day following the Change in Control Purchase Date, deposit with the
Paying Agent an amount of cash sufficient to pay the aggregate Change in Control
Purchase Price of all the Securities or portions thereof that are to be
purchased as of the Change in Control Purchase Date and (iii) deliver to the
Paying Agent an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to the
Change in Control Purchase Price of the Securities purchased from each such
Holder, and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security surrendered. Any
Securities not so accepted shall be promptly mailed or delivered by the Paying
Agent at the Company's expense to the Holder thereof. The Company will publicly
announce the results of the Change in Control Offer on the Change in Control
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Purchase Date. For purposes of this section 1018, the Company shall choose a
Paying Agent which shall not be the Company.
(f) A Change in Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change in Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent or to the office or agency referred to in Section
1002 to which the related Change in Control Purchase Notice was delivered at any
time prior to the close of business on the Change in Control Purchase Date
specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted,
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted, and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Change in Control Purchase Notice and that has been or will be
delivered for purchase by the Company.
(g) As provided in the Securities, the Trustee and the Paying Agent shall
return to the Company any cash that remains unclaimed, together with interest or
dividends, if any, thereon, held by them for the payment of the Change in
Control Purchase Price; provided, however, that, to the extent that the
-------- -------
aggregate amount of cash deposited by the Company pursuant to clause (e) (ii)
exceeds the aggregate Change in Control Purchase Price of the Securities or
portions thereof to be purchased, then the Trustee shall hold such excess for
the Company and promptly after the Business Day following the Change in Control
Purchase Date the Trustee shall upon demand return any such excess to the
Company together with interest or dividends, if any, thereon.
(h) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, in connection with a Change in
Control Offer.
Section 1019. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not more
than 60 days after the end of each fiscal quarter and not more than 120 days
after the end of each Fiscal Year of the Company ending after the date hereof, a
written statement signed by the principal executive officer, principal financial
officer or
90
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has
been a Default, specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing,
or if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of the Company or any Subsidiary gives any notice to
the Company or takes any other action of which the Company has knowledge with
respect to a claimed default (other than with respect to Indebtedness in the
principal amount of less than $1,000,000), the Company shall deliver to the
Trustee by registered or certified mail or by telegram, telex or facsimile
transmission followed by hard copy an Officers' Certificate specifying such
Default, Event of Default, notice or other action within five Business Days of
its occurrence.
Section 1020. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 1005 through 1014, 1016, 1017 and 1019, if,
before or after the time for such compliance, the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
waive such compliance in such instance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Right of Redemption.
-------------------
(a) The Securities may be redeemed at the election of the Company, as a
whole or from time to time in whole or in part, at any time on or after
___________, 1998, at the option of the Company subject to the conditions and at
the Redemption Prices specified in the form of Security, together with accrued
interest to the Redemption Date.
91
(b) Up to $50,000,000 principal amount of Securities may also be redeemed
at any time on or prior to __________, 1996, within 180 days of one or more
Public Equity Offerings of the Company or any of its Subsidiaries with the net
proceeds of such Public Equity Offerings at ____________% of the aggregate
principal amount, together with accrued and unpaid interest, if any, to the
redemption date.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to Section
1101 shall be evidenced by a Company Order and an Officers' Certificate. In case
of any redemption at the election of the Company, the Company shall, not less
than 45 nor more than 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice period shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 30
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption, by lot or such other method as
the Trustee shall deem fair and appropriate, and the amounts to be redeemed may
be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and each Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
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Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal amount
of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been 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 designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.
93
Section 1106. Deposit of Redemption Price.
---------------------------
No later than 10:00 a.m. (New York time) on Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in same day funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof which
are to be redeemed on that date. All money earned on funds held in trust by the
Trustee or any Paying Agent shall be remitted to the Company.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, that installments of interest whose
-------- -------
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the rate borne by such Security.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security which is to be redeemed or purchased only in part shall be
surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 1002 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar or the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
94
unredeemed portion of the principal of the Security so surrendered that is not
redeemed or purchased.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Securities and the payment of the principal of, premium, if any, and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment as provided in this Article to the prior payment
in full of all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1202. Payment Over of Proceeds Upon Dissolution, Etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full or provision made for such payment of all amounts due on or in
respect of all Senior Indebtedness, before the Holders of the Securities are
entitled to receive any payment or distribution of any kind or character
(excluding securities of the Company or any other corporation that are equity
securities or are subordinated in right of payment to all Senior Indebtedness,
that may at the time be outstanding, to substantially the same
95
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article; such securities are hereinafter collectively referred
to as "Permitted Junior Securities") on account of principal of, premium, if
any, or interest on the Securities (including any payment or other distribution
which may be received from the holders of Subordinated Indebtedness as a result
of any payment on such Subordinated Indebtedness); and
(2) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders or the Trustee would
be entitled but for the provisions of this Article (including any payment or
other distribution which may be received from the holders of Subordinated
Indebtedness as a result of any payment on such Subordinated Indebtedness) shall
be paid by the liquidating trustee or agent or other Person making such payment
or distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or in any other form acceptable
to each, of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness;
and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities before all Senior Indebtedness is paid in
full, then and in such event such payment or distribution (excluding Permitted
Junior Securities but including any payment or other distribution which may be
received from the holders of Subordinated Indebtedness as a result of any
payment on such Subordinated Indebtedness) shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash or, as acceptable to each holder of Senior Indebtedness, any other
manner, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
96
The consolidation of the Company with, or the merger of the Company with or
into, another Person or the liquidation or dissolution of the Company following
the conveyance, transfer or lease of its properties and assets substantially as
an entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Section if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in Article Eight.
Section 1203. Suspension of Payment When Senior Indebtedness in Default.
---------------------------------------------------------
(a) Unless Section 1202 shall be applicable, upon (1) the occurrence of a
Payment Default and (2) receipt by the Trustee and the Company from a Senior
Representative of written notice of such occurrence, then no payment (other than
any payments made pursuant to Article Four which have been deposited with the
Trustee for at least 91 days) or distribution of any assets of the Company of
any kind or character (excluding Permitted Junior Securities) shall be made by
the Company on account of principal of, premium, if any, or interest on, the
Securities or on account of the purchase, redemption or other acquisition of or
in respect of the Securities unless and until such Payment Default shall have
been cured or waived or shall have ceased to exist or the Designated Senior
Indebtedness shall have been discharged or paid in full, after which the Company
shall resume making any and all required payments in respect of the Securities,
including any missed payments.
(b) Unless Section 1202 shall be applicable, upon (1) the occurrence of a
Non-payment D.fault and (2) receipt by the Trustee and the Company from a Senior
Representative of written notice of such occurrence, then no payment or
distribution of any assets of the Company of any kind or character (excluding
Permitted Junior Securities) shall be made by the Company on account of any
principal of, premium, if any, or interest on, the Securities or on account of
the purchase, redemption or other acquisition of or in respect of Securities for
a period ("Payment Blockage Period") commencing on the date of receipt by the
Trustee and the Company of such notice unless and until the earliest of (x) 179
days after receipt of such written notice by the Trustee, (y) the date such Non-
payment Default shall have been cured or waived or shall have ceased to exist or
the Senior Indebtedness
97
related thereto shall have been discharged or paid in full or (z) the date such
Payment Blockage Period shall have been terminated by written notice to the
Company or the Trustee from the Senior Representative of the holders of the
Designated Senior Indebtedness that have given notice of a Non-payment Default
at or after the initiation of such Payment Blockage Period, after which, in the
case of clause (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Securities, including any missed payments.
Notwithstanding any other provision of this Indenture, in no event shall a
Payment Blockage Period extend beyond 179 days. Not more than one Payment
Blockage with respect to the Securities may be commenced during any one period
of 365 consecutive days. No Non-payment Default with respect to the Designated
Senior Indebtedness which existed or was continuing on the date of the
commencement of any Payment Blockage Period will be, or can be, made the basis
for the commencement of a second Payment Blockage Period, whether or not within
a period of 365 consecutive days, unless such default shall have been cured or
waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent jurisdiction
shall direct.
Section 1204. Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in any of
the Securities shall prevent the Company, at any time except during the pendency
of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash,
98
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
Section 1206. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than Holders of
Senior Indebtedness and the holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1203, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 1203(c).
Section 1207. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of Company owing
99
to such Holder in the form required in such proceedings and the causing of such
claim to be approved. If the Trustee does not file a proper claim at least 30
days before the expiration of the time to file such claim, then the holders of
Senior Indebtedness, and their agents, trustees or other representatives are
authorized to do so for and on behalf of the Holders of the Securities.
Section 1208. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section, the
holders of Senior Indebtedness may, any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
-------- -------
event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities pursuant to Article
5 of this Indenture or to pursue any rights or remedies hereunder or under
applicable laws if the taking of such action does not otherwise violate the
terms of this Article, subject to the rights, if any, under this Article, of the
holders, from time to time, of Senior Indebtedness to receive the cash, property
or securities receivable upon the exercise of such rights or remedies.
100
Section 1209. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from a Senior Representative or
any trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
-------- -------
the notice provided for in this Section at least three Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security), then, anything herein contained
to the contrary notwithstanding but without limiting the rights and remedies of
the holders of Senior Indebtedness or any trustee, fiduciary or agent thereof,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of the act or
condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person representing himself
to be a Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
-------- -------
notice to the Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is
101
not furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 1210. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent.
-----
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness 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, provided that the foregoing shall apply only if such court has
--------
been fully apprised of the provisions of this Article.
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness:
-----------------------------------------------------
Preservation of Trustee's Rights.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 606.
Section 1212. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
--------
however, that Section 1211 shall not apply to the Company or any Affiliate of
-------
the Company if it or such Affiliate acts as Paying Agent.
102
Section 1213. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee or
the Holders of Securities to take any action to accelerate the maturity of the
Securities pursuant to Article Five of this Indenture or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article of the holders, from time to time, of Senior Indebtedness to
receive the cash, property or securities receivable upon the exercise of such
rights or remedies.
Section 1214. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and the Trustee shall not
be liable to any holder of Senior Indebtedness if it shall mistakenly pay over
or deliver to Holders, the Company or any other Person moneys or assets to which
any holder of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
Section 1215. Other Rights of Holders of Senior Indebtedness.
----------------------------------------------
All rights and interests under this Indenture of the holders of Senior
Indebtedness, and all agreements and obligations of the Trustee, the Holders of
the Securities and the Company under this Article shall remain in full force and
effect irrespective of (a) any lack of validity or enforceability of the New
Bank Credit Agreement, and promissory notes evidencing the New Bank Credit
Agreement or any other agreement or instrument relating thereto or to any other
Senior Indebtedness or (b) any other circumstance that might constitute a
defense available to, or a discharge of, a guarantor or surety (other than as a
result of any payments made on the New bank Credit Agreement or any other Senior
Indebtedness).
The holders of Senior Indebtedness are hereby authorized to demand specific
performance of this Article, whether or not the Company shall have complied with
any provisions of this Article applicable to it, at any time when the Trustee or
any Holder of the Securities shall have failed to comply with any of these
provisions.
103
The provisions of this Article shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by any holder of Senior
Indebtedness upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Securities herein expressly
provided for) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(a) either
(1) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Securities
for whose payment United States dollars have theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company or any Guarantor
has irrevocably deposited or caused to be deposited with the Trustee in
trust for the purpose an amount in United States dollars sufficient to pay
and discharge the entire Indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for the principal of, premium,
if any, and interest to the date of such deposit;
(b) the Company or any Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company and any Guarantor; and
(c) the Company and each Guarantor, if any, have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel
104
each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 1302 and the last paragraph of Section 1003 shall survive.
Section 1302. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1301 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on the Securities for whose payment such United
States dollars have been deposited with the Trustee.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which a Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
* * * * *
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which a Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
105
This Indenture may be signed in any number of counterparts with the same
effect as if the signatures to each counterpart were upon a single instrument,
and all such counterparts together shall be deemed an original of this
Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
THE HILLHAVEN CORPORATION
By: ______________________________
Name:
Title:
Attest: ______________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:______________________________
Name:
Title:
Attest: _______________________
Name:
Title:
106
STATE OF WASHINGTON )
) ss.:
COUNTY OF )
On the ________ day of September, 1993, before more personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he resides at __________________________________; that he is a of The Hillhaven
Corporation one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of such corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors of such corporation; and
that he signed his name thereto pursuant to like authority.
(NOTARIAL
SEAL)
STATE OF )
) ss.:
COUNTY OF )
On the ____________ day of September, 1993, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he resides at ______________; that he is __________________ of State Street
Bank and Trust Company one of the corporations described in and which executed
the above instrument; that he knows the corporate seal of such corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors of such corporation; and
that he signed his name thereto pursuant to like authority.
(NOTARIAL
SEAL)
EXHIBIT A
---------
FORM OF INTERCOMPANY AGREEMENT
------------------------------
THIS AGREEMENT, made and entered into this ______________ day of
_____________, 1993, by and among The Hillhaven Corporation, a Nevada
corporation (the "Company"), and the Subsidiaries listed on Annex A hereto (all
of the above corporations or partnerships other than the Company are referred to
individually as a Subsidiary, as such term is defined in the Indenture between
the Company and State Street Bank and Trust Company, as Trustee, dated as of
___________, 1993 (the "Indenture"), and referred to collectively as the
"Subsidiaries").
All capitalized terms used herein that are defined in, or by reference in,
the Indenture, have the meanings assigned to such terms therein, or by reference
therein, unless otherwise defined.
ARTICLE I
TERMS OF THE INTERCOMPANY LOANS
Section 1.01 The Loans. Each of the parties to this Agreement agrees that
---------
all loans and other advances (individually, a "Loan" and collectively, the
"Loans") by a party hereto (a "Lender") to another party hereto (a "Borrower")
made after the date hereof shall be made on the terms and subject to the
conditions set forth in this Agreement. For the purposes hereof, "Loans" shall
also include all intercompany loans and advances owing by the Company to any
Subsidiary outstanding on the date hereof and all Loans made after the date
hereof.
Section 1.02 Payment Terms. Each Loan subject to the terms of this
-------------
Agreement shall be payable on such terms as may be agreed upon from time to time
by the parties thereto.
Section 1.03 Interest Prepayment. (a) The interest rate ("Interest
-------------------
Rate"), if any, on a Loan shall be determined by the parties and shall be
recorded in the Ledgers (as defined below) of the Borrower and the Lender.
(b) The interest, if any, payable on each Loan shall accrue from the date
such Loan is made.
A-1
(c) The Loans may provide that if the principal or accrued interest, if
any, on a Loan is not paid on the date, when due, interest on the unpaid
principal and interest will accrue at a rate equal to the Interest Rate, if any,
plus a specified amount of basis points per annum from maturity until the
principal and interest on such Loan are fully paid.
(d) The Loans may provide for prepayment at the option of the Borrower.
Section 1.04 Subordination. Subject to Section 3.01, all Loans made to
-------------
the Company or any Guarantor, in either case, by a Wholly Owned Subsidiary shall
be subordinated in right of payment to the payment and performance of the
obligations of the Company and any Guarantor under the Indenture, the
Securities, the Guarantees or any other Indebtedness ranking senior to or pari
----
passu with the Securities.
-----
ARTICLE II
COVENANTS
Section 2.01 Maintenance of Ledger. Each Borrower and Lender shall
---------------------
maintain, in accordance with generally accepted accounting principles
consistently applied, a loan account in their general ledgers or other financial
records (the "Ledgers") and each Loan (including the Interest Rate, if any) when
made shall be promptly evidenced by a book-entry in such Ledgers. The Ledgers
shall also indicate the date on which any repayment or prepayment of principal
or accrued interest, if any, on a Loan is made and the amount of such repayment
or prepayment.
Section 2.02 Additional Subsidiaries. The Company agrees to cause any
-----------------------
entity which becomes a Subsidiary after the date hereof to become a party to
this Agreement on the date that the Company or a Subsidiary creates or acquires
such Subsidiary by executing an amendment to this Agreement pursuant to which
such Subsidiary agrees to be bound by the terms hereof as if an original party
hereto.
Section 2.03 Separate Evidence of Intercompany Debt Obligations. Any
--------------------------------------------------
intercompany debt obligation may be evidenced by a promissory note, agreement or
other instrument, provided that any such promissory note, agreement or other
--------
instrument entered into after the date hereof if it evidences a Loan to the
Company from a Wholly Owned Subsidiary incorporates by reference all of the
terms of this Agreement and is not inconsistent with the terms hereof.
A-2
ARTICLE III
REPAYMENT PROVISIONS
Section 3.01 Repayment Provisions. If after the date of issuance of a
--------------------
Loan (i) a Default or Event of Default has occurred and is continuing under the
Indenture or (ii) a Default or Event of Default under the New Bank Credit
Agreement (as defined) shall have occurred and be continuing, then any Loans
made to the Company by any Wholly Owned Subsidiary shall not be payable;
provided, however, that if any such Default or Event of Default under the
-------- -------
Indenture or the New Bank Credit Agreement has been waived, cured or rescinded,
such Loans may be paid. Any Lender that is a Wholly Owned Subsidiary hereby
agrees that if it receives from the Company any payments or distributions on any
Loan in violation of the prior sentence after any Default or Event of Default
under the Indenture or the New Bank Credit Agreement has occurred, is continuing
and has not been waived, cured or rescinded, it will pay over and deliver
forthwith to the Company, all such payments and distributions.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, or consent to depart therefrom, which in any such case could
adversely affect the Holders of the Securities, is permitted at any time for any
reason, except for (i) an amendment required under Section 2.02 or (ii) with the
consent of the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities.
Section 4.02 Termination; Release. This Agreement shall expire upon (i)
--------------------
the discharge of the Company's and each of the Guarantor's obligations under the
Indenture or (ii) the Company's election to defuse its obligations under the
Indenture with respect to all Outstanding Securities in accordance with Section
402 or 403 of the Indenture. A Subsidiary shall be released from its
obligations under this Agreement upon (x) its merger into another Subsidiary or
the Company or (y) the sale, exchange or transfer by consolidation, merger or
otherwise, to any Person not an Affiliate of the Company of all the Company's
stock in, or all or substantially all of the assets of, such Subsidiary which is
in compliance with the Indenture.
A-3
Section 4.03 Assignment. No party to this Agreement may assign, in whole
----------
or in part, any of its rights and obligations under this Agreement, except to
its legal successor in interest.
Section 4.04 Third Party Beneficiaries. The Holders of the Securities,
-------------------------
shall be third party beneficiaries of this Agreement; provided that only the
--------
Trustee (on behalf of the Holders of the Securities) shall have the right to
enforce this Agreement against the Company and the Subsidiaries.
Section 4.05 Headings. Article and Section headings in this Agreement are
--------
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
Section 4.06 Execution of Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 4.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 4.08 Waivers. The maker of any loan hereunder hereby waives
-------
presentment, demand for payment, notice of protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
thereof.
A-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE HILLHAVEN CORPORATION
By_________________________________
Name:
Title:
FIRST HEALTHCARE CORPORATION
By_________________________________
Name:
Title:
MEDISAVE PHARMACIES INC.
By_________________________________
Name:
Title:
Each of the Corporations listed on
Schedule A
By_________________________________
Name:
Title:
A-5
SCHEDULE I
INDEBTEDNESS OF THE COMPANY AND ITS SUBSIDIARY
(Excluding Attributable Debt)
AS OF ____________, 1993
