EXHIBIT 4.1
EXECUTION COPY
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HH ACQUISITION CORP.,
AS ISSUER
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
AS TRUSTEE,
______________________
INDENTURE
DATED AS OF JULY 31, 1998
_______________________
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
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CROSS-REFERENCE TABLE
TIA Section Indenture
----------- ---------
310 (a) (1) ...................................... 7.10
(a) (2) ...................................... 7.10
(a) (3) ...................................... N.A.
(a) (4) ...................................... N.A.
(b) ...................................... 7.08; 7.10
(c) ...................................... N.A.
311 (a) ...................................... 7.11
(b) ...................................... 7.11
(c) ...................................... N.A.
312 (a) ...................................... 2.04
(b) ...................................... 13.03
(c) ...................................... 13.03
313 (a) ...................................... 7.06
(b) (1) ...................................... N.A.
(b) (2) ...................................... 7.06
(c) ...................................... 13.02
(d) ...................................... 7.06
314 (a) ...................................... 4.02; 4.09
(b) ...................................... N.A.
(c) (1) ...................................... 13.04
(c) (2) ...................................... 13.04
(c) (3) ...................................... 13.04
(d) ...................................... N.A.
(e) ...................................... 13.05
(f) ...................................... N.A.
315 (a) ...................................... 7.01
(b) ...................................... 7.05; 13.02
(c) ...................................... 7.01
(d) ...................................... 7.01
(e) ...................................... 6.11
316 (a) (last sentence) ...................................... 13.06
(a) (1) (A) ...................................... 6.05
(a) (1) (B) ...................................... 6.04
(a) (2) ...................................... N.A.
(b) ...................................... 6.07
317 (a) (1) ...................................... 6.08
(a) (2) ...................................... 6.09
(b) ...................................... 2.05
318 (a) ...................................... 13.01
N.A. means Not Applicable
______________________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions............................................................................. 1
SECTION 1.02. Other Definitions....................................................................... 26
SECTION 1.03. Incorporation by Reference of Trust Indenture Act....................................... 27
SECTION 1.04. Rules of Construction................................................................... 27
ARTICLE II
THE SECURITIES
SECTION 2.01. Form and Dating......................................................................... 28
SECTION 2.02. Restrictive Legends..................................................................... 29
SECTION 2.03. Execution, Authentication and Denominations............................................. 31
SECTION 2.04. Registrar and Paying Agent.............................................................. 32
SECTION 2.05. Paying Agent to Hold Money in Trust..................................................... 33
SECTION 2.06. Transfer and Exchange................................................................... 33
SECTION 2.07. Book-Entry Provisions for Global Securities............................................. 34
SECTION 2.08. Special Transfer Provisions............................................................. 36
SECTION 2.09. Replacement Securities.................................................................. 40
SECTION 2.10. Outstanding Securities.................................................................. 40
SECTION 2.11. Temporary Securities.................................................................... 40
SECTION 2.12. Cancellation............................................................................ 41
SECTION 2.13. CUSIP Numbers........................................................................... 41
SECTION 2.14. Defaulted Interest...................................................................... 41
SECTION 2.15. Issuance of Additional Securities....................................................... 42
ARTICLE III
REDEMPTION
SECTION 3.01. Notices to Trustee...................................................................... 42
SECTION 3.02. Selection and Notice.................................................................... 42
SECTION 3.03. Notice.................................................................................. 42
SECTION 3.04. Effect of Notice of Redemption.......................................................... 43
SECTION 3.05. Deposit of Redemption Price............................................................. 44
SECTION 3.06. Securities Redeemed in Part............................................................. 44
SECTION 3.07. Optional Redemption..................................................................... 44
SECTION 3.08. Special Mandatory Redemption............................................................ 45
SECTION 3.09. Repurchase Offers....................................................................... 45
SECTION 3.10. No Sinking Fund......................................................................... 48
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Securities................................................................... 48
SECTION 4.02. Reports................................................................................. 49
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock...................................... 49
SECTION 4.04. Restricted Payments..................................................................... 51
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries............................................................... 55
SECTION 4.06. Asset Sales............................................................................. 57
SECTION 4.07. Transactions with Affiliates............................................................ 58
SECTION 4.08. Change of Control....................................................................... 59
SECTION 4.09. Compliance Certificate.................................................................. 59
SECTION 4.10. Liens................................................................................... 60
SECTION 4.11. Additional Security Guarantees.......................................................... 60
SECTION 4.12. Restriction on Senior Subordinated Debt................................................. 60
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially
All Assets of the Company............................................................. 60
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially
All Assets of a Guarantor............................................................. 62
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default and Remedies.......................................................... 62
SECTION 6.02. Acceleration............................................................................ 64
SECTION 6.03. Other Remedies.......................................................................... 64
SECTION 6.04. Waiver of Past Defaults................................................................. 65
SECTION 6.05. Control by Majority..................................................................... 65
SECTION 6.06. Limitation on Suits..................................................................... 65
SECTION 6.07. Rights of Holders to Receive Payment.................................................... 66
SECTION 6.08. Collection Suit by Trustee.............................................................. 66
SECTION 6.09. Trustee May File Proofs of Claim........................................................ 66
SECTION 6.10. Priorities.............................................................................. 66
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SECTION 6.11. Undertaking for Costs................................................................... 67
SECTION 6.12. Waiver of Stay or Extension Laws........................................................ 67
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee....................................................................... 67
SECTION 7.02. Rights of Trustee....................................................................... 68
SECTION 7.03. Individual Rights of Trustee............................................................ 70
SECTION 7.04. Trustee's Disclaimer.................................................................... 70
SECTION 7.05. Notice of Defaults...................................................................... 70
SECTION 7.06. Reports by Trustee to Holders........................................................... 70
SECTION 7.07. Compensation and Indemnity.............................................................. 70
SECTION 7.08. Replacement of Trustee.................................................................. 72
SECTION 7.09. Successor Trustee by Merger............................................................. 73
SECTION 7.10. Eligibility; Disqualification........................................................... 73
SECTION 7.11. Preferential Collection of Claims Against Company....................................... 73
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Legal Defeasance and Covenant Defeasance................................................ 73
SECTION 8.02. Conditions to Legal or Covenant Defeasance.............................................. 74
SECTION 8.03. Deposited Money and Government Securities to
Be Held in Trust; Other Miscellaneous Provisions....................................... 76
SECTION 8.04. Repayment to Company.................................................................... 76
SECTION 8.05. Reinstatement........................................................................... 77
SECTION 8.06. Satisfaction and Discharge of Indenture................................................. 77
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders.............................................................. 78
SECTION 9.02. With Consent of Holders................................................................. 79
SECTION 9.03. Compliance with Trust Indenture Act..................................................... 80
SECTION 9.04. Revocation and Effect of Consents and Waivers........................................... 80
SECTION 9.05. Notation on or Exchange of Securities................................................... 81
SECTION 9.06. Trustee to Sign Amendments.............................................................. 81
ARTICLE X
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SUBORDINATION
SECTION 10.01. Agreement To Subordinate............................................................... 81
SECTION 10.02. Liquidation, Dissolution, Bankruptcy................................................... 82
SECTION 10.03. Default on Senior Debt................................................................. 82
SECTION 10.04. Acceleration of Payment of Securities.................................................. 83
SECTION 10.05. When Distribution Must Be Paid Over.................................................... 83
SECTION 10.06. Subrogation............................................................................ 83
SECTION 10.07. Relative Rights........................................................................ 83
SECTION 10.08. Subordination May Not Be Impaired by Company........................................... 84
SECTION 10.09. Rights of Trustee and Paying Agent..................................................... 84
SECTION 10.10. Distribution or Notice to Representative............................................... 84
SECTION 10.11. Article X Not to Prevent Events of Default or Limit
Right to Accelerate................................................................... 84
SECTION 10.12. Trust Moneys Not Subordinated.......................................................... 84
SECTION 10.13. Trustee Entitled to Rely............................................................... 85
SECTION 10.14. Trustee to Effectuate Subordination.................................................... 85
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt....................................... 85
SECTION 10.16. Reliance by Holders of Senior Debt on
Subordination Provisions.............................................................. 85
SECTION 10.17. Trustee's Compensation Not Prejudiced.................................................. 86
ARTICLE XI
SECURITY GUARANTEES
SECTION 11.01. Security Guarantees.................................................................... 86
SECTION 11.02. Limitation on Liability................................................................ 88
SECTION 11.03. Successors and Assigns................................................................. 88
SECTION 11.04. No Waiver.............................................................................. 88
SECTION 11.05. Modification........................................................................... 89
ARTICLE XII
SUBORDINATION OF THE SECURITY GUARANTEES
SECTION 12.01. Agreement to Subordinate............................................................... 89
SECTION 12.02. Liquidation, Dissolution, Bankruptcy................................................... 89
SECTION 12.03. Default on Senior Debt of a Guarantor.................................................. 89
SECTION 12.04. Demand for Payment..................................................................... 90
SECTION 12.05. When Distribution Must Be Paid Over.................................................... 90
SECTION 12.06. Subrogation............................................................................ 91
SECTION 12.07. Relative Rights........................................................................ 91
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor....................................... 91
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SECTION 12.09. Rights of Trustee and Paying Agent..................................................... 91
SECTION 12.10. Distribution or Notice to Representative............................................... 92
SECTION 12.11. Article XII Not to Prevent Events of Default or
Limit Right to Accelerate............................................................. 92
SECTION 12.12. Trustee Entitled to Rely............................................................... 92
SECTION 12.13. Trustee to Effectuate Subordination.................................................... 92
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt
of a Guarantor........................................................................ 92
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor
on Subordination Provisions........................................................... 93
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls........................................................... 93
SECTION 13.02. Notices................................................................................ 93
SECTION 13.03. Communication by Holders with Other Holders............................................ 95
SECTION 13.04. Certificate and Opinion as to Conditions Precedent..................................... 95
SECTION 13.05. Statements Required in Certificate or Opinion.......................................... 95
SECTION 13.06. When Securities Disregarded............................................................ 96
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar........................................... 96
SECTION 13.08. Legal Holidays......................................................................... 96
SECTION 13.09. GOVERNING LAW.......................................................................... 96
SECTION 13.10. No Recourse Against Others............................................................. 96
SECTION 13.11. Successors............................................................................. 97
SECTION 13.12. Multiple Originals..................................................................... 97
SECTION 13.13. Table of Contents; Headings............................................................ 97
-v-
INDENTURE dated as of July 31, 1998, among HH ACQUISITION CORP., a
Delaware corporation (the "Company"), and UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (i) the Company's 11% Senior
Subordinated Discount Notes due 2008 issued on the date hereof, (ii) any
Additional Securities that may be issued on any other Issue Date (all such
Securities in clauses (i) and (ii) being referred to collectively as the
"Initial Securities") and (iii) if and when issued as provided in a Registration
Rights Agreement of the Company's 11% Senior Subordinated Discount Notes due
2008 issued in a Registered Exchange Offer in exchange for any Initial
Securities (the "Exchange Securities", and together with the Initial Securities
and any Exchange Securities issued hereunder, the "Securities"). The Securities
issued on the date hereof will be limited to $170,000,000 in aggregate principal
amount at maturity. Subject to the conditions set forth herein, the Company may
issue Additional Securities.
WHEREAS, as of the date hereof, Harborside and the Guarantors are not
parties to this Indenture. However, upon consummation of the Recapitalization,
Harborside, each of the Guarantors and the Trustee will execute and deliver a
supplemental indenture providing for (i) the assumption by Harborside of the
Company's obligations under this Indenture and (ii) each of the Guarantors to
become a party to this Indenture as a Guarantor.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. Definitions.
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"Accreted Value" means, for any date, the amount calculated pursuant
to clauses (i), (ii), (iii) or (iv) for each $1,000 principal amount at maturity
of Securities:
(i) if the date occurs on one of the following dates (each a "Semi-
Annual Accrual Date"), the Accreted Value will equal the amount set forth
below for such Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
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February 1, 1999...................... $ 617.62
August 1, 1999...................... $ 651.59
February 1, 2000...................... $ 687.43
August 1, 2000...................... $ 725.24
February 1, 2001...................... $ 765.13
August 1, 2001...................... $ 807.21
February 1, 2002...................... $ 851.61
August 1, 2002...................... $ 898.45
February 1, 2003...................... $ 947.86
August 1, 2003...................... $1000.00
(ii) if the date occurs before the first Semi-Annual Accrual Date,
the Accreted Value will equal the sum of (a) the original issue price of
the Securities per $1,000 principal amount and (b) an amount equal to the
product of (1) the Accreted Value for the first Semi-Annual Accrual Date
less the original issue price multiplied by (2) a fraction, the numerator
of which is the number of days from the first Issue Date to the date, using
a 360-day year of twelve 30-day months, and the denominator of which is the
number of days from the first Issue Date to the first Semi-Annual Accrual
Date, using a 360-day year of twelve 30-day months;
(iii) if the date occurs between two Semi-Annual Accrual Dates, the
Accreted Value will equal the sum of (a) the Accreted Value for the Semi-
Annual Accrual Date immediately preceding such date and (b) an amount equal
to the product of (1) Accreted Value for the immediately following Semi-
Annual Accrual Date less the Accreted Value for the immediately preceding
Semi-Annual Accrual Date multiplied by (2) a fraction, the numerator of
which is the number of days from the immediately preceding Semi-Annual
Accrual Date to the date, using a 360-day year of twelve 30-day months, and
the denominator of which is 180; or
(iv) if the date occurs after the last Semi-Annual Accrual Date, the
Accreted Value will equal $1,000.
"Acquired Debt" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such other Person is merged with or
into or became a Restricted Subsidiary of such specified Person, (ii) Debt
incurred by such specified Person, its Restricted Subsidiaries or such other
Person for the purpose of financing the acquisition of such other Person or its
assets, provided that such other Person becomes or, in the case of an asset
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purchase, the Person acquiring such assets is, a Restricted Subsidiary, and
(iii) Debt secured by a Lien encumbering any asset acquired by such specified
Person.
"Additional Securities" shall mean Initial Securities initially issued
subsequent to the date hereof pursuant to Article II and in compliance with
Section 4.03.
"Affiliate" of any specified Person means (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, 5% or more of such specified Person's Voting Stock or
(iii) any Person who is a director or officer (a) of such Person, (b) of any
Subsidiary of such Person or (c) of any Person described in clause (i) or (ii)
2
above. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Co-registrar.
"Applicable Premium" means, with respect to a Security at any
redemption date prior to August 1, 2003, the greater of (i) 1.0% of the Accreted
Value of such Security or (ii) the excess of (A) the present value at such time
of the redemption price of such Security at August 1, 2003 (such redemption
price being set forth in the table in Section 3.07(a)), computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
Accreted Value of such Security on the redemption date.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including by way of a sale and leaseback)
(provided that the sale, lease, conveyance or other disposition of all or
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substantially all of the assets of the Company will be governed by Article V and
not by the provisions of Section 4.06), and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Subsidiaries (other than director's qualifying shares), in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of 2.5% of
Total Assets or (b) for net proceeds in excess of 2.5% of Total Assets.
Notwithstanding the foregoing, the following will not be Asset Sales: (i) a
transfer of assets by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary, (ii) an issuance
of Equity Interests by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary, (iii) a Restricted Payment or Permitted Investment that
is permitted by Section 4.04 (including any formation of or contribution of
assets to a Subsidiary or joint venture), (iv) leases or subleases, in the
ordinary course of business, to third parties of real property owned in fee or
leased by the Company or its Subsidiaries, (v) a disposition, in the ordinary
course of business, of a lease of real property, (vi) any disposition of
property of the Company or any of its Subsidiaries that, in the reasonable
judgment of the Company, has become uneconomic, obsolete or worn out, (vii) any
disposition of property or assets (including any disposition of inventory,
accounts receivable and any licensing agreements) in the ordinary course of
business, (viii) the sale of Cash Equivalents and Investment Grade Securities or
any disposition of cash, (ix) any exchange of property or assets by the Company
or a Restricted Subsidiary in exchange for cash or Cash Equivalents or property
or assets that will be used or useful in the business conducted by the Company
or any of its Restricted Subsidiaries, provided any such cash and Cash
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Equivalents are applied as if they were Net Proceeds of an Asset Sale, and (x)
the sale or factoring of receivables on customary market terms pursuant to
Credit Facilities but only if the proceeds thereof received by the Company and
its Restricted Subsidiaries represent the fair market value of such receivables.
3
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of the Board of Directors
of such Person.
"Board Resolution" means a copy of a resolution certified by an
Officer of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York State are authorized or required by
law to close.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any similar participation in profits and losses or equity of a
Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any commercial bank or trust company
having capital and surplus in excess of $300.0 million, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Xxxxx'x
Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies, Inc. ("S&P"), and in each case maturing
within one year after the date of acquisition, (vi) investment funds investing
95% of their assets in securities of the types described in clauses (ii)-(v)
above, (vii) readily marketable direct obligations issued by any state of the
United States of America or any political subdivision thereof having one of the
two highest rating categories obtainable from either Moody's or S&P and (viii)
Debt with a rating of "A" or higher from S&P or "A2" or higher from Moody's and
having a maturity of not more than one year from the date of acquisition.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the first public offering of Voting Stock of the Company,
the Initial Control Group ceases to be the "beneficial owner" (as defined
in Rules 13d-3 and
4
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the Company, whether as a
result of the issuance of securities of the Company, any merger,
consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by the Initial Control Group or otherwise
(for purposes of this clause (i), the Initial Control Group shall be deemed
to beneficially own all Voting Stock of an entity (the "specified entity")
held by any other entity (the "parent entity") so long as the Initial
Control Group beneficially owns (as so defined), directly or indirectly, in
the aggregate a majority of the voting power of the Voting Stock of the
parent entity);
(ii) following the first public offering of Voting Stock of the
Company (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more members of the Initial Control
Group, is or becomes the beneficial owner (as defined in clause (i) above),
directly or indirectly, of more than 40% of the total voting power of the
Voting Stock of the Company and (B) the Initial Control Group "beneficially
owns" (as defined in clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting Stock
of the Company, than such other person and does 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 (for purposes
of this clause (ii), such other person shall be deemed to beneficially own
all Voting Stock of a specified entity held by a parent entity, if such
other person "beneficially owns" (as defined in clause (i) above), directly
or indirectly, in the aggregate more than 40% of the voting power of the
Voting Stock of such parent entity and the Initial Control Group
"beneficially owns" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of the
Voting Stock of such parent entity and does 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 such parent entity); or
(iii) at any time after the first public offering of common stock of
the Company, any person other than the Initial Control Group (or their
designated board members), (A) (I) nominates one or more individuals for
election to the Board of Directors of the Company and (II) solicits
proxies, authorizations or consents in connection therewith and (B) such
number of nominees elected to serve on the Board of Directors in such
election and all previous elections after the Closing Date represents a
majority of the Board of Directors of the Company following such election.
"Closing Date" means the date on which the Company is merged with and
into Harborside Healthcare Corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means United States Trust Company of New York.
5
"Commodity Hedging Agreements" means any futures contract or other
similar agreement or arrangement designed to protect the Company or any
Restricted Subsidiary against fluctuations in commodities prices.
"Company" means HH Acquisition Corp. and, upon consummation of the
Recapitalization, Harborside, until a successor replaces it pursuant to this
Indenture and thereafter shall mean such successor corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period (A) plus
(without duplication), to the extent deducted in computing such Consolidated Net
Income, (i) Consolidated Interest Expense and the amortization of debt issuance
costs, commissions, fees and expenses of such Person and its Restricted
Subsidiaries for such period, (ii) provision for taxes based on income or
profits (including franchise taxes) of such Person and its Restricted
Subsidiaries for such period, (iii) depreciation and amortization expense,
including amortization of inventory write-up under APB 16, amortization of
intangibles (including goodwill and the noncash costs of Interest Rate
Agreements, Commodity Hedging Agreements or Currency Agreements, license
agreements and non-competition agreements), noncash amortization of Capital
Lease Obligations, and organization costs, (iv) noncash expenses related to the
amortization of management fees paid on or prior to the Closing Date, (v)
expenses and charges related to any equity offering or Incurrence of Debt
permitted to be Incurred by this Indenture (including any such expenses or
charges relating to the Recapitalization), (vi) the amount of any restructuring
charge or reserve, (vii) unrealized gains and losses from hedging, foreign
currency or commodities translations and transactions, (viii) expenses
consisting of internal software development costs that are expensed during the
period but could have been capitalized in accordance with GAAP, (ix) any write-
downs, write-offs, and other noncash charges, items and expenses, (x) the amount
of expense relating to any minority interest in a Restricted Subsidiary, and
(xi) costs of surety bonds in connection with financing activities, and (B)
minus any cash payment for which a reserve or charge of the kind described in
clauses (vi), (ix) or (x) of subclause (A) above was taken previously during
such period.
"Consolidated Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Consolidated Interest Expense of
such Person and its Restricted Subsidiaries for such period. In the event that
the Company or any of its Restricted Subsidiaries Incurs, assumes, Guarantees,
redeems or repays any Debt (other than revolving credit borrowings) or issues or
redeems Preferred Stock subsequent to the commencement of the period for which
the Consolidated Coverage Ratio is being calculated but prior to the date on
which the event for which the calculation of the Consolidated Coverage Ratio is
made (the "Calculation Date"), then the Consolidated Coverage Ratio shall be
calculated giving pro forma effect to such Incurrence, assumption, Guarantee,
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redemption or repayment of Debt, or such issuance or redemption of Preferred
Stock, as if the same had occurred at the beginning of the applicable four-
quarter reference period. For purposes of making the computation
6
referred to above, Investments, acquisitions, dispositions, mergers and
consolidations that have been made by the Company or any of its Restricted
Subsidiaries during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date, and discontinued
operations determined in accordance with GAAP on or prior to the Calculation
Date, shall be given effect on a pro forma basis assuming that all such
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Investments, acquisitions, dispositions, mergers and consolidations or
discontinued operations (and the reduction or increase of any associated
Consolidated Interest Expense, and the change in Consolidated Cash Flow,
resulting therefrom, including because of reasonably anticipated cost savings)
had occurred on the first day of the four-quarter reference period. If since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Investment, acquisition,
disposition, merger or consolidation or determined a discontinued operation,
that would have required adjustment pursuant to this definition, then the
Consolidated Coverage Ratio shall be calculated giving pro forma effect thereto
---------
for such period as if such Investment, acquisition, disposition, merger or
consolidation or discontinued operations had occurred at the beginning of the
applicable four-quarter period. For purposes of this definition, whenever pro
---
forma effect is to be given to a transaction, the pro forma calculations shall
----- ---------
be made in good faith by a financial or accounting officer of the Company. If
any Debt to which pro forma effect is given bears interest at a floating rate,
---------
the interest expense on such Debt shall be calculated as if the rate in effect
on the Calculation Date had been the applicable interest rate for the entire
period (taking into account any Interest Rate Agreement in effect on the
Calculation Date). Interest on a Capital Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by a responsible financial or
accounting officer of the Company to be the rate of interest implicit in such
Capital Lease Obligation in accordance with GAAP. Interest on Debt that may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Company may designate.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of (i) the consolidated net interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including amortization of original issue discount, noncash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges Incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations relating to Interest Rate Agreements or
Currency Agreements with respect to Debt, excluding, however, (A) amortization
--------- -------
of debt issuance costs, commissions, fees and expenses, (B) customary
commitment, administrative and transaction fees and charges and (C) expenses
attributable to letters of credit or similar arrangements supporting insurance
certificates issued to customers in the ordinary course of business), (ii) any
interest expense on Debt of another Person that is Guaranteed by or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (but only to
the extent such Guarantee or Lien has then been called
7
upon), and (iii) cash dividends paid in respect of any Preferred Stock of such
Person or any Restricted Subsidiary of such Person held by Persons other than
the Company or a Subsidiary, in each case, on a consolidated basis and in
accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income of any Person that is not a
--------
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary of
such Person, (ii) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, prohibited by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders unless such restriction with respect to the
payment of dividends has been permanently waived, (iii) except for purposes of
calculating "Consolidated Cash Flow," the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded (effected either through cumulative
effect adjustment or a retroactive application, in each case, in accordance with
GAAP), (v) to the extent deducted in determining Net Income, the fees, expenses
and other costs Incurred in connection with the Recapitalization, including
payments to management contemplated by the Recapitalization Agreement, shall be
excluded, and (vi) to the extent deducted in determining Net Income, any noncash
charges resulting from any write-up, write-down or write-off of assets, of the
Company and its Restricted Subsidiaries in connection with the Recapitalization,
shall be excluded.
"Credit Facilities" means, with respect to the Company, one or more
debt facilities (including the New Credit Facility) or commercial paper
facilities with banks, insurance companies or other institutional lenders
providing for revolving credit loans, term loans, synthetic lease financing,
notes, receivables factoring or other financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
or issue securities to such lenders against such receivables) or letters of
credit or other credit facilities, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement to which the Company or
any Restricted Subsidiary is a party or of which it is a beneficiary.
"Debt" means, with respect to any Person (without duplication), (i)
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or
8
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property, which purchase price is due more than six
months after the date of placing such property in final service or taking final
delivery thereof, or representing any Hedging Obligations, except any such
balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, (ii) all indebtedness under clause (i)
of other Persons secured by a Lien on any asset of such Person (whether or not
such indebtedness is assumed by such Person), provided that the amount of
--------
indebtedness of such Person shall be the lesser of (A) the fair market value of
such asset at such date of determination and (B) the amount of such indebtedness
of such other Persons, and (iii) to the extent not otherwise included, the
Guarantee by such Person of any Debt under clause (i) of any other Person;
provided, however, that Debt shall not include (a) obligations of the Company or
-------- -------
any of its Restricted Subsidiaries arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, Incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary, other than
guarantees of Debt Incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, however, that (x) such obligations are not reflected on the balance
-------- -------
sheet of the Company or any Restricted Subsidiary (contingent obligations
referred to in a footnote to financial statements and not otherwise reflected on
the balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (x)) and (y) the maximum assumable liability in respect
of all such obligations shall at no time exceed the gross proceeds including
noncash proceeds (the fair market value of such noncash proceeds being measured
at the time received and without giving effect to any subsequent changes in
value) actually received by the Company and its Restricted Subsidiaries in
connection with such disposition, (b) (A) obligations under (or constituting
reimbursement obligations with respect to) letters of credit, performance bonds,
surety bonds, appeal bonds, completion guarantees or similar instruments issued
in connection with the ordinary course of business conducted by the Company,
including letters of credit in respect of workers' compensation claims, security
or lease deposits and self-insurance; provided, however, that upon the drawing
-------- -------
of such letters of credit or other instrument, such obligations are reimbursed
within 30 days following such drawing, and (B) obligations arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of day-light overdrafts) drawn
against insufficient funds in the ordinary course of business; provided,
--------
however, that such obligations are extinguished within three Business Days of
-------
Incurrence, or (c) retentions in connection with purchasing assets in the
ordinary course of business of the Company and its Restricted Subsidiaries. The
amount of any Debt outstanding as of any date shall be the lesser of (i) the
accreted value thereof, and (ii) the principal amount thereof, provided that the
--------
amount of Permitted Debt under clause (i) or (x) of the definition thereof, at
the Company's election, but without duplication, may be reduced by the principal
amount (not to exceed $7.5 million)
9
of the note receivable issued to Harborside before the Issue Date in connection
with the leasing of certain nursing home facilities in the State of Connecticut.
"Default" means any event that, with the passage of time or the giving
of notice or both, would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors.
"Designated Senior Debt" means (i) any Debt outstanding under the New
Credit Facility and (ii) any other Senior Debt permitted under this Indenture
the principal amount of which is $25.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than as a result of a
Change of Control), matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date on which the Securities mature;
provided, however, that if such Capital Stock is issued to any plan for the
-------- -------
benefit of employees of the Company or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations. For the avoidance of
doubt, Exchangeable Preferred Stock shall not be considered "Disqualified
Stock."
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the Exchange Debentures of the Company due
2010 issued in exchange for the Exchangeable Preferred Stock and any Exchange
Debentures issued as payments in kind interest thereon.
"Exchange Debenture Indenture" means the indenture pursuant to which
the Exchange Debentures are to be issued, as it may from time to time be amended
or supplemented.
"Exchangeable Preferred Stock" means the Exchangeable Preferred Stock
of the Company Due 2010 issued on the first Issue Date, any Exchangeable
Preferred Stock issued as payment of dividends thereon and any Preferred Stock
containing terms substantially identical
10
to the Exchangeable Preferred Stock that are issued in exchange for the
Exchangeable Preferred Stock.
"Existing Debt" means Debt of the Issuer and its Restricted
Subsidiaries (other than Debt under the New Credit Facility) in existence on the
first Issue Date, until such amounts are repaid.
"Exchange Securities" means any securities of the Company containing
terms identical to the Securities (except that such Exchange Securities shall be
registered under the Securities Act) that are issued and exchanged for the
Initial Securities pursuant to a Registration Rights Agreement and this
Indenture.
"Foreign Subsidiary" means any Subsidiary of the Company formed under
the laws of any jurisdiction other than the United States or any political
subdivision thereof substantially all of the assets of which are located outside
of the United States or that conducts substantially all of its business outside
of the United States.
"Full Accretion Date" means August 1, 2003.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP as in
effect as of the first Issue Date.
"Government Securities" means non-callable direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Debt.
"Guarantors" means, at any time after the Closing Date, (i) each of
the Company's Subsidiaries on the Closing Date, other than the Subsidiary Non-
Guarantors on such date and (ii) each Restricted Subsidiary that executes and
delivers a Security Guarantee after the Closing Date, and their respective
successors and assigns, in each case until released from its Security Guarantee
in accordance with the terms of this Indenture.
11
"Harborside" means Harborside Healthcare Corporation.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under Interest Rate Agreements, Currency Agreements
or Commodity Hedging Agreements.
"Holder" or "Securityholder" means a Person in whose name a Security
is registered in the register for the Securities.
"HRI" means Harborside of Rhode Island L.P., a Massachusetts limited
partnership, or its successor.
"Incur", "Incurring" and "Incurred" means to, directly or indirectly,
create, Incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise; provided, however, that any Debt
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or Capital Stock of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Initial Control Group" means Investcorp, its Affiliates, any Person
acting in the capacity of an underwriter or initial purchaser in connection with
a public or private offering of the Company's Capital Stock, any employee
benefit plan of the Company or any of its Subsidiaries or any participant
therein, a trustee or other fiduciary holding securities under any such employee
benefit plan or any Permitted Transferee of any of the foregoing Persons.
"Initial Purchasers" means Xxxxxx Xxxxxxx & Co. Incorporated, Chase
Securities Inc. and BT Alex.Xxxxx Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, repurchase agreement, futures contract or other
financial agreement or arrangement designed to protect the Company or any
Restricted Subsidiary against fluctuations in interest rates.
"Investcorp" means Investcorp S.A. and certain affiliates thereof.
"Investment Grade Securities" means (i) securities issued or directly
and fully guaranteed or insured by the United States government or any agency or
instrumentality
12
thereof (other than Cash Equivalents) having maturities of not more than one
year from the date of acquisition, (ii) debt securities or debt instruments with
a rating of BBB- or higher by S&P or Baa3 or higher by Moody's or the equivalent
of such rating by such rating organization, or, if no rating of S&P or Moody's
then exists, the equivalent of such rating by any other nationally recognized
securities rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Company and its Subsidiaries having
maturities of not more than one year from the date of acquisition, and (iii)
investments in any fund that invests exclusively in investments of the type
described in clauses (i) and (ii), which fund may also hold immaterial amounts
of cash pending investment and/or distribution.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Debt or other obligations, but excluding
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advances or capital
contributions (excluding commission, travel, payroll, entertainment, relocation
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Debt, Equity
Interests or other securities. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of, in an amount determined as provided in the
third to last paragraph of Section 4.04.
"Investors" shall mean Investcorp and certain other international
investors organized by Investcorp.
"Issue Date" means the date on which any Securities are originally
issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement or any lease
in the nature thereof); provided that in no event shall an operating lease be
--------
deemed to constitute a Lien.
"Liquidated Damages" shall have the meaning set forth in a
Registration Rights Agreement.
"Net Income" means, with respect to any Person and any period, the net
income (or loss) of such Person for such period, determined in accordance with
GAAP and before any reduction in respect of Preferred Stock dividends,
excluding, however, (i) any extraordinary or non-recurring gains or losses or
charges and gains or losses or charges from the sale of assets
13
outside the ordinary course of business, together with any related provision for
taxes on such gain or loss or charges and (ii) deferred financing costs written
off in connection with the early extinguishment of Debt; provided, however, that
-------- -------
Net Income shall be deemed to include any increases during such period to
shareholder's equity of such Person attributable to tax benefits from net
operating losses and the exercise of stock options that are not otherwise
included in Net Income for such period.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including any cash received upon the sale or other disposition of any noncash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including legal, accounting and investment banking fees, and
brokerage and sales commissions) and any relocation, redundancy and closing
costs Incurred as a result thereof, taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), amounts applied to the repayment of principal, premium
(if any) and interest on Debt that is not subordinated to the Securities
required (other than required by clause (a) of the second paragraph of Section
4.06) to be paid as a result of such transaction, all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Sale, and any deduction of appropriate
amounts to be provided by the Company as a reserve, in accordance with GAAP,
against any liabilities associated with the asset disposed of in such
transaction and retained by the Company after such sale or other disposition
thereof, including pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
"New Credit Facility" means the collective reference to (a) the Credit
Agreement among the Issuer and certain Subsidiaries of the Issuer named therein
and the financial institutions named therein, any Credit Documents (as defined
therein) and any related notes, collateral documents, letters of credit,
participation agreements, guarantees and other documents part of or relating to
the Credit Documents, including any appendices, exhibits or Schedules to any of
the foregoing (as the same may be in effect from time to time), and (b) the
Synthetic Lease Facility described in the Credit Agreement, including the Lease
between a Subsidiary of the Issuer, as lessee, and the Delaware business trust
named therein, as lessor (the "Lessor"), the Credit Agreement among the Lessor
and the financial institutions named therein, the Participation Agreement among
the parties to the Lease, the parties to the Credit Agreement, the Trustee of
Lessor, and the Investors in Lessor, and the additional Operative Agreements
described in the Participation Agreement, including any appendices, exhibits or
schedules to any of the foregoing (as the same may be in effect from time to
time), in each case, as such agreements may be amended, modified, supplemented
or restated from time to time, or refunded, refinanced, restructured, replaced,
renewed, repaid or extended from time to time (whether with the original agents
and lenders or other agents or lenders or otherwise, and whether provided under
the original credit agreements or other credit agreements or otherwise). For
purposes of
14
this definition, capitalized terms used in this definition and not defined have
the meanings given in the New Credit Facility.
"Non-U.S. Person" means a Person who is not a "U.S. person" (as
defined in Regulation S).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, Guarantees and other liabilities
payable under the documentation governing any Debt, in each case whether now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or Incurred, whether or
not arising on or after the commencement of a proceeding under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
"Offering" means the Security Offering and the offering of the
Company's Exchangeable Preferred Stock.
"Offering Memorandum" shall mean the offering memorandum dated July
29, 1998, relating to the sale by the Issuer of $170,000,000 aggregate principal
amount at maturity of the Initial Securities and 40,000 shares of Exchangeable
Preferred Stock.
"Officers" means any of the following: Chairman, President, Chief
Executive Officer, Treasurer, Chief Financial Officer, Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer reasonably acceptable to the Trustee.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Debt" means any Debt of the Company or any Guarantor that
ranks pari passu with the Securities or the relevant Security Guarantee.
---- -----
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Payment" means, with respect to the Securities, any payment, whether
in cash or other assets or property, of interest, principal (including
redemption price and purchase price), premium, Liquidated Damages or any other
amount on, of or in respect of the
15
Securities, any other acquisition of Securities and any deposit into the trust
described in Article VIII. The verb "pay" has a correlative meaning.
"Permitted Investments" means (a) any Investment in the Company or in
a Restricted Subsidiary (including in any Equity Interests of a Restricted
Subsidiary); (b) any Investment in cash, Cash Equivalents or Investment Grade
Securities; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary or (ii) such Person, in one transaction or a
series of substantially concurrent related transactions, is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary; (d)
any securities or other assets received or other Investments made as a result of
the receipt of noncash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.06 or in connection with any other
disposition of assets not constituting an Asset Sale; (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) loans or advances to employees (or
guarantees of third party loans to employees) in the ordinary course of
business; (g) stock, obligations or securities received in satisfaction of
judgments, foreclosure of liens or settlement of debts (whether pursuant to a
plan of reorganization or similar arrangement); (h) receivables owing to the
Company or any Restricted Subsidiary, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms (including such concessionary terms as the Company or such
Restricted Subsidiary deems reasonable); (i) any Investment existing on the
first Issue Date or made pursuant to legally binding written commitments in
existence on the first Issue Date; (j) Investments in Interest Rate Agreements,
Currency Agreements and Commodity Hedging Agreements otherwise permitted under
this Indenture; and (k) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(k) that are at that time outstanding, not to exceed 15.0% of Total Assets at
the time of such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value).
"Permitted Junior Securities" shall mean debt or equity securities of
the Company or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Company that are subordinated to the
payment of all Senior Debt at least to the same extent that the Securities are
subordinated to the payment of all Senior Debt on the first Issue Date, so long
as (i) the effect of the use of this defined term in the subordination
provisions described in Article X is not to cause the Securities to be treated
as part of (a) the same class of claims as the Senior Debt or (b) any class of
claims pari passu with, or senior to, the Senior Debt for any payment or
distribution in any case or proceeding or similar event relating to the
liquidation, insolvency, bankruptcy, dissolution, winding-up or reorganization
of the Company and (ii) to the extent that any Senior Debt outstanding on the
date of consummation of any such plan of reorganization or readjustment is not
paid in full in cash on such date, either (a) the holders of any such Senior
Debt not so paid in full in cash have consented to the terms of such plan of
reorganization or readjustment or (b) such holders
16
receive securities that constitute Senior Debt and that have been determined by
the relevant court to constitute satisfaction in full in money or money's worth
of any Senior Debt not paid in full in cash.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company
and Guarantors and unsubordinated Debt of a Subsidiary Non-Guarantor (in each
case including related Obligations) that was permitted by the terms of this
Indenture to be Incurred; (ii) Liens in favor of the Company or any Restricted
Subsidiary; (iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Restricted Subsidiary of
the Company, provided that such Liens were in existence prior to the
--------
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or a
Restricted Subsidiary, as the case may be; (iv) Liens on property existing at
the time of acquisition thereof by the Company or any Restricted Subsidiary of
the Company, provided that such Liens were in existence prior to the
--------
contemplation of such acquisition and do not extend to any assets other than
those acquired; (v) banker's Liens, rights of setoff and Liens to secure the
performance of bids, tenders, trade or government contracts (other than for
borrowed money), leases, licenses, statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature Incurred in the
ordinary course of business; (vi) without limitation of clause (i), Liens to
secure Acquired Debt; (vii) Liens existing on the Closing Date; (viii) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings, provided
--------
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (ix) Liens Incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $5.0 million at any one
time outstanding and that (a) are not Incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; (x)
carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business in respect of
obligations that are not yet due or that are bonded or that are being contested
in good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or such Restricted
Subsidiary, as the case may be, in accordance with GAAP; (xi) pledges or
deposits in connection with workmen's compensation, unemployment insurance and
other social security legislation; (xii) easements (including reciprocal
easement agreements), rights-of-way, building, zoning and similar restrictions,
utility agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects Incurred, or leases or
subleases granted to others, in the ordinary course of business, that do not in
the aggregate materially detract from the aggregate value of the properties of
the Company and its Subsidiaries, taken as a whole, or in the aggregate
materially interfere with or adversely affect in any material respect the
ordinary conduct of the business of the Company and its Subsidiaries on the
properties subject
17
thereto, taken as a whole; (xiii) Liens on goods (and the proceeds thereof) and
documents of title and the property covered thereby securing Debt in respect of
commercial letters of credit; (xiv) (A) mortgages, Liens, security interests,
restrictions, encumbrances or any other matters of record that have been placed
by any developer, landlord or other third party on property over which the
Company or any Restricted Subsidiary of the Company has easement rights or on
any real property leased by the Company or any Restricted Subsidiary on the
first Issue Date and subordination or similar agreements relating thereto and
(B) any condemnation or eminent domain proceedings affecting any real property;
(xv) leases or subleases to third parties; (xvi) Liens in connection with
workmen's compensation obligations and general liability exposure of the Company
and its Restricted Subsidiaries; (xvii) Liens arising by reason of a judgment,
decree or court order, to the extent not otherwise resulting in an Event of
Default; (xviii) Liens securing Hedging Obligations entered into in the ordinary
course of business; (xix) without limitation of clause (i), Liens securing
Permitted Refinancing Debt permitted to be Incurred under this Indenture or
amendments or renewals of Liens that were permitted to be Incurred, provided, in
each case, that (A) such Liens do not extend to an additional property or asset
of the Company or a Restricted Subsidiary and (B) such Liens do not secure Debt
in excess of the amount of Permitted Refinancing Debt permitted to be Incurred
under this Indenture or the principal amount of (or accreted value, if
applicable), plus accrued interest on, the Debt (plus the amount of reasonable
premium and fees and expenses Incurred in connection therewith) secured by the
Lien being amended or renewed, as the case may be; (xx) Liens that secure Debt
of a Person existing at the time such Person becomes a Restricted Subsidiary of
the Company, provided that such Liens do not extend to any assets other than
--------
those of the Person that became a Restricted Subsidiary of the Company, and
(xxi) any provision for the retention of title to an asset by the vendor or
transferor of such asset, which asset is acquired by the Company or any
Restricted Subsidiary in a transaction entered into in the ordinary course of
business of the Company or such Restricted Subsidiary and for which kind of
transaction it is normal market practice for such retention of title provision
to be included.
"Permitted Refinancing Debt" means any Debt of the Company or any of
its Restricted Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other Debt of
the Company or any of its Restricted Subsidiaries Incurred in compliance with
this Indenture, provided that: (i) the principal amount (or accreted value, if
--------
applicable) of such Permitted Refinancing Debt does not exceed the principal
amount of (or accreted value, if applicable), plus accrued interest on, the Debt
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable premium and fees and expenses Incurred in connection
therewith); (ii) in the case of term Debt, (1) principal payments required under
such Permitted Refinancing Debt have a Stated Maturity no earlier than the
earlier of (A) the Stated Maturity of those under the Debt being refinanced and
(B) the maturity date of the Securities and (2) such Permitted Refinancing Debt
has a Weighted Average Life to Maturity equal to or greater than the lesser of
the Weighted Average Life to Maturity of the Debt being extended, refinanced,
renewed, replaced, defeased or refunded and the Weighted Average Life to
Maturity of the Securities; (iii) if the
18
Debt being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Securities, such Permitted Refinancing
Debt has a final maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Securities on terms at least as
favorable to the Holders of Securities as those contained in the documentation
governing the Debt being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Debt is Incurred either by the Company or by its
Restricted Subsidiary who is the obligor on the Debt being extended, refinanced,
renewed, replaced, defeased or refunded. The Company may Incur Permitted
Refinancing Debt not more than six months prior to the application of the
proceeds thereof to repay the Debt to be refinanced; provided that, upon the
--------
Incurrence of such Permitted Refinancing Debt, the Company shall provide written
notice thereof to the Trustee, specifically identifying the Debt to be
refinanced with Permitted Refinancing Debt.
"Permitted Transferee" means, with respect to any Person, (i) any
other Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person, (ii) the spouse,
former spouse, lineal descendants, heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such Person, (iii) a
trust, the beneficiaries of which, or a corporation or partnership or limited
liability company, the stockholders, general or limited partners or members of
which, include only such Person or his or her spouse, lineal descendants or
heirs, in each case to whom such Person has transferred, or through which it
holds, the beneficial ownership of any securities of the Issuer and (iv) any
investment fund or investment entity that is a subsidiary of such Person or a
Permitted Transferee of such Person.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Placement Agreement" means (i) with respect to the Initial Securities
issued on the date hereof, the Placement Agreement dated July 29, 1998, for the
purchase of $170,000,000 principal amount at maturity of Initial Securities
between the Company and the Initial Purchasers as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms thereof
and (ii) with respect to any Additional Securities, any purchase or underwriting
agreement entered into by the Company, any Guarantors and the initial purchasers
or underwriters with respect thereto, as such agreement may be amended, modified
or supplemented from time to time in accordance with the terms thereof.
"Pledge Agreement" means the collateral pledge and security agreement
dated as of the first Issue Date between the Company and the Collateral Agent.
"Preferred Equity Interests" means Preferred Stock and all warrants,
options or other rights to acquire Preferred Stock (but excluding any debt
security that is convertible into, or exchangeable for, Preferred Stock).
19
"Preferred Stock" means, with respect to any Person, any Capital Stock
of such Person (however designated) that 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 Person, over shares
of Capital Stock of any other class of such Person. With respect to the Company,
"Preferred Stock" includes the Exchangeable Preferred Stock.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security that is due or overdue or is to become
due at the relevant time.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Section 2.02.
"Recapitalization" means the recapitalization of Harborside pursuant
to which the Company will be merged with and into Harborside and the financing
transactions related thereto.
"Recapitalization Agreement" means the Agreement and Plan of Merger
dated as of April 15, 1998 by and between the Company and Harborside Healthcare
Corporation, as amended through the Closing Date.
"Registered Exchange Offer" shall mean an offer made by the Company
pursuant to a Registration Rights Agreement and under an effective registration
statement under the Securities Act to exchange Exchange Securities for
outstanding Initial Securities substantially identical in all material respects
to such Initial Securities (except for the differences provided for therein).
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Registration Rights Agreement" means (i) with respect to the Initial
Securities issued on the date hereof, the Registration Rights Agreement dated
July 31, 1998, among the Company, the Guarantors and the Initial Purchasers, as
such agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof and (ii) with respect to any Additional
Securities, any registration rights agreement entered into among the Company,
any Guarantors and the relevant initial purchasers or underwriters, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means any agent or representative in respect of any
Designated Senior Debt; provided that if, and for so long as, any Designated
--------
Senior Debt lacks such a representative, then the Representative for such
Designated Senior Debt shall at all times
20
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means any Debt of the Company or any Subsidiary secured
by a Lien.
"Securities" has the meaning stated in the recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities" shall
include any Exchange Securities to be issued and exchanged for any Initial
Securities pursuant to a Registration Rights Agreement and this Indenture. From
and after the issuance of any Additional Securities (but not for purposes of
determining whether such issuance is permitted hereunder), "Securities" shall
include such Additional Securities for purposes of this Indenture and all
Exchange Securities from time to time issued with respect to any Initial
Securities that constitute such Additional Securities. All Securities,
including any such Additional Securities, shall vote together as one series of
Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" or "Custodian" means the custodian with respect
to any Global Security (as appointed by the Depository), or any successor entity
thereto covered in Section 2.03.
"Security Offering" means the offering of the Company's 11% Senior
Subordinated Discount Notes due 2008 as described in the Offering Memorandum.
"Security Guarantee" means, upon consummation of the Recapitalization,
the Guarantee by each Guarantor of the Company's Obligations under the
Securities pursuant to Article XI.
"Senior Debt" means (i) all Debt of the Company or any Guarantor
outstanding under the New Credit Facility and all Hedging Obligations with
respect thereto, (ii) any other Debt (including Acquired Debt) permitted to be
Incurred by the Company or any Guarantor pursuant to Section 4.03, unless the
instrument under which such Debt is Incurred expressly
21
provides that it is on a parity with or subordinated in right of payment to the
Securities or the relevant Security Guarantee and (iii) all Obligations with
respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (v) any liability for federal, state,
local or other taxes owed or owing by the Company, (w) any Debt of the Company
or any Guarantor to any of its Subsidiaries, officers, employees or other
Affiliates (other than Debt under any Credit Facility to any such Affiliate),
(x) any trade payables, (y) that portion of Debt Incurred in violation of
Section 4.03 (but as to any such Debt under any Credit Facility, such violation
shall be deemed not to exist for purposes of this clause (y) if the lenders have
obtained a representation from a Senior Officer of the Company to the effect
that the issuance of such Debt does not violate such covenant) or (z) any Debt
or obligation of the Company or any Guarantor that is expressly subordinated in
right of payment to any other Debt or obligation of the Company or such
Guarantor, as applicable, including any Subordinated Debt of the Company.
"Senior Officer" means the Chief Executive Officer or the Chief
Financial Officer of the Company.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation is in effect on
the first Issue Date.
"Specified Affiliate Payments" means:
(i) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by any future, present or former employee, director,
officer or consultant of the Company (or any of its Restricted
Subsidiaries) pursuant to any management equity subscription agreement,
stock option agreement, put agreement, stockholder agreement or similar
agreement that may be in effect from time to time; provided that the
--------
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $3.0 million in any calendar year
(with unused amounts in any calendar year being carried over to succeeding
calendar years, subject to a maximum amount of repurchases, redemptions or
other acquisitions pursuant to this clause (i) (without giving effect to
the immediately following proviso) of $10.0 million in any calendar year)
and no payment default on Senior Debt or the Securities shall have occurred
and be continuing; provided further that such amount in any calendar year
-------- -------
may be increased by an amount not to exceed (A) the cash proceeds received
by the Company (including by way of capital contribution) since the Issue
Date from the sale of Equity Interests of the Company to employees,
directors, officers or consultants of the Company or its Subsidiaries that
occurs in such calendar year (it being understood that such cash proceeds
shall be excluded from clause (c)(ii) of Section 4.04(a)) plus (B) the cash
proceeds from key man life insurance policies received by the Company and
its Restricted Subsidiaries in such calendar year (including proceeds from
22
the sale of such policies to the person insured thereby); and provided
--------
further that cancellation of Debt owing to the Company from employees,
-------
directors, officers or consultants of the Company or any of its
Subsidiaries in connection with a repurchase of Equity Interests of the
Company will not be deemed to constitute a Restricted Payment for purposes
of this Indenture;
(ii) repurchases of Equity Interests deemed to occur upon exercise
of stock options or warrants as a result of the payment of all or a portion
of the exercise price of such options or warrants with Equity Interests;
(iii) payments by the Company to shareholders or members of
management of the Company and its Subsidiaries in connection with the
Recapitalization; and
(iv) payments or transactions permitted under clause (5) of Section
4.07(b);
"Stated Maturity" means, with respect to any installment of interest
on or principal of, or any other amount payable in respect of, any series of
Debt, the date on which such interest, principal or other amount was scheduled
to be paid in the documentation governing such Debt, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest,
principal or other amount prior to the date scheduled for the payment thereof.
"Subordinated Debt" means any Debt of the Company or any Guarantor
(whether outstanding on the first Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities or the applicable
Security Guarantee pursuant to written agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof). Unless the context
otherwise requires, "Subsidiary" refers to a Subsidiary of the Company.
"Subsidiary Non-Guarantors" means (i) each of the Subsidiaries of the
Company on the Closing Date that do not issue or are released from a Security
Guarantee, (ii) each Unrestricted Subsidiary, and (iii) each Restricted
Subsidiary formed or acquired after the Closing Date that does not execute and
deliver or is released from a Security Guarantee.
23
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
------
77bbbb) as in effect on the date of this Indenture; provided, however, that, in
-------- -------
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by any such amendments, the Trust Indenture Act of
1939 as so amended.
"Temporary Offshore Global Notes" has the meaning provided in Section
2.01.
"Total Assets" means, at any time, the total consolidated assets of
the Company and its Restricted Subsidiaries at such time.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the redemption
date (or, if such Statistical Release is no longer published, any publicly
available source or similar market data)) most nearly equal to the period from
the redemption date to August 1, 2003, provided, however, that if the period
-------- -------
from the redemption date to August 1, 2003 is not equal to the constant maturity
of a United States Treasury security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the redemption date to August 1, 2003 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, and (ii) any Subsidiary of an Unrestricted Subsidiary; but in the
case of any Subsidiary referred to in clause (i) (or any Subsidiary of any such
Subsidiary) only to the extent that such Subsidiary: (a) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; and (b) except in the case of a
Foreign Subsidiary, is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
24
Person's financial condition or to cause such Person to achieve any specified
levels of operating results. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.04. If, at any time, any Unrestricted
Subsidiary referred to in clause (ii) of the first sentence of this definition
(or any Subsidiary thereof) would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Debt of such Subsidiary shall
be deemed to be Incurred by a Restricted Subsidiary of the Company as of such
date (and, if such Debt is not permitted to be Incurred as of such date pursuant
to Section 4.03, the Company shall be in default of such covenant). The Board
of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
--------
be deemed to be an Incurrence of Debt by a Restricted Subsidiary of the Company
of any outstanding Debt of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Debt is permitted by Section 4.03,
calculated on a pro forma basis as if such designation had occurred at the
---------
beginning of the four-quarter reference period, and (ii) no Default or Event of
Default would be in existence following such designation.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the Company's option.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person, excluding, however, Exchangeable Preferred Stock.
"Weighted Average Life to Maturity" means, when applied to any Debt at
any date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Debt.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
25
SECTION 1.02. Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Affiliate Transaction"............................ 4.07
"Agent Members".................................... 2.07(a)
"Asset Sale Offer"................................. 4.06
"Bankruptcy Law"................................... 6.01
"Change of Control Offer".......................... 3.09(a)
"Change of Control Payment"........................ 4.08(a)
"Covenant Defeasance".............................. 8.01(c)
"Custodian"........................................ 6.01
"estate"........................................... 8.02(f)
"Event of Default"................................. 6.01
"Excess Proceeds".................................. 4.06
"Excess Proceeds Offer"............................ 3.09(a)
"Global Securities"................................ 2.01
"Guaranteed Obligations"...........................11.01
"Guarantor non-payment default"....................12.03
"Guarantor Payment Blockage Notice"................12.03
"Guarantor payment default"........................12.03
"Indemnified Party"................................ 7.07
"Legal Defeasance"................................. 8.01(b)
"Legal Holiday"....................................13.08
"non-payment default"..............................10.03
"Notice of Default"................................ 6.01
"Offer Amount"..................................... 3.09(a)
"Offer Period"..................................... 3.09(a)
"Offshore Global Security.......................... 2.01
"Offshore Physical Securities...................... 2.01
"Option of Holder to Elect Purchase"............... 3.09
"Payment Blockage Notice"..........................10.03
"payment default"..................................10.03
"Permanent Offshore Global Securities"............. 2.01
"Permitted Debt"................................... 4.03(b)
"Physical Securities".............................. 2.01
"Purchase Date".................................... 3.09(a)
"Registrar......................................... 2.04
"Repurchase Offer"................................. 3.09(a)
"Restricted Payments".............................. 4.04(a)
"Rule 144A"........................................ 2.01(b)
"Security Register"................................ 2.04
"Trustee".......................................... 8.03
26
"U.S. Global Securities"........................... 2.01
"U.S. Physical Securities"......................... 2.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Security holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on this Indenture securities means the Company, each
Guarantor and any other obligor under this Indenture.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
Secured Debt merely by virtue of its nature as unsecured Debt;
27
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the Company dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Debt; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
THE SECURITIES
--------------
SECTION 2.01. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange
agreements to which the Company is subject or usage. The Company shall approve
the form of the Securities and any notation, legend or endorsement on the
Securities. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form set forth in Exhibit A (the "U.S. Global
-----------
Securities"), registered in the name of the nominee of the Depositary, deposited
----------
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount at maturity of the U.S. Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, in accordance with the instructions
given by the Holder thereof, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Securities in registered form substantially in the form set forth in
Exhibit A (the "Temporary Offshore Global Securities"), registered in the name
------------------------------------
of the nominee of the Depositary, deposited with the Trustee, as custodian for
the Depositary, duly executed by the Company and authenticated by
28
the Trustee as hereinafter provided. At any time on or after September 10, 1998,
upon receipt by the Trustee and the Company of a certificate substantially in
the form of Exhibit B hereto, one or more permanent global Securities in
registered form substantially in the form set forth in Exhibit A (the "Permanent
---------
Offshore Global Securities"; and together with the Temporary Offshore Global
--------------------------
Securities, the "Offshore Global Securities") duly executed by the Company and
--------------------------
authenticated by the Trustee as hereinafter provided, shall be deposited with
the Trustee, as custodian for the Depositary or its nominee, and the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount at maturity of the Temporary Offshore Global Securities in an amount
equal to the principal amount at maturity of the beneficial interest in the
Temporary Offshore Global Securities transferred.
Securities may not be originally offered or sold to Institutional
Accredited Investors which are not QIBs (excluding Non-U.S. Persons).
Securities resold or otherwise transferred to Institutional Accredited Investors
as provided in Section 2.08(a) shall be issued in the form of permanent
certificated Securities in registered form in substantially the form set forth
in A (the "U.S. Physical Securities").
------------------------
Securities issued pursuant to Section 2.07 in exchange for interests
in the Offshore Global Securities shall be in the form of permanent certificated
Securities in registered form substantially in the form set forth in A (the
"Offshore Physical Securities").
-----------------------------
The Offshore Physical Securities and U.S. Physical Securities are
sometimes collectively herein referred to as the "Physical Securities." The
-------------------
U.S. Global Securities and the Offshore Global Securities are sometimes referred
to herein as the "Global Securities."
-----------------
The definitive Securities shall be typed, 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 2.02. Restrictive Legends. Unless and until a Security is
-------------------
exchanged for an Exchange Security or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, (i) the
U.S. Global Securities and U.S. Physical Securities shall bear the legend set
forth below on the face thereof and (ii) the Offshore Physical Securities, until
at least the 41st day after the Closing Date and receipt by the Company and the
Trustee of a certificate substantially in the form of B hereto, and the
Temporary Offshore Global Securities shall bear the legend set forth below on
the face thereof.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH
29
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF NOTES AT THE TIME
OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED
TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE
30
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Security, whether or not an Exchange Security, shall also
bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. Execution, Authentication and Denominations. Subject
-------------------------------------------
to Section 4.03, the aggregate principal amount at maturity of Securities which
may be authenticated and delivered under this Indenture is unlimited. The
Securities shall be executed by one or more Officers of the Company. The
signature of these Officers on the Securities may be by facsimile or manual
signature in the name and on behalf of the Company.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
written order of the Company
31
authenticate for original issue Securities in the aggregate principal amount at
maturity specified in such order; provided that the Trustee shall be entitled to
--------
receive an Officers' Certificate and an Opinion of Counsel of the Company in
connection with such authentication of Securities. Such written order of the
Company shall specify the amount of Securities to be authenticated and the date
on which the original issue of Securities is to be authenticated and, in case of
an issuance of Securities pursuant to Section 2.15, shall certify that such
issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate
Securities. Any such appointment shall be evidenced by an instrument signed by
the Trustee, a copy of which shall be furnished to the Company. An
authenticating agent may authenticate Securities whenever the Trustee may do so
unless limited by the terms of such appointment. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
authenticating agent. An authenticating agent has the same rights as an Agent
to deal with the Company or an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 in principal amount at maturity and
any integral multiple thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar"), an office or agency where Securities
---------
may be presented for payment (the "Paying Agent") and an office or agency where
------------
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served, which shall be in the Borough of Manhattan, The City of
New York. The Company shall cause the Registrar to keep a register of the
Securities and of their transfer and exchange (the "Security Register"). The
-----------------
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Company may have one
or more co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
--------
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by the Company and
such successor Agent and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as such Agent until the appointment of a
successor Agent in accordance with clause (i) of this proviso. The Company,
32
any domestically organized Wholly Owned Restricted Subsidiary of the Company, or
any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar,
and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notice and demands. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders and shall otherwise comply with TIA (S)
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee as of each regular record date and at such other times as the Trustee
may reasonably request the names and addresses of Holders as they appear in the
Security Register, including the aggregate principal amount at maturity of
Securities held by each Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than
-----------------------------------
11:00 a.m. (New York City time) on each due date of the principal, premium and
Liquidated Damages, if any, and interest on any Securities, the Company shall
deposit with the Paying Agent money in immediately available funds sufficient to
pay such principal, premium and Liquidated Damages, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium and Liquidated Damages, if any, and interest on
the Securities (whether such money has been paid to it by the Company or any
other obligor on the Securities), and such Paying Agent shall promptly notify
the Trustee of any default by the Company (or any other obligor on the
Securities) in making any such payment. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed, and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon doing so, the Paying Agent shall have no further liability for
the money so paid over to the Trustee. If the Company or any Subsidiary of the
Company or any Affiliate of any of them acts as Paying Agent, it will, on or
before each due date of any principal of, premium and Liquidated Damages, if
any, or interest on the Securities, segregate and hold in a separate trust fund
for the benefit of the Holders a sum of money sufficient to pay such principal,
premium and Liquidated Damages, if any, or interest so becoming due until such
sum of money shall be paid to such Holders or otherwise disposed of as provided
in this Indenture, and will promptly notify the Trustee of its action or failure
to act.
SECTION 2.06. Transfer and Exchange. The Securities are issuable
---------------------
only in registered form. A Holder may register the transfer of a Security only
by written application to the Registrar stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture. No such
registration of transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Security Register. Prior to the
registration of any
33
transfer by a Holder as provided herein, the Company, the Trustee, and any agent
of the Company or the Trustee shall treat the Person in whose name the Security
is registered as the owner thereof for all purposes whether or not the Security
shall be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary. Furthermore, any Holder of a Global
Security shall, by acceptance of such Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a book
entry system maintained by the Holder of such Global Security (or its agent) and
that ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry. When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount at maturity of Securities of other authorized
denominations (including an exchange of Securities for Exchange Securities), the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Securities are
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder);
provided that no exchanges of Securities for Exchange Securities shall occur
until a Registration Statement shall have been declared effective by the
Commission and that any Securities that are exchanged for Exchange Securities
shall be cancelled by the Trustee. To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax
assessments or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3.06 or 9.05).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Securities. (a) The
-------------------------------------------
U.S. Global Securities and Offshore Global Securities initially shall (i) be
registered in the name of the Depositary for such Global Securities or the
nominee of such Depositary, (ii) be delivered to the Trustee as custodian for
such Depositary and (iii) bear legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as
34
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in
Global Securities may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 2.08. In addition, U.S.
Physical Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Securities or the Offshore Global Securities, as the case may be, if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the U.S. Global Securities or the Offshore Global Securities, as
the case may be, and a successor depositary is not appointed by the Company
within 90 days of such notice, (ii) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depositary or (iii)
in accordance with the rules and procedures of the Depositary and the provisions
of Section 2.08.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a Person who takes delivery in the form of an interest in another
Global Security will, upon transfer, cease to be an interest in such Global
Security and become an interest in such other Global Security and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Security for
as long as it remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount at maturity of such Global Security in an
amount equal to the principal amount at maturity of the beneficial interest in
such Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Securities or
Offshore Physical Securities, as the case may be, of like tenor and amount.
(e) In connection with the transfer of the U.S. Global Securities or
the Offshore Global Securities, in whole, to beneficial owners pursuant to
paragraph (b) of this Section 2.07, the U.S. Global Securities or Offshore
Global Securities, as the case may be, shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in the U.S. Global Securities or
Offshore Global Securities, as the case may be, an equal aggregate principal
amount at maturity of U.S.
35
Physical Securities or Offshore Physical Securities, as the case may be, of
authorized denominations.
(f) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Securities pursuant to paragraph (b), (d) or (e) of this
Section 2.07 shall, except as otherwise provided by paragraph (f) of Section
2.08, bear the legend regarding transfer restrictions applicable to the U.S.
Physical Security set forth in Section 2.02.
(g) Any Offshore Physical Security delivered in exchange for an
interest in the Offshore Global Securities pursuant to paragraph (b), (d) or (e)
of this Section 2.07 shall, except as otherwise provided by paragraph (f) of
Section 2.08, bear the legend regarding transfer restrictions applicable to the
Offshore Physical Security set forth in Section 2.02.
(h) The registered holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.08. Special Transfer Provisions. Unless and until a
---------------------------
Security is exchanged for an Exchange Security or sold in connection with an
effective Registration Statement pursuant to the Registration Rights Agreement,
the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
-------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Security,
whether or not such Security bears the Private Placement Legend, if
(x) the requested transfer is after the time period referred to in
Rule 144(k) under the Securities Act or (y) the proposed transferee
has delivered to the Registrar (A) a certificate substantially in the
form of C hereto and (B) if the aggregate Accreted Value at the time
of transfer of the Securities being transferred is less than $250,000,
an Opinion of Counsel acceptable to the Company that such transfer is
in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Securities, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i)
above and (y) instructions given in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount at
maturity of the U.S. Global Securities in an amount equal to the
principal amount at maturity of the beneficial interest in the U.S.
Global
36
Securities to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Security to a QIB
(excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) either
Offshore Physical Securities prior to the removal of the Private
Placement Legend or U.S. Physical Securities, the Registrar shall
register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of
Security stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect
to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Securities, the transfer of such interest
may be effected only through the book entry system maintained by the
Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Registrar of the documents referred to in paragraph (i)
above and instructions given in accordance with the Depositary's and
the Registrar's procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount at
maturity of U.S. Global Securities in an amount equal to the principal
amount at maturity of the U.S. Physical Securities to be transferred,
and the Trustee shall cancel the U.S. Physical Securities so
transferred.
(c) Transfers of Interests in the Temporary Offshore Global
-------------------------------------------------------
Securities. The following provisions shall apply with respect to
registration of any proposed transfer of an interest in a Temporary
Offshore Global Securities:
(i) The Registrar shall register the transfer of any Security (x)
if the proposed transferee is a Non-U.S. Person and the proposed
transferor has
37
delivered to the Registrar a certificate substantially in the form of
D hereto or (y) if the proposed transferee is a QIB and the proposed
transferor has checked the box provided for on the form of Security
stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale
to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Registrar of the documents referred to in clause (i)(y) above
and instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity
of the U.S. Global Securities in an amount equal to the principal
amount at maturity of the Temporary Offshore Global Securities to be
transferred, and the Trustee shall decrease the amount of the
Temporary Offshore Global Securities.
(d) Transfers of Interests in the Permanent Offshore Global Securities
------------------------------------------------------------------
or Unlegended Offshore Physical Securities. The following provisions shall
------------------------------------------
apply with respect to any transfer of interests in Permanent Offshore
Global Securities or unlegended Offshore Physical Securities. The
Registrar shall register the transfer of any such Security without
requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following
-----------------------------------------
provisions shall apply with respect to any transfer of a Security to a Non-
U.S. Person:
(i) Prior to September 10, 1998, the Registrar shall register any
proposed transfer of a Security to a Non-U.S. Person upon receipt of a
certificate substantially in the form of D hereto from the proposed
transferor.
(ii) On and after September 10, 1998, the Registrar shall
register any proposed transfer to any Non-U.S. Person if the Security
to be transferred is a U.S. Physical Security or an interest in U.S.
Global Securities, upon receipt of a certificate substantially in the
form of D hereto from the proposed transferor.
38
(iii) (a) If the proposed transferor is an Agent Member holding
a beneficial interest in the U.S. Global Securities, upon receipt by
the Registrar of (x) the documents, if any, required by paragraph (ii)
and (y) instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount at maturity of
the U.S. Global Securities in an amount equal to the principal amount
at maturity of the beneficial interest in the U.S. Global Securities
to be transferred, and (b) if the proposed transferee is an Agent
Member, upon receipt by the Registrar of instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an
increase in the principal amount at maturity of the Offshore Global
Securities in an amount equal to the principal amount at maturity of
the U.S. Physical Securities or the U.S. Global Securities, as the
case may be, to be transferred, and the Trustee shall cancel the
Physical Security, if any, so transferred or decrease the amount of
the U.S. Global Securities.
(f) Private Placement Legend. Upon the registration of transfer,
------------------------
exchange or replacement of Securities not bearing the Private Placement
Legend, the Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the
Registrar shall deliver only Securities that bear the Private Placement
Legend unless (i) the Private Placement Legend is no longer required by
Section 2.02, (ii) the circumstances contemplated by paragraph (a)(i)(x) of
this Section 2.08 exist or (iii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee
to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions
of the Securities Act.
(g) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and
in the Private Placement Legend and agrees that it will transfer such
Security only as provided in this Indenture. The Registrar shall not
register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. In
connection with any registration of transfer of Securities, each Holder
agrees by its acceptance of the Securities to furnish the Registrar or the
Company such certifications, legal opinions or other information as either
of them may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act; provided that the
--------
Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any
such certifications, legal opinions or other information.
39
The Registrar shall retain in accordance with its customary procedures
copies of all letters, notices and other written communications received
pursuant to Section 2.07 or this Section 2.08. The Company shall have the right
to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.09. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall issue and the Trustee shall authenticate a
replacement Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding; provided that the requirements of this Section
--------
2.09 are met. If required by the Trustee or the Company, an indemnity bond must
be furnished that is sufficient in the judgment of both the Trustee and the
Company to protect the Company, the Trustee or any Agent from any loss that any
of them may suffer if a Security is replaced. The Company may charge such
Holder for its expenses and the expenses of the Trustee in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may
pay such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities that have been authenticated by the Trustee except for
those cancelled by it, those delivered to it for cancellation and those
described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a protected
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Securities payable
on that date, then on and after that date such Securities cease to be
outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or one
of its Affiliates holds such Security.
SECTION 2.11. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have insertions, substitutions,
omissions and other variations determined to be appropriate
40
by the Officers executing the temporary Securities, as evidenced by their
execution of such temporary 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 2.04, 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 at maturity of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall be entitled to
the same benefits under this Indenture as definitive Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver to
------------
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold.
The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Securities surrendered for transfer, exchange, payment
or cancellation and shall destroy them in accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the
Company and the Trustee shall use CUSIP, CINS or ISIN numbers, as the case may
be, in notices of redemption or exchange as a convenience to Holders; provided
--------
that any such notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption or exchange and that reliance may be placed only on
the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any change in "CUSIP", "CINS" or "ISIN" numbers
for the Securities.
SECTION 2.14. Defaulted Interest. If the Company defaults in a
------------------
payment of interest on the Securities, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay, the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date. The Company shall fix or cause to be fixed any such special record
date and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail or cause to be mailed to each Securityholder a notice that states
the special record date, the payment date and the amount of defaulted interest
to be paid. The Company may make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements (if applicable) of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this paragraph, such manner of
payment shall be deemed practicable by the Trustee.
41
SECTION 2.15. Issuance of Additional Securities. The Company may,
---------------------------------
subject to Section 4.03 of this Indenture and applicable law, issue Additional
Securities under this Indenture. The Initial Securities issued on the Closing
Date and any Additional Securities subsequently issued shall be treated as a
single class for all purposes under this Indenture.
ARTICLE III
REDEMPTION
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to Section 3.07, it shall notify the Trustee in writing of
the redemption date, the principal amount of Securities to be redeemed and the
paragraph of the Securities pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection and Notice. If less than all of the
--------------------
Securities are to be redeemed at any time, selection of Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed, or, if the Securities are not so listed, on a pro rata basis (among the
Securities and any Additional Securities as one class), by lot or by such method
as the Trustee shall deem fair and appropriate; provided that no Securities in a
--------
principal amount at maturity of $1,000 or less shall be redeemed in part. If
any Security is to be redeemed in part only, the notice of redemption that
relates to such Security shall state the portion of the principal amount thereof
to be redeemed. On and after the redemption date, interest and Liquidated
Damages, if any, cease to accrue on Securities or portions of them called for
redemption (or, if such redemption date is prior to the Full Accretion Date,
Accreted Value of the Securities will cease to accrete).
SECTION 3.03. Notice. Notices of redemption shall be mailed by first
------
class mail at least 30 (or in the case of a "Special Mandatory Redemption"
described in Section 3.08, 15 days), but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at its registered
address. Notices of redemption may not be conditional. The Trustee shall
notify the Company promptly of the Securities or portions of Securities to be
redeemed.
42
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request (which may be revoked at any time in writing
prior to the time at which the Trustee shall have given such notice to the
Holders), the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest and Liquidated Damages, if
any, to the redemption date; provided that if the redemption date is after a
--------
regular record date and on or prior to the interest payment date, the accrued
interest shall be payable to the Securityholder of the redeemed Securities
registered on the relevant record date. If mailed in the manner herein, the
notice shall be conclusively presumed to have been given whether or not the
Holder receives such notice. Failure to give notice or any defect in the notice
to any Holder shall not affect the validity of the notice to any other Holder.
43
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New
---------------------------
York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Restricted Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest and Liquidated Damages, if any, on all
Securities to be redeemed on the redemption date other than Securities or
portions of Securities called for redemption that have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption. (a) Except as described in
-------------------
Section 3.07(b) or (c), the Securities will not be redeemable at the Company's
option prior to August 1, 2003. Thereafter, the Securities will be subject to
redemption at any time at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date (subject to the right of Holders on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the twelve-month period beginning on August 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003........................ 105.500%
2004........................ 103.667%
2005........................ 101.883%
2006 and thereafter......... 100.000
(b) In addition, at any time and from time to time, prior to August 1,
2001, the Company may redeem up to 35% of the sum of (i) the aggregate principal
amount at maturity of Securities and (ii) the aggregate principal amount at
maturity of any Additional Securities, at a redemption price of 111% of the
Accreted Value thereof (determined at the redemption date) plus Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds
received by the Company of a public offering of common stock of the Company,
provided that at least 65% of the sum of (i) the aggregate principal amount at
--------
maturity of Securities and (ii) the aggregate principal amount at maturity of
any Additional Securities remains outstanding immediately after the occurrence
of such redemption; and provided, further, that such redemption shall occur
-------- -------
within 60 days of the date of the closing of such public offering.
(c) At any time on or prior to August 1, 2003, the Securities may be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a
44
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event may any such redemption occur more than 90 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the Accreted
Value thereof (determined at the redemption date) plus the Applicable Premium
and Liquidated Damages thereon, if any, to the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date).
SECTION 3.08. Special Mandatory Redemption. In the event that the
----------------------------
Merger is not consummated prior to the earlier to occur of (i) January 10, 1999
and (ii) if it appears, in the sole judgment of the Company, that the Merger
shall not be consummated, the date on which notice of same is delivered by the
Company to the Collateral Agent and the Trustee, the Company shall be required
to redeem the Securities, in whole, on at least 15 days' prior written notice
mailed by first class mail to each Holder's last address as it appears in the
Security Register, at a redemption price equal to 101% of the Accreted Value
plus Liquidated Damages, if any, of the Securities on the date of repurchase to
the redemption date (the "Special Redemption Payment").
SECTION 3.09. Repurchase Offers. (a) In the event that the Company
-----------------
shall be required to commence an offer to all Holders to purchase Securities (a
"Repurchase Offer") pursuant to Section 4.06 hereof (an "Excess Proceeds Offer")
or pursuant to Section 4.08 hereof (a "Change of Control Offer") the Company
shall follow the procedures specified in this Section 3.09:
(i) Within 30 days after (A) a Change of Control (unless (1) the
Company is not required to make such offer pursuant to Section 4.08(c) or
(2) all Securities have been called for redemption pursuant to Section
3.07(a), 3.07(c) and 3.08 or (B) the Company is required to make an Asset
Sale Offer pursuant to Section 4.06, the Company shall (x) commence a
Repurchase Offer, which shall remain open for a period of at least 20
Business Days following its commencement (the "Offer Period") and (y) send,
by first class mail, a notice to the Trustee and each of the Holders which
shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to such Repurchase Offer. The
notice, which shall govern the terms of the Repurchase Offer, shall
describe the transaction or transactions that constitute the Change of
Control or Asset Sale requiring an Asset Sale Offer, as the case may be,
and shall state:
(A) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Section 4.06 or 4.08, as the case may be, as
applicable;
(B) the principal amount of Securities required to be purchased
pursuant to Section 4.06, in case of an Excess Proceeds Offer, or that
the Company is required to offer to purchase all of the outstanding
principal amount of Securities, in the case of a Change of Control
Offer (such amount, the "Offer
45
Amount"), the purchase price and, that on the date specified in such
notice (the "Purchase Date"), which date shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed,
the Company shall repurchase all Securities validly tendered and not
withdrawn pursuant to this Section 3.09 and Section 4.06 or 4.08, as
applicable;
(C) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(D) that, unless the Company defaults in making such payment,
Securities accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest after the Purchase Date;
(E) that Holders electing to have a Security purchased pursuant
to a Repurchase Offer may elect to have all or any portion of such
Security purchased;
(F) that Holders electing to have a Security purchased pursuant
to any Repurchase Offer shall be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security, or such other customary documents of
surrender and transfer as the Company may reasonably request, duly
completed, or transfer by book-entry transfer, to the Company, the
Depositary or the Paying Agent at the address specified in the notice
prior to the Purchase Date;
(G) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
delivered for purchase and a statement that such Holder is withdrawing
its election to have such Security purchased;
(H) that, in the case of an Excess Proceeds Offer, if the
aggregate principal amount of Securities surrendered by Holders
thereof exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (based upon the
outstanding principal amount thereof), with such adjustments as may be
deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be
purchased;
(I) that Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered (or transferred by
book-entry transfer); and
46
(J) the CUSIP number, if any, printed on the Securities being
repurchased and that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Securities.
(ii) On (or at the Company's election, before) the Purchase Date, the
Company shall, (A) to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary in the case of an Excess Proceeds Offer, the
Securities or portions thereof tendered pursuant to the Repurchase Offer
and not theretofore withdrawn, or if Securities aggregating less than the
Offer Amount have been tendered, all Securities tendered, and shall deliver
to the Trustee an Officers' Certificate stating that such Securities or
portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09, (B) deposit with the Paying Agent an
amount equal to the payment required in respect of all Securities or
portions thereof so tendered and (C) deliver or cause to be delivered to
the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities or
portions thereof being purchased by the Company. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in
any case not later than five days after the Purchase Date) mail or deliver
to each tendering Holder an amount equal to the Change of Control Payment
or the payment due to each respective Holder in respect of the Excess
Proceeds Offer, as applicable, with respect to the Securities tendered by
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Security, and the Trustee, upon written request from
the Company, shall authenticate and mail or deliver such new Security to
such Holder, in a principal amount equal to any unpurchased portion of the
Securities so surrendered, provided that each such new Security shall be in
--------
a principal amount of $1,000 or an integral multiple thereof. Any Security
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. On the Purchase Date, all Securities purchased by the
Company shall be delivered to the Trustee for cancellation. All Securities
or portions thereof purchased pursuant to the Repurchase Offer will be
canceled by the Trustee. The Company shall publicly announce the results
of the Repurchase Offer on or as soon as practicable after the Purchase
Date, but in no case more than five Business Days thereafter.
If the Company complies with the provisions of the preceding
paragraph, on and after the Purchase Date interest shall cease to accrue on the
Securities or the portions of Securities repurchased. If a Security is
repurchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Security was registered at the close of business on
such record date. If any Security called is not repurchased upon surrender
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the Purchase Date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Securities and
in Section 4.01 hereof.
47
(b) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations to the
extent such laws and regulations are applicable in connection with the
Repurchase Offer. To the extent that the provisions of any applicable securities
laws or regulations conflict with provisions of this Section 3.09, the Company
shall comply with such securities laws and regulations and shall not be deemed
to have breached its obligations under this Section by virtue thereof.
(c) Prior to complying with the provisions of this Section 3.09, but
in any event within 90 days following a Change of Control Offer or Asset Sale
Offer, as applicable, the Company shall either repay all outstanding Senior Debt
of the Company or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt of the Company to permit the repurchase of
Securities required by this Section 3.09 and Section 4.06 or 4.08, as
applicable.
(d) Once notice of repurchase is mailed in accordance with this
Section 3.09, all Securities validly tendered and not withdrawn (or, in the case
of an Excess Proceeds Offer, if the Company is not required to repurchase all of
such Securities then the pro rata portion of such Securities that the Company
may be required to purchase pursuant to Section 3.02 and/or 4.06 hereof, as
applicable) become irrevocably due and payable on the Purchase Date at the
purchase price specified herein. A notice of repurchase may not be conditional.
(e) Other than as specifically provided in this Section 3.09 or
Section 4.06 or 4.08, as applicable, any purchase pursuant to this Section 3.09
shall be made pursuant to the provisions of Sections 3.02 and 3.06 hereof.
SECTION 3.10. No Sinking Fund. There shall be no sinking fund for
---------------
the payment of principal on the Securities to the Securityholders.
ARTICLE IV
COVENANTS
---------
SECTION 4.01. Payment of Securities. The Company shall promptly pay
---------------------
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Unless otherwise specified in
the relevant Placement Agreement and set forth in an Officers' Certificate
delivered to the Trustee, principal and interest shall be considered paid on the
date due if on such date the Trustee or the Paying Agent (but only if other than
the Company or a Wholly Owned Restricted Subsidiary) holds by 11:00 a.m., New
York City time, in accordance with this Indenture available funds sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may
48
be, is not prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Reports. Notwithstanding that the Company may not be
-------
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, to the extent permitted by the Exchange Act, the Company
will file with the SEC, and provide within 15 days after the Company is required
to file the same with the SEC, the Trustee and the Holders with the annual
reports and the information, documents and other reports that are specified in
Sections 13 and 15(d) of the Exchange Act. In the event the Company is not
permitted to file such reports, documents and information with the SEC, the
Company will provide substantially similar information to the Trustee and the
Holders, as if the Company were subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act. The Company also shall comply with the other
provisions of TIA (S) 314(a).
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, Incur any Debt and the Company and Guarantors shall not issue
any Disqualified Stock and shall not permit any of its Restricted Subsidiaries
that are not Guarantors to issue any shares of Preferred Stock; provided,
--------
however, that the Company and its Restricted Subsidiaries may Incur Debt or
-------
issue shares of Disqualified Stock, if the Consolidated Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Debt is Incurred or such Disqualified Stock is issued would have been
at least 1.75 to 1.00 if such four-quarter period ends on or prior to the second
anniversary of the Issue Date and 2.00 to 1.00 if it ends thereafter, determined
on a pro forma basis (including a pro forma application of the net proceeds
--------- ---------
therefrom), as if the additional Debt had been Incurred, or the Disqualified
Stock had been issued, as the case may be, at the beginning of such four-quarter
period.
(b) The provisions of Section 4.03(a) shall not apply to the
Incurrence of any of the following items of Debt (collectively, "Permitted
Debt"):
(i) the Incurrence of term and revolving Debt, letters of credit
(with letters of credit being deemed to have a principal amount equal to
the undrawn face amount thereof) and other Debt under Credit Facilities
(including Guarantees by the Company or any of its Subsidiaries of
synthetic lease drawings and other loans under the New Credit Facility or
of other Debt under Credit Facilities); provided that the aggregate
--------
principal amount of such Debt outstanding pursuant to this clause (i) does
not exceed an amount equal to $250.0 million;
49
(ii) the Incurrence by the Company and its Restricted Subsidiaries
of Existing Debt;
(iii) the Incurrence by the Company of Debt represented by the
Securities and by the Guarantors of Debt represented by the Security
Guarantees;
(iv) the Incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt;
(v) the Incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net
proceeds of which are used to refund, refinance or replace Debt (other than
intercompany Debt) that was permitted by this Indenture to be Incurred;
(vi) the Incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Debt or Preferred Stock owed or issued to and
held by the Company and any of its Restricted Subsidiaries, provided,
--------
however, that (X) any such Debt of the Company shall be subordinated and
-------
junior in right of payment to the Securities and (Y) (A) any subsequent
issuance or transfer of Equity Interests or other action that results in
any such Debt or Preferred Stock being held by a Person other than the
Company or a Restricted Subsidiary and (B) any sale or other transfer of
any such Debt or Preferred Stock to a Person that is neither the Company
nor a Restricted Subsidiary shall be deemed, in each case, to constitute an
Incurrence of such Debt or issuance of such Preferred Stock by the Company
or such Restricted Subsidiary, as the case may be, that was not permitted
by this clause (vi);
(vii) the Incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are Incurred (A) principally for
the purpose of fixing or hedging interest rate risk with respect to any
floating rate Debt that is permitted by the terms of this Indenture to be
outstanding or (B) principally for the purpose of fixing or hedging
currency exchange rate risk or commodity price risk Incurred in the
ordinary course of business;
(viii) the guarantee by the Company or any Guarantor of Debt of the
Company or a Restricted Subsidiary of the Company that was permitted to be
Incurred by another provision of this Section 4.03;
(ix) Debt of the Company in respect of Exchange Debentures issued as
payment in kind interest on Exchange Debentures issued upon the exchange of
Exchangeable Preferred Stock, to the extent such interest payments are made
pursuant to the terms of the Exchange Debenture Indenture; provided the
issuance of the Exchange Debentures upon such exchange was permitted by
this covenant at the time of such exchange; and
50
(x) the Incurrence by the Company or any of its Restricted
Subsidiaries of additional Debt (which may comprise Debt under the New
Credit Facility) in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding pursuant to this clause (x) not to
exceed an amount equal to $20.0 million.
For purposes of determining compliance with this Section 4.03, in the
event that an item of Debt meets the criteria of more than one of the categories
of Permitted Debt described in clauses (i) through (x) above or is entitled to
be Incurred pursuant to Section 4.03(a), the Company shall, in its sole
discretion, classify such item of Debt in any manner that complies with this
covenant and such item of Debt will be treated as having been Incurred pursuant
to only one of such clauses or pursuant to Section 4.03(a); provided that all
--------
outstanding Debt under the New Credit Facility immediately following the
Recapitalization shall be deemed to have been Incurred pursuant to clause (i) of
the definition of Permitted Debt. Accrual of interest and the accretion of
accreted value will be deemed not to be an Incurrence of Debt for purposes of
this Section 4.03.
SECTION 4.04. Restricted Payments. (a) The Company shall not, and
-------------------
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution
(including any payment in connection with any merger or consolidation) on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) and dividends payable to the
Company or any Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation) any Equity
Interests of the Company (or any Restricted Subsidiary held by Persons
other than the Company or any Restricted Subsidiary);
(iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Subordinated Debt of
the Company, except (A) a payment of interest, principal or other related
Obligations at Stated Maturity and (B) the purchase, repurchase or other
acquisition or retirement of Subordinated Debt of the Company in
anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of
purchase, repurchase or other acquisition or retirement; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv)
above being collectively referred to as "Restricted Payments"), unless, at
the time of, and after giving effect to, such Restricted Payment:
51
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof,
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
---------
been made at the beginning of the applicable four-quarter period, have been
permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated Coverage Ratio test set forth in Section 4.03(a), and
(3) such Restricted Payment, together with (without duplication) the
aggregate amount of all other Restricted Payments made by the Company and
its Restricted Subsidiaries after the first Issue Date (excluding
Restricted Payments permitted by Section 4.04(b)(ii), Section
4.04(b)(iii)(A), Section 4.04(b)(iv), Section 4.04(b)(v), Section
4.04(b)(vi)(A) and Section 4.04(b)(vii), but including all other Restricted
Payments permitted by Section 4.04(b)), is less than the sum (without
duplication) of
(i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of
the fiscal quarter during which the first Issue Date occurs to
the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by
the Company from the issue or sale (other than to a Subsidiary)
of, or from capital contributions with respect to, Equity
Interests of the Company (other than Disqualified Stock), in
either case after the first Issue Date, plus
(iii) the aggregate principal amount (or accreted value, if
less) of Debt or Disqualified Stock of the Company or any
Restricted Subsidiary issued since the first Issue Date (other
than to a Restricted Subsidiary) that has been converted into
Equity Interests (other than Disqualified Stock) of the Company,
plus
(iv) 100% of the aggregate net cash received by the Company
or a Restricted Subsidiary of the Company since the first Issue
Date from (A) Restricted Investments, whether through interest
payments, principal payments, dividends or other distributions or
payments, or the sale or other disposition (other than to the
Company or a Restricted Subsidiary) thereof made by the Company
and its Restricted Subsidiaries and (B) a
52
cash dividend from, or the sale (other than to the Company or a
Restricted Subsidiary) of the stock of, an Unrestricted
Subsidiary, plus
(v) upon the redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the fair market value of the
Investments of the Company and its Restricted Subsidiaries (other
than such Subsidiary) in such Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would have
complied with the provisions of this Section 4.04;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Equity Interests or Subordinated Debt in exchange for,
or out of the net cash proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of, other Equity Interests
(other than any Disqualified Stock) of, or a capital contribution to, the
Company; provided that the amount of any such net cash proceeds that are
--------
utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from Section 4.04(a)(iv)(3)(ii);
(iii) the redemption, repurchase, retirement, defeasance or other
acquisition of (A) Subordinated Debt made by an exchange for, or with the
net cash proceeds from an Incurrence of, Permitted Refinancing Debt or (B)
Subordinated Debt (including Exchange Debentures) or Preferred Equity
Interests (other than Subordinated Debt or Preferred Equity Interests held
by Affiliates of the Company) upon a Change of Control or Asset Sale to the
extent required by the agreement governing such Subordinated Debt or the
certificate of designation governing such Preferred Equity Interests, as
the case may be, but only (x) if the Company shall have complied with
Section 4.06 or 4.08, as the case may be, and repurchased all Securities
tendered pursuant to the offer required by such covenants prior to
purchasing or repaying such Subordinated Debt or Preferred Equity
Interests, as the case may be, (y) in the case of an Asset Sale, to the
extent of the remaining Excess Proceeds offered to Holders pursuant to the
Asset Sale Offer and (z) within six months after the date such offer is
consummated;
(iv) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its common Equity Interests on a pro rata basis;
(v) to the extent constituting Restricted Payments, the Specified
Affiliate Payments;
(vi) (A) the payment of any regular quarterly dividends in respect
of the Exchangeable Preferred Stock in the form of additional shares of
Exchangeable
53
Preferred Stock having the terms and conditions set forth in the
Certificate of Designation for the Exchangeable Preferred Stock as in
effect on the first Issue Date; and (B) commencing November 1, 2003, the
payment of regular quarterly cash dividends (in the amount no greater than
that provided for in the Certificate of Designation for the Exchangeable
Preferred Stock as in effect on the first Issue Date), out of funds legally
available therefor, on any of the shares of Exchangeable Preferred Stock
issued on the first Issue Date or subsequently issued in payment of
dividends in respect of such shares of Exchangeable Preferred Stock issued
on the first Issue Date, provided that, at the time of and immediately
--------
after giving effect to the payment of such cash dividend, no Default or
Event of Default shall have occurred and be continuing;
(vii) the exchange of Exchangeable Preferred Stock for Exchange
Debentures in accordance with the terms of the Certificate of Designation
for such Exchangeable Preferred Stock as in effect on the Issue Date,
provided that such exchange is permitted by Article 4; and
--------
(viii) Restricted Payments in an aggregate amount not to exceed $10.0
million.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default or an
Event of Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated, to the extent they do not
constitute Permitted Investments at the time such Subsidiary became an
Unrestricted Subsidiary, will be deemed to be Restricted Payments made at the
time of such designation. The amount of such outstanding Investments will be
equal to the portion of the fair market value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary that is represented by the interest of the Company and
its Restricted Subsidiaries in such Subsidiary, in each case as determined in
good faith by the Board of Directors of the Company. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any noncash Restricted Payment shall be determined in
good faith by the Board of Directors of the Company.
In making the computations required by this covenant, (i) the Company
or the relevant Restricted Subsidiary may use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (ii) the Company or the relevant
Restricted Subsidiary will be permitted to rely in good faith on the
54
financial statements and other financial data derived from the books and records
of the Company and the Restricted Subsidiary that are available on the date of
determination. If the Company makes a Restricted Payment that, at the time of
the making of such Restricted Payment, would, in the good faith determination of
the Company or any Restricted Subsidiary, be permitted under the requirements of
this Indenture, such Restricted Payment will be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's or any Restricted Subsidiary's financial
statements affecting Consolidated Net Income of the Company for any period.
For the avoidance of doubt, it is expressly agreed that no payment or
other transaction permitted by Sections 4.07(b)(3), 4.07(b)(4) and 4.07(b)(5)
shall be considered a Restricted Payment for purposes of, or otherwise
restricted by, this Indenture.
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
-------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
-----------------------
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any Debt owed to the Company or any of
its Restricted Subsidiaries, (ii) make loans or advances to the Company or any
of its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of:
(1) Existing Debt,
(2) this Indenture, the Securities, the Additional Securities, the
Exchangeable Preferred Stock and any Additional Exchangeable Preferred
Stock (as defined in the Certificate of Designation for the Exchangeable
Preferred Stock), the Exchange Debentures or the Exchange Debenture
Indenture and any other agreement entered into after the first Issue Date,
provided that the encumbrances or restrictions in such agreements are not
--------
materially more restrictive than those contained in the foregoing
agreements,
(3) any agreement or other instrument of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (but not created in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired,
(4) purchase money obligations (including Capital Lease Obligations)
for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property
so acquired,
55
(5) in the case of clause (iii) above, any encumbrance or restriction
(1) that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or
similar contract, (2) by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of the
Company or any Restricted Subsidiary not otherwise prohibited by this
Indenture or (3) contained in security agreements or mortgages securing
Debt to the extent such encumbrance or restriction restricts the transfer
of the property subject to such security agreements or mortgages,
(6) contracts for the sale of assets, including any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Restricted Subsidiary pending the closing of such
sale or disposition,
(7) contractual encumbrances or restrictions in effect on the Closing
Date, including pursuant to the New Credit Facility and its related
documentation,
(8) restrictions on cash or other deposits or net worth imposed by
leases, credit agreements or other agreements entered into in the ordinary
course of business,
(9) customary provisions in joint venture agreements and other
similar agreements,
(10) any encumbrances or restrictions created with respect to (i) Debt
of Guarantors permitted to be Incurred subsequent to the first Issue Date
pursuant to Section 4.03 and (ii) Debt of Subsidiary Non-Guarantors
permitted to be Incurred subsequent to the Issue Date pursuant to Section
4.03 or operating leases, provided that in the case of this clause (ii) the
--------
Board of Directors of the Company determines (as evidenced by a Board
Resolution of the Board of Directors) in good faith at the time such
encumbrances or restrictions are created that such encumbrances or
restrictions would not reasonably be expected to impair the ability of the
Company to make payments of interest, Liquidated Damages (if any) and
scheduled payments of principal on the Securities, in each case as and when
due; and
(11) any encumbrances or restrictions of the type referred to in
clauses (1), (2) and (3) above imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in
clauses (1) through (10), provided that such amendments, modifications,
--------
restatements, renewals, increases, supplements, refundings, replacements or
refinancings, taken as a whole, are, in the good faith judgment of the
Company, not materially more restrictive with respect to such encumbrances
or restrictions than those contained in the contracts, instruments or
obligations prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.
56
SECTION 4.06. Asset Sales. The Company shall not, and shall not
-----------
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of
and (ii) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents; provided
--------
that the amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Securities or, in the case of liabilities of a Guarantor,
the Security Guarantee of such Guarantor) that are assumed by the transferee of
any such assets, or from which the Company and its Restricted Subsidiaries are
released in writing by the creditor with respect thereto, and (y) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash (to the extent of the cash received) within
180 days after receipt shall be deemed, in each case, to be cash for purposes of
this provision; provided, further, however, that this clause (ii) shall not
-------- ------- -------
apply to any sale of Equity Interests of or other Investments in Unrestricted
Subsidiaries.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay Senior
Debt, Debt of any Restricted Subsidiary or Pari Passu Debt (other than Debt owed
to the Company or a Subsidiary of the Company, and provided that if the Company
--------
shall so reduce Pari Passu Debt, it will equally and ratably make an Asset Sale
Offer (in accordance with the procedures set forth in Section 3.09 for an Asset
Sale Offer) to all Holders), (b) to invest in properties and assets that will be
used or useful in the business of the Company or any of its Subsidiaries or (c)
to the acquisition of a controlling interest in another business, the making of
a capital expenditure or the acquisition of other assets, in each case, that
will be used or useful in the business of the Company or any of its Restricted
Subsidiaries; provided that if during such 360-day period the Company or a
--------
Restricted Subsidiary enters into a definitive agreement committing it to apply
such Net Proceeds in accordance with the requirements of clause (b) or (c) such
360-day period will be extended for a period not to exceed 180 days with respect
to the amount of Net Proceeds so committed until required to be paid in
accordance with such agreement (or, if earlier, until termination of such
agreement). Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall (i) make an offer to all Holders of Securities, and
(ii) prepay, purchase or redeem (or make an offer to do so) any other Pari Passu
Debt of the Company in accordance with provisions requiring the Company to
prepay, purchase or redeem such Debt with the proceeds from any Asset Sales (or
offer to do so), pro rata in proportion to the respective principal amounts (or
accreted value, as applicable) of the Securities and such other Debt required to
be prepaid, purchased or redeemed or tendered for, in the case of the Securities
pursuant to such offer (an "Asset Sale Offer"), to purchase the maximum
principal amount of Securities that may be purchased out of such pro rata
portion of the Excess Proceeds, at an offer price in cash in an amount equal to
100% of their principal amount plus
57
accrued and unpaid interest and Liquidated Damages (or, if prior to the Full
Accretion Date, 100% of the Accreted Value thereof on the date of purchase, plus
Liquidated Damages (if any) to the date of purchase subject to the right of
Holders of record on a record date to receive interest on the relevant interest
payment date, in accordance with the procedures set forth in Section 3.09). To
the extent that the aggregate principal amount (or, if prior to the Full
Accretion Date, the aggregate Accreted Value) of Securities and Pari Passu Debt
tendered pursuant to an Asset Sale Offer or other offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount (or Accreted Value, as the
case may be) of Securities surrendered by Holders thereof exceeds the pro rata
portion of such Excess Proceeds to be used to purchase Securities, the Trustee
shall select the Securities to be purchased on a pro rata basis. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.07. Transactions with Affiliates. (a) The Company shall
----------------------------
not, and shall not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that, taken as a whole,
are no less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction entered into after the first Issue Date involving
aggregate consideration in excess of $3.0 million, a Board Resolution
certifying that such Affiliate Transaction complies with clause (i) above
and that such Affiliate Transaction has been approved by a majority of the
members of the Board of Directors and (b) with respect to any Affiliate
Transaction involving aggregate consideration in excess of $10.0 million,
an opinion as to the fairness to the Holders of such Affiliate Transaction
from a financial point of view issued by an investment banking, appraisal
or accounting firm of national standing.
(b) The provisions of Section 4.07(a) shall not prohibit (and, the
following shall not be deemed to be Affiliate Transactions):
(1) transactions between or among the Company and/or its Restricted
Subsidiaries;
(2) Permitted Investments and Restricted Payments that are permitted
by Section 4.04;
58
(3) employment agreements, employee benefit plans and related
arrangements entered into in the ordinary course of business and all
payments and other transactions contemplated thereby;
(4) any payments to Investcorp and its Affiliates (whether or not
such Persons are Affiliates of the Company) (A) for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including in connection with acquisitions or
divestitures, which payments are approved by the Board of Directors of the
Company in good faith and (B) of annual management, consulting and advisory
fees and related expenses;
(5) any agreement in effect on the Closing Date (including the
Recapitalization Agreement, the Services Agreement (as amended on April 15,
1998) between the Berkshire Companies Limited Partnership and the Company
and the Brevard lease agreement) or any amendment thereto (so long as any
such amendment is not disadvantageous to the Holders in any material
respect) or any payment or other transaction contemplated by any of the
foregoing; and
(6) Debt permitted by Section 4.03(b)(x) to the extent such Debt is
on terms that, taken as a whole, are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained
in a comparable transaction with an unrelated Person.
SECTION 4.08. Change of Control. (a) Upon the occurrence of a
-----------------
Change of Control, unless all Securities have been called for redemption
pursuant to the provisions in Section 3.07 or 3.08, each Holder of Securities
shall have the right to require the Company to repurchase all or any part (equal
to a principal amount at maturity of $1,000 or an integral multiple thereof) of
such Holder's Securities pursuant to a Change of Control Offer made pursuant to
Section 3.09 at an offer price in cash (the "Change of Control Payment") equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (or, if
such Change of Control Offer occurs prior to the Full Accretion Date, 101% of
the Accreted Value thereof on the date of repurchase plus Liquidated Damages
thereon, if any).
(b) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes and consummates a Change
of Control Offer.
SECTION 4.09. Compliance Certificate. The Company and each Guarantor
----------------------
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they would
normally have knowledge of any Default or Event of Default and whether or not
the signers know of any Default or Event of Default that occurred during such
period. If they do have such knowledge, the certificate shall describe the
Default
59
or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.
SECTION 4.10. Liens. The Company shall not, and shall not permit any
-----
of its Restricted Subsidiaries to, create, Incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Debt or trade
payables (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired, unless all payments due under this Indenture and
the Securities are secured on an equal and ratable basis with the obligations so
secured until such time as such obligations are no longer secured by a Lien;
provided that (i) if such other Debt constitutes Subordinated Debt or is
--------
otherwise subordinate or junior in right of payment to the Obligations under
this Indenture, the Securities or any Security Guarantee, as the case may be,
such Lien is expressly made prior and senior in priority to the Lien securing
such other Debt, or (ii) in any other case, such Lien ranks equally and ratably
with or prior to the Lien securing the other Debt or obligations so secured.
SECTION 4.11. Additional Security Guarantees. All future
------------------------------
Subsidiaries of the Company who guarantee any Debt of the Company under the New
Credit Facility, other than Subsidiaries that have been properly designated as
Unrestricted Subsidiaries in accordance with this Indenture for so long as they
continue to constitute Unrestricted Subsidiaries, shall be Guarantors in
accordance with the terms of this Indenture until released from such Guarantee
of the New Credit Facility.
Each future Security Guarantee shall be limited to an amount not to
exceed the maximum amount that can be Guaranteed by that Subsidiary without
rendering the Security Guarantee, as it relates to such Subsidiary, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally. Each future Security
Guarantee shall be subordinated to Senior Debt of the respective Guarantor on
the same basis and to the same extent as the Securities are subordinated to
Senior Debt of the Company.
SECTION 4.12. Restriction on Senior Subordinated Debt. The Company
---------------------------------------
shall not Incur any Debt that is expressly subordinate in right of payment to
any Senior Debt and senior in any respect in right of payment to the Securities
and no Guarantor shall Incur any Debt that is expressly subordinate in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Security Guarantee of such Guarantor.
ARTICLE V
SUCCESSOR COMPANY
-----------------
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially
-----------------------------------------------------
All Assets of the Company. The Company shall not consolidate or merge with or
-------------------------
into (whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or
60
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another Person unless:
(i) the Company is the surviving corporation or the Person formed
by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company under the Securities
and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists;
(iv) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or the
Person formed by or surviving any such consolidation or merger (if other
than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made shall, at the time of
such transaction and after giving pro forma effect thereto as if such
---------
transaction had occurred at the beginning of the applicable four-quarter
period, either (x) be permitted to Incur at least $1.00 of additional Debt
pursuant to the Consolidated Coverage Ratio test set forth in Section
4.03(a) or (y) have a Consolidated Coverage Ratio at least equal to the
Consolidated Coverage Ratio of the Company for such four-quarter reference
period; and
(v) the Company or the surviving corporation, as the case may be,
shall have delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to
such transaction have been satisfied.
Notwithstanding the foregoing clauses (iii) and (iv) above, (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company, (b) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction and (c) the Company may merge with and into Harborside.
61
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially
-----------------------------------------------------
All Assets of a Guarantor. No Guarantor may consolidate with or merge with or
-------------------------
into (whether or not such Guarantor is the surviving Person) another Person
(other than the Company or another Guarantor) unless (i) subject to the
provisions of Section 11.02(b), the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor), assumes all the
obligations of such Guarantor under the Securities and this Indenture pursuant
to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, and (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
Notwithstanding the foregoing clause (ii), (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to any Guarantor and (b) any Guarantor may merge with an
Affiliate incorporated solely for the purpose of reincorporating such Guarantor
in another jurisdiction.
ARTICLE VI
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01. Events of Default and Remedies.
------------------------------
Each of the following constitutes an Event of Default with respect to
the Securities if:
(1) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Securities (whether
or not prohibited by the provisions of Article X);
(2) the Company defaults in payment when due of the principal of or
premium, if any, on the Securities (whether or not prohibited by the
provisions of Article X);
(3) the Company fails for 30 days after receipt of a Notice of
Default to comply with the provisions in Sections 4.03, 4.04, 4.06, 4.08
and 5.01;
(4) the Company fails for 60 days after receipt of a Notice of
Default specifying such failure to comply with any of its other agreements
in this Indenture or the Securities;
(5) the Company or any Restricted Subsidiary that is a Significant
Subsidiary fails to pay any Debt within any applicable grace period after
final maturity or acceleration by the holders thereof because of a default
if the total amount of such Debt unpaid or accelerated at the time exceeds
$15.0 million;
62
(6) any judgment or decree for the payment of money in excess of
$15.0 million (net of any insurance or indemnity payments actually received
in respect thereof prior to or within 90 days from the entry thereof, or to
be received in respect thereof in the event any appeal thereof shall be
unsuccessful) shall be entered against the Company or any Significant
Subsidiary that is a Restricted Subsidiary and is not discharged, waived or
stayed and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (B) there shall be a period of 90
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed;
(7) except as permitted by this Indenture, any Security Guarantee by
a Guarantor that is a Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to
be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Security Guarantee;
(8) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency; or
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or for any substantial
part of its property; or
(C) orders the winding-up or liquidation of the Company or any
Restricted Subsidiary that is a Significant Subsidiary;
63
or any similar relief is granted under any foreign laws and the order or
decree relating thereto remains unstayed and in effect for 60 days:
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
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.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
------------------
similar federal or state law for the relief of debtors. For purposes of this
Section, the term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (3) or (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities notify the Company (and the Trustee, in the case of
notices to the Company by Holders) in writing by registered or certified mail,
return receipt requested, of the Default and the Company does not cure such
Default within the time specified in clauses (3) or (4) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, forthwith upon any Senior
Officer obtaining actual knowledge of any Default, written notice in the form of
an Officers' Certificate of any Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If any Event of Default occurs and is
------------
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in principal amount of the then outstanding Securities by notice to the Company
and the Trustee may declare all the Securities to be due and payable. Upon such
a declaration, such amounts shall be due and payable immediately; provided,
--------
however, that if upon such declaration there are any amounts outstanding under
-------
the New Credit Facility and the amounts thereunder have not been accelerated,
such amounts shall be due and payable upon the earlier of the time such amounts
are accelerated or five Business Days after receipt by the Company and the
Representative of the lenders under the New Credit Facility of such declaration.
Notwithstanding the foregoing, in the case of an Event of Default under clause
(8) or (9) with respect to the Company, all outstanding Securities will become
due and payable without further action or notice. The Holders of a majority in
aggregate principal amount of the Securities by written notice to the Trustee
may, on behalf of all the Holders, rescind an acceleration and its consequences
if the recession would not conflict with any judgment or decree and if all
existing Defaults or Events of Default have been cured or waived except
nonpayment of principal or interest that has become due because of such
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
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SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative (to the
extent permitted by law).
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
-----------------------
aggregate principal amount of the Securities then outstanding by written notice
to the Trustee may on behalf of the Holders of all of the Securities waive any
existing Default or Event of Default and its consequences except (i) a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Securities or (ii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured and ceases to exist and
any Event of Default arising therefrom shall be deemed to have been cured and
waived for every purpose under this Indenture, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any consequent
right.
SECTION 6.05. Control by Majority. The Holders of a majority in
-------------------
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee by this Indenture.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
-------- -------
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
-------------------
receive payment of principal, premium (if any), interest or Liquidated Damages
when due, a Security holder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) such Holder has previously given the Trustee written notice that
an Event of Default is continuing;
(2) Holders of at least 25% in principal amount at maturity of the
outstanding Securities have requested the Trustee to pursue the remedy;
65
(3) such Holder has offered the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount at maturity of the
outstanding Securities have not given the Trustee a direction inconsistent
with such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and Liquidated Damages and interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.01(a)(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
any Guarantor, their creditors or their property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders in any election of
a trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
66
SECOND: to the holders of Senior Debt to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, and any Liquidated Damages
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal, any Liquidated Damages and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
---------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
--------------------------------
nor any Guarantor (to the extent they may lawfully do so) shall 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 wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VII
TRUSTEE
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
67
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise Incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
68
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
-----------------
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
-------- -------
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(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, consent, order, approval,
bond, debenture, note or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in principal
amount of the Securities at the time outstanding, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see 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 shall not be required to give any note, bond or
surety in respect of the execution of the trusts and powers under this
Indenture.
(h) The permissive rights of the Trustee to take any action
enumerated in this Indenture shall not be construed as a duty to take such
action.
(i) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have
69
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
(j) The Trustee shall not be charged with knowledge of any Default or
Event of Default, of the identity of any Restricted Subsidiary or the
existence of any Change of Control or Asset Sale unless either (i) a Trust
Officer shall have received notice thereof or (ii) the Trustee shall have
received written notice thereof from the Company or any Holder.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Subsidiary Guarantee or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
------------------
continuing and is known to the Trustee, the Trustee shall mail to each Holder
notice of the Default within the earlier of 90 days after it occurs or 30 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in the payment of principal of,
premium (if any), interest or Liquidated Damages on any Security, the Trustee
may withhold notice if and so long as a committee of its trust officers in good
faith determines that withholding notice is in the interests of Securityholders.
Notwithstanding anything to the contrary expressed in this Indenture, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
hereunder, except in the case of an Event of Default under Section 6.01(a) and
(b) hereof (provided that the Trustee is Paying Agent), unless and until a Trust
Officer receives written notice thereof at its Corporate Trust Office specified
in Section 13.02, from the Company or a Holder that such Default or Event of
Default has occurred.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall
-----------------------------
transmit to the Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times and in
the manner provided pursuant thereto. To the extent that any such report is
required by the TIA with respect to any 12-month period, such report shall cover
the 12-month period ending December 31 and shall be transmitted by the next
succeeding March 1.
70
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time such compensation as is agreed to in writing by
the Trustee and Company for the Trustee's services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket disbursements, advances and expenses Incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, jointly but not severally, shall
indemnify the Trustee and its officers, directors, shareholders, agents and
employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, liability or expense (including reasonable
attorneys' fees) Incurred by them without negligence or bad faith on their part
arising out of or in connection with the acceptance or administration of this
Indenture or the Securities and the performance of their duties hereunder,
including the cost and expense of enforcing this Indenture against the Company
or any Guarantor (including this Section 7.07), and defending itself against any
claim (whether asserted by a Holder or any other person). The Trustee and its
officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided that any failure so to notify the Company shall not relieve
--------
the Company or any Guarantor of its indemnity obligations hereunder. The
Company shall defend the claim and the Indemnified Party shall provide
reasonable cooperation at the Company's expense in the defense. Such
Indemnified Parties may have separate counsel and the Company shall pay the fees
and expenses of such counsel; provided that the Company shall not be required to
--------
pay such fees and expenses if it assumes such Indemnified Parties' defense and,
in such Indemnified Parties' reasonable judgment, there is no conflict of
interest between the Company and such parties in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense Incurred by an Indemnified Party through such party's own
willful misconduct, negligence or bad faith. The Company need not pay any
settlement made without its consent (which consent shall not be unreasonably
withheld).
To secure the Company's payment obligations in this Section and all
other obligations to the Trustee pursuant to this Indenture, including all fees,
expenses and rights to indemnification, the Trustee shall have a lien on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest and any Liquidated Damages on
particular Securities. Such lien shall survive the satisfaction and
71
discharge of this Indenture and the resignation or removal of the Trustee. The
Trustee's right to receive payment of any amounts due under this Indenture shall
not be subordinated to any other indebtedness of the Company and the Securities
shall be subordinate to the Trustee's rights to receive such payment.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any Bankruptcy Law or the resignation or
removal of the Trustee. When the Trustee Incurs expenses after the occurrence
of a Default specified in Section 6.01(a)(8) or (9) with respect to the Company,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
----------------------
time by so notifying the Company in writing. The Holders of a majority in
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not, within
a reasonably prompt period, appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
72
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee, provided that such Person shall be
--------
qualified and eligible under this Article VII.
In case at the time such successor or successors, by merger,
conversion or consolidation 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 to the Trustee; and in all such cases such certificates 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.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
-------- -------
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
out standing if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 8.01. Legal Defeasance and Covenant Defeasance. (a) The
----------------------------------------
Company may, at the option of its Board of Directors evidenced by a Board
Resolution, at any
74
time, elect to have either Section 8.01(b) or 8.01(c) hereof be applied to all
outstanding Securities upon compliance with the conditions set forth below in
this Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) hereof of the
option applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Securities and any Security Guarantee on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and each Guarantor shall be deemed to
have paid and discharged the entire Debt represented by the outstanding
Securities and any Security Guarantee, which Securities and Security Guarantees
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.03 hereof and the other Sections of this Indenture referred to in clauses (i)
and (ii) below, and to have satisfied all their other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive, solely from the trust fund described in Article VIII hereof, as more
fully set forth in such Article, payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Securities
when such payments are due, (ii) the Company's obligations with respect to the
Securities under Sections 2.04, 2.06 and 2.09 and the rights, powers, trusts,
duties and immunities of the Trustee, and (iii) the Company's obligations in
connection therewith and this Article VIII. Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.01(b)
notwithstanding the prior exercise of its option under Section 8.01(c) hereof.
(c) Upon the Company's exercise under Section 8.01(a) hereof of the
option applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 5.01(iv) hereof with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration of act of Holders (and the consequences of any
thereof) in connection with such Sections, but shall continue to be deemed
"outstanding" for all the other purposes hereunder (it being understood that
such Securities and the related Security Guarantees shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to any term, condition or limitation set forth in any
such Section, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section 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
6.01 hereof, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.01(a) hereof of the option applicable to this Section
8.01(c) hereof, subject to the
74
satisfaction of the conditions set forth in Section 8.02, Sections 6.01(4),
6.01(5) (with respect to compliance with Section 4.09 only), 6.01(6), 6.01(7)
(with respect to Subsidiaries of the Company only), 6.01(8) (with respect to
Subsidiaries of the Company only), 6.01(9) and 6.01(10) shall not constitute
Events of Default.
SECTION 8.02. Conditions to Legal or Covenant Defeasance. The
------------------------------------------
following shall be the conditions to the application of either Section 8.01(b)
or 8.01(c) hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or the Guarantors must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Securities cash in
U.S. dollars, Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, and interest and Liquidated Damages on the outstanding Securities
on the stated maturity or on the applicable redemption date, as the case
may be, and the Company and the Guarantors must specify whether the
Securities are being defeased to maturity or to a particular redemption
date;
(b) in the case of Legal Defeasance, the Company or the Guarantors
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, (1) the Company and the Guarantors
have received from, or there has been published by, the Internal Revenue
Service a ruling or (2) since the Issue Date, there has been a change in
the applicable federal income tax law, in either case to the effect that,
and, based thereon, such Opinion of Counsel shall confirm that, subject to
customary assumptions and exclusions, the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of Covenant Defeasance, the Company or the Guarantors
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the
75
borrowing of funds to be applied to such deposit and the grant of any Lien
securing such borrowing) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company or the Guarantors must have delivered to the Trustee
an Opinion of Counsel, subject to customary assumptions and exclusions, to
the effect that after the 91st day following the deposit, the trust funds
will not be part of any "estate" formed by the bankruptcy or reorganization
of the Company or subject to the "automatic stay" under the Bankruptcy Code
or, in the case of Covenant Defeasance, will be subject to a first priority
Lien in favor of the Trustee for the benefit of the Holders;
(g) the Company or the Guarantors must deliver to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company
or the Guarantors with the intent of preferring the Holders of Securities
over the other creditors of the Company or the Guarantors, as applicable,
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company or the Guarantors, as applicable, or others; and
(h) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel (which opinion of counsel may be subject to
customary assumptions and exclusions), each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.
SECTION 8.03. Deposited Money and Government Securities to Be Held in
-------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to Section 8.04 hereof, all
-------------------------------------
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.03, the "Trustee") pursuant to Section 8.02 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium and Liquidated Damages if any, and interest but such money need not be
segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time, upon the request
of the Company, any money or Government Obligations held by it as provided in
Section 8.02 hereof that, in the
76
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.02(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Repayment to Company. Any money deposited with the
--------------------
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on any Security and remaining unclaimed for two years after such principal,
premium and Liquidated Damages, if any, or interest has become due and payable
shall be paid to the Company on its 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 Wall Street Journal
-------------------
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any United States dollars or Government Obligations in
accordance with this Article VIII by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities and the Guarantors obligations under this Indenture and the Security
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with this Article VIII;
provided, however, that if the Company or any Guarantor makes any payment of
-------- -------
principal of, premium and Liquidated Damages, if any, or interest on any
Security following the reinstatement of its obligations, the Company or any
Guarantor, as the case may be, 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.
SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the
---------------------------------------
request of the Company, this Indenture will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
Securities, as expressly provided for herein or pursuant hereto), the Company
and the Guarantors will be discharged from their obligations under the
Securities and Security Guarantees and the Trustee, at the expense of the
Company, will execute proper instruments acknowledging satisfaction and
discharge of this Indenture, any security agreements relating thereto, the
Securities and the Security Guarantees when:
(a) either (i) all the Securities theretofore authenticated and
delivered (other than mutilated, destroyed, lost or stolen Securities that
have been replaced or paid and
77
Securities that have been subject to defeasance under this Article VIII)
have been delivered to the Trustee for cancellation or (ii) all Securities
not theretofore delivered to the Trustee for cancellation (A) have become
due and payable, (B) shall become due and payable at maturity within one
year or (C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and the expense, of the Company, and
the Company has irrevocably deposited or caused to be deposited with the
Trustee funds in trust for the purpose in an amount sufficient to pay and
discharge the entire Debt on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium and Liquidated
Damages, if any, on) and interest on the Securities to the date of such
deposit (in case of Securities that have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable under
this Indenture by this Company; or
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided in this Indenture relating to the satisfaction and discharge of
this Indenture, the security agreements relating thereto, the Securities
and the Security Guarantees have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section,
the obligations of the Trustee under Section 8.06 and Section 2.04 shall
survive.
ARTICLE IX
AMENDMENTS
----------
SECTION 9.01. Without Consent of Holders. Notwithstanding Section
--------------------------
9.02, the Company and the Trustee may amend or supplement this Indenture, the
Securities, the Security Guarantees or the Pledge Agreement without notice to or
the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated
--------
Securities are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code);
78
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Securities in the case of a merger, consolidation
or sale of assets;
(4) to release any Security Guarantee or collateral in accordance
with the provisions of this Indenture or the Pledge Agreement;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights or
benefits to the Holders of Securities or that, as determined by the Board
of Directors in good faith, does not have a material adverse effect on the
legal rights under this Indenture of any such Holder;
(7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(8) to make any change to Article II, Section 4.01 or the Exhibits
hereto that applies only to Additional Securities (other than a change
relating to other provisions of this Indenture incorporated or referenced
in Article II, Section 4.01 or any such Exhibit).
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. Except as provided in this
-----------------------
Section 9.02 and Section 9.01, this Indenture, the Securities, the Security
Guarantees and the Pledge Agreement may be amended or supplemented without
notice to any Securityholders but with the consent of the Holders of at least a
majority in principal amount at maturity of the Securities then outstanding
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Securities), and any existing default or noncompliance
with any provision of this Indenture or the Securities may be waived with the
consent of the Holders of a majority in principal amount at maturity of the then
outstanding Securities (including consents obtained in connection with a tender
offer or exchange offer for Securities). However, without the consent of each
Holder affected thereby, an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder):
79
(i) reduce the principal amount at maturity of Securities whose
Holders must consent to an amendment, supplement or waiver,
(ii) reduce the principal of, change the fixed maturity of any
Security, reduce any premium payable upon optional redemption of the
Securities or otherwise alter the provisions with respect to the redemption
or repurchase of the Securities (other than provisions relating to the
covenants described in Sections 3.09, 4.06 and 4.08,
(iii) reduce the rate of or change the time for payment of interest
on any Security, or reduce the rate of accretion on the Accreted Value or
extend the period during which no interest accrues on the Securities,
(iv) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the payment
default that resulted from such acceleration),
(v) make any Security payable in money other than that stated in
the Securities,
(vi) impair the rights of Holders of the Securities to receive
payments of principal of or premium, if any, on the Securities,
(vii) make any change to Section 6.04 or 6.07 or this 9.02, or
(viii) except as permitted by this Indenture, release any Security
Guarantee or any collateral under the Pledge Agreement.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the
80
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Security or portion of the Security if the Trustee
receives written notice of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes effective, it shall bind
every Securityholder. Except if otherwise specified in such amendment or waiver,
an amendment or waiver becomes effective once the requisite number of consents
are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture that such amendment is
the legal, valid and binding obligation of the Company and the Guarantors
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
ARTICLE X
SUBORDINATION
-------------
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
------------------------
each Securityholder by accepting a Security agrees, that the Debt evidenced by
the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article X, to the prior payment in full in cash or Cash
Equivalents of all existing and future Senior Debt of the Company and that the
subordination is for the benefit of and enforceable by the holders of Senior
Debt of
81
the Company. The Securities shall rank pari passu in right of payment with all
---- -----
existing and future Pari Passu Debt of the Company and shall be senior in right
of payment to all existing and future Subordinated Debt of the Company. The
Securities shall also be effectively subordinated to any Secured Debt of the
Company to the extent of the value of the assets securing such Debt. However,
payment from the money or the proceeds of Government Securities held in any
defeasance trust described in Article VIII is not subordinated to any Senior
Debt or subject to the restrictions described in this Section 10.01, so long as
the payments into the defeasance trust were not prohibited pursuant to the
subordination provisions described at the time when so paid. For purposes of
these subordination provisions, the Debt evidenced by the Securities is deemed
to include the Liquidated Damages payable pursuant to the provisions set forth
in the Securities and the applicable Registration Rights Agreement. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
------------------------------------
payment or distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Debt of the Company shall be
entitled to receive payment in full, in cash or Cash Equivalents, of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not allowed or allowable in such proceeding) before the
Holders of Securities will be entitled to receive any payment with respect to
the Securities, and until all Obligations with respect to such Senior Debt are
paid in full, in cash or Cash Equivalents, any payment or distribution to which
the Holders of Securities would be entitled shall be made to the holders of such
Senior Debt (except that Holders of Securities may receive and retain (i)
Permitted Junior Securities and (ii) payments made from the trust described in
Article VIII so long as, on the date or dates the respective amounts were paid
into the trust, such payments were made with respect to the Securities without
violating this Article X). The term "payment" means, with respect to the
Securities, any payment, whether in cash or other assets or property, of
interest, principal (including redemption price and purchase price), premium,
Liquidated Damages or any other amount on, of or in respect of the Securities,
any other acquisition of Securities and any deposit into the trust described in
Article VIII. The verb "pay" has a correlative meaning.
SECTION 10.03. Default on Senior Debt. The Company shall not make
----------------------
any payment or distribution upon or in respect of the Securities (except from
the trust described in Article VIII) if (i) a default in the payment of any
Obligations with respect to Designated Senior Debt of the Company occurs and is
continuing (a "payment default") or any other default on Designated Senior Debt
of the Company occurs and the maturity of such Designated Senior Debt is
accelerated in accordance with its terms or (ii) a default, other than a payment
default, occurs and is continuing with respect to Designated Senior Debt of the
Company that permits holders of the Designated Senior Debt of the Company as to
which such default relates to accelerate its maturity (a "non-payment default")
and, in the case of this clause (ii) only, the
82
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
Company, a Representative for, or the holders of a majority of the outstanding
principal amount, of any such issue of Designated Senior Debt of the Company.
Payments on the Securities may and shall be resumed (a) in the case of a payment
default, upon the date on which such default is cured or waived and, in the case
of Designated Senior Debt of the Company that has been accelerated, such
acceleration has been rescinded, and (b) in case of a non-payment default, the
earlier of the date on which such non-payment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt of the Company has been
accelerated. No new period of payment blockage may be commenced on account of
any non-payment default unless and until 360 days have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice. No non-payment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee, shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or waived for
a period of not less than 90 days.
Notwithstanding any other provision in this Section 10.03, during any
365 day period, there must be at least 180 days where there is no Payment
Blockage Notice in effect.
SECTION 10.04. Acceleration of Payment of Securities. If payment of
-------------------------------------
the Securities is accelerated because of an Event of Default, the Company shall
promptly notify the Representative of the lenders under the New Credit Facility
of the acceleration. If any Debt under the New Credit Facility is outstanding,
the Company may not make any payment on account of such accelerated Securities
until five Business Days after such holders of such Debt receive notice of such
acceleration and, thereafter, may pay the Securities only if this Article X
otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
-----------------------------------
distribution is made to Securityholders that because of this Article X should
not have been made to them, the Securityholders who receive such distribution
shall hold it in trust for holders of Senior Debt of the Company and pay it over
to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is
-----------
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of the Company to receive
distributions applicable to Senior Debt of the Company. A distribution made
under this Article X to holders of Senior Debt of the Company which otherwise
would have been made to Securityholders is not, as between the Company and
Securityholders, a payment by the Company on Senior Debt of the Company.
SECTION 10.07. Relative Rights. This Article X defines the relative
---------------
rights of Securityholders and holders of Senior Debt of the Company. Nothing in
this Indenture shall:
83
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon an Event of Default, subject to the rights of
holders of Senior Debt of the Company to receive distributions otherwise
payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
--------------------------------------------
right of any holder of Senior Debt of the Company to enforce the subordination
of the Debt evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of the Company may give the notice;
provided, however, that, if an issue of Senior Debt of the Company has a
-------- -------
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt of the Company
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Debt of the Company or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Company with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of Senior Debt of the
Company; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not to Prevent Events of Default or Limit
---------------------------------------------------
Right to Accelerate. The failure to make a payment pursuant to the Securities
-------------------
by reason of any provision in this Article X shall not be construed as
preventing the occurrence of an Event of Default. Nothing in this Article X
shall have any effect on the right of the Securityholders or the Trustee to
accelerate the maturity of the Securities.
84
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
-----------------------------
anything contained herein to the contrary, payments from money or the proceeds
of Government Obligations held in trust under Article VIII by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article X, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Debt of the Company or any other creditor of the Company.
SECTION 10.13. Trustee Entitled to Rely. Upon any payment or
------------------------
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representative for the holders of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of
the Company and other Debt 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 X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Debt of the Company to participate in any
payment or distribution pursuant to this Article X, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt of the Company held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
other facts pertinent to the rights of such Person under this Article X, and, if
such evidence is 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. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.14. Trustee to Effectuate Subordination. Each
-----------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of the Company as provided in this Article X and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt.
------------------------------------------------
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article X. The Trustee shall not be deemed
to owe any fiduciary or other duty to the holders of Senior Debt of the Company
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt of the Company shall be entitled by
virtue of this Article X or otherwise.
85
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Each Securityholder by accepting a Security acknowledges and agrees
----------
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt of the Company,
whether such Senior Debt was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Debt and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt.
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in
-------------------------------------
this Article shall apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE XI
SECURITY GUARANTEES
-------------------
SECTION 11.01. Security Guarantees. Each Guarantor hereby jointly
-------------------
and severally unconditionally and irrevocably guarantees as a primary obligor
and not merely as a surety, to each Holder and to the Trustee and its successors
and assigns (a) the full and punctual payment of principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Securities when due, whether
at maturity, by acceleration, by redemption or otherwise, subject to any
applicable grace period, and all other monetary obligations of the Company under
this Indenture (including obligations to the Trustee) and the Securities and (b)
the full and punctual performance within applicable grace periods of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Securities (all of the foregoing being hereinafter
collectively called the "Guaranteed Obligations"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Guarantor, and that
each such Guarantor shall remain bound under this Article XI notwithstanding any
extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Securities or the Guaranteed Obligations. The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any Guaranteed
Obligations; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee
to exercise any right or remedy against any other
86
Guarantor of the Guaranteed Obligations; or (f) any change in the ownership of
such Guarantor, except as provided in Section 11.02(b).
Each Guarantor further agrees that its Security Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Guaranteed Obligations, or by any other act or thing or omission or delay to
do any other act or thing which may or might in any manner or to any extent vary
the risk of any Guarantor or would otherwise operate as a discharge of any
Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Security Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest, premium or Liquidated Damages, if any, on any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest, premium and Liquidated Damages, if any, on such Guaranteed Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Guaranteed Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
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Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article VI for the purposes of any Security Guarantee herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Guaranteed Obligations guaranteed hereby, and (y) in the event of
any declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) Incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. (a) Any term or provision
-----------------------
of this Indenture to the contrary notwithstanding, the maximum, aggregate amount
of the obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be guaranteed (after giving effect to all its Guarantees
of Debt under the New Credit Facility) without rendering this Indenture, as it
relates to any such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally, provided, however, that the Security Guarantee by
-------- -------
HRI shall be limited to an amount not to exceed, together with any Debt
outstanding under the New Credit Facility, 80% of the aggregate purchase price
paid by HRI (which purchase price was approximately $17 million) for the
Harborside Healthcare - Pawtuxet Village Nursing and Rehabilitation Center and
the Harborside Healthcare - Greenwood Nursing and Rehabilitation Center.
(b) This Guarantee as to any Guarantor shall terminate and be of no
further force or effect upon (i) the designation (in accordance with the
provisions of this Indenture) of such Guarantor as an Unrestricted Subsidiary or
(ii) the sale or other disposition of all of the assets of such Guarantor in
accordance with the terms of this Indenture, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor then held by the Company and its Restricted Subsidiaries; provided
--------
that the Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.06, to the extent such Section is applicable to such
disposition and is required thereby, or (iii) the sale or other disposition of
Capital Stock of any Guarantor if (A) as a result of such disposition, such
Person ceases to be a Subsidiary of the Company and (B) the Net Proceeds of such
sale are applied in accordance with Section 4.06, to the extent such Section is
applicable to such disposition. If the Security Guarantee of any Guarantor
terminates pursuant to the foregoing provisions, such Person shall cease to be a
Subsidiary, a Guarantor or otherwise a party to this Indenture and, upon request
by the Company, the Trustee shall execute appropriate instruments acknowledging
such termination and the release of such Person from its obligations hereunder.
SECTION 11.03. Successors and Assigns. This Article XI shall be
----------------------
binding upon each Guarantor and its successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon
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that party in this Indenture and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
---------
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
------------
any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
SUBORDINATION OF THE SECURITY GUARANTEES
----------------------------------------
SECTION 12.01. Agreement to Subordinate. Each Guarantor agrees, and
------------------------
each Securityholder by accepting a Security agrees, that such Guarantor's
obligations under its Security Guarantee are subordinated in right of payment,
to the extent and in the manner provided in this Article XII, to the prior
payment in full in cash or Cash Equivalents of all existing and future Senior
Debt of such Guarantor and that the subordination is for the benefit of and
enforceable by the holders of Senior Debt of such Guarantor. The obligations of
a Guarantor under this Article XII shall rank pari passu in right of payment
----------
with all existing and future Pari Passu Debt of such Guarantor, and shall be
senior in right of payment to all existing and future Subordinated Debt of such
Guarantor. Each Security Guarantee will also be effectively subordinated to any
Secured Debt of the applicable Guarantor to the extent of the value of the
assets securing such Debt.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
------------------------------------
payment or distribution to creditors of any Guarantor in a liquidation or
dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Guarantor or its property,
an assignment for the benefit of creditors or any marshaling of such Guarantor's
assets and liabilities, the holders of Senior Debt of such Guarantor shall be
entitled to receive payment in full, in cash or Cash Equivalents, of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not allowed or allowable in such
89
proceeding) before the Holders of Securities will be entitled to receive any
payment with respect to the Security Guarantee and until all Obligations with
respect to such Senior Debt are paid in full, in cash or Cash Equivalents, any
payment or distribution to which the Holders of Securities would be entitled
shall be made to the holders of such Senior Debt (except that Holders of
Securities may receive and retain (i) Permitted Junior Securities and (ii)
payments made from the trust described in Article VII so long as, on the date or
dates the respective amounts were paid into the trust, such payments were made
with respect to the Securities without violating this Article XII).
SECTION 12.03. Default on Senior Debt of a Guarantor. A Guarantor
-------------------------------------
shall not make any payment or distribution upon or in respect of its Security
Guarantee if (i) a default in the payment of any Obligations with respect to
Designated Senior Debt of such Guarantor occurs and is continuing (a "Guarantor
payment default") or any other default on Designated Senior Debt of such
Guarantor occurs and the maturity of such Designated Senior Debt of such
Guarantor is accelerated in accordance with its terms or (ii) a default, other
than a Guarantor payment default, occurs and is continuing with respect to
Designated Senior Debt of such Guarantor that permits holders of the Designated
Senior Debt of such Guarantor as to which such default relates to accelerate its
maturity (a "Guarantor non-payment default") and, in the case of this clause
(ii) only, the Trustee receives a notice of such default (a "Guarantor Payment
Blockage Notice") from the Company, a Representative for, or the holders of a
majority of the outstanding principal amount of, any issue of Designated Senior
Debt of such Guarantor. Payments on the Security Guarantee of such Guarantor
may and shall be resumed (a) in the case of a Guarantor payment default, upon
the date on which such default is cured or waived and, in the case of Designated
Senior Debt of such Guarantor that has been accelerated, such acceleration has
been rescinded, and (b) in case of a Guarantor non-payment default, the earlier
of the date on which such Guarantor non-payment default is cured or waived or
179 days after the date on which the applicable Guarantor Payment Blockage
Notice is received, unless the maturity of any Designated Senior Debt of such
Guarantor has been accelerated. No new period of payment blockage may be
commenced on account of any Guarantor non-payment default unless and until 360
days have elapsed since the initial effectiveness of the immediately prior
Guarantor Payment Blockage Notice. No Guarantor non-payment default that
existed or was continuing on the date of delivery of any Guarantor Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Guarantor Payment Blockage Notice unless such default shall have been cured or
waived for a period of not less than 90 days.
Notwithstanding any other provision in this Section 12.03, during any
365-day period, there must be at least 180 days in which there is no Guarantor
Payment Blockage Notice.
SECTION 12.04. Demand for Payment. If payment of the Securities is
------------------
accelerated because of an Event of Default and a demand for payment is made on a
Guarantor pursuant to Article XI, the Trustee shall promptly notify the Company,
and the Company shall promptly (and in no event more than five Business Days
after receipt of such notice) notify the
90
Representative of the lenders under the New Credit Facility of the acceleration.
If any Debt under the New Credit Facility is outstanding, such Guarantor may not
pay its Obligations under its Security Guarantee until five Business Days after
the holders of such Debt receive notice of such demand and, thereafter, may pay
its Obligations under its Security Guarantee only if this Article XII otherwise
permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a
-----------------------------------
distribution is made to Securityholders that because of this Article XII should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Debt of the relevant Guarantor and
pay it over to them as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Debt of a Guarantor is
-----------
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of such Guarantor to receive
distributions applicable to Senior Debt of such Guarantor. A distribution made
under this Article XII to holders of Senior Debt of such Guarantor which
otherwise would have been made to Securityholders is not, as between such
Guarantor and Securityholders, a payment by such Guarantor on Senior Debt of
such Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the
---------------
relative rights of Securityholders and holders of Senior Debt of a Guarantor.
Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Securityholders, the
obligation of a Guarantor, which is absolute and unconditional, to pay its
Obligations under its Security Guarantee to the extent set forth in Article
XI; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by a Guarantor under its Obligations
under its Security Guarantee, subject to the rights of holders of Senior
Debt of such Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No
------------------------------------------------
right of any holder of Senior Debt of a Guarantor to enforce the subordination
of the Obligations under the Security Guarantee of such Guarantor shall be
impaired by any act or failure to act by such Guarantor or by its failure to
comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of a Guarantor may give the notice;
provided, however, that, if an issue of Senior Debt of a Guarantor has a
-------- -------
Representative, only the
91
Representative may give the notice. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Debt of a Guarantor (or a Representative of such
holder) to establish that such notice has been given by a holder of such Senior
Debt or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of a Guarantor with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Debt of a Guarantor which may at any time
be held by it, to the same extent as any other holder of Senior Debt of such
Guarantor; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of a
Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article XII Not to Prevent Events of Default or Limit
-----------------------------------------------------
Right to Accelerate. The failure of a Guarantor to make a payment on any of its
-------------------
Obligations under its Security Guarantee by reason of any provision in this
Article XII shall not be construed as preventing the occurrence of a default by
such Guarantor under its Security Guarantee. Nothing in this Article XII shall
have any effect on the right of the Securityholders or the Trustee to make a
demand for payment on a Guarantor pursuant to Article XII.
SECTION 12.12. Trustee Entitled to Rely. Upon any payment or
------------------------
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of a Guarantor for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of a
Guarantor and other Debt of a Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person as
a holder of Senior Debt of a Guarantor to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt of such Guarantor held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article XII, and, if
such evidence is 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. The provisions
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of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of
actions by the Trustee pursuant to this Article XII.
SECTION 12.13. Trustee to Effectuate Subordination. Each
-----------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of each of the Guarantors as provided in this Article XII and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
-----------------------------------------------------
Guarantor. The Trustee shall not be deemed to owe any fiduciary or other duty
---------
to the holders of Senior Debt of a Guarantor and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Securityholders or the
relevant Guarantor or any other Person, money or assets to which any holders of
Senior Debt of such Guarantor shall be entitled by virtue of this Article XII or
otherwise.
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor on
----------------------------------------------------
Subordination Provisions. Each Securityholder by accepting a Security
------------------------
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of a Guarantor, whether such Senior Debt was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Debt.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of
----------------------------
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
93
if to the Company prior to the Recapitalization:
HH Acquisition Corp.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Investcorp International Inc.
000 Xxxx Xxxxxx, 00 Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
if to the Company after the Recapitalization:
Harborside Healthcare Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Investcorp International Inc.
000 Xxxx Xxxxxx, 00 Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
And with respect to notices pursuant to Article VI, with copies to:
Xxxxxx, Xxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
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if to the Trustee:
United States Trust Company of New York
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
telecopier no.: (000) 000-0000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be made
in compliance with Section 313(c) of the TIA and mailed to the Securityholder at
the Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
To the extent applicable, the Company shall comply with the provisions
of Section 314(c)(3) of the TIA.
95
SECTION 13.05. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining whether
---------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
--------------
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE, THE SECURITIES AND THE
-------------
SECURITY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
96
SECTION 13.10. No Recourse Against Others. A director, officer,
--------------------------
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION 13.11. Successors. All agreements of the Company and each
----------
Guarantor in this Indenture and the Securities shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
97
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
HH ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx X. X'Xxxxx
--------------------------------------
Name: Xxxxxxxxxxx X. X'Xxxxx
Title: President
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee,
By: _____________________________________
Name:
Title:
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
HH ACQUISITION CORP.
By: ____________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee,
By: /s/ Xxxxx X. Xxxxx
______________________________________
Name: Xxxxx X. Xxxxx
Title: Vice President
EXHIBIT A
---------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF NOTES AT
THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS
A-2
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
[For Global Securities only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.]
A-3
[FORM OF FACE OF SECURITY]
HH ACQUISITION CORP.
11% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2008
No. ___ CUSIP No. _________
$____________
The following information is supplied for purposes of Sections 1273 and 1275
of the Internal Revenue Code:
Issue Date: [__________],____]
Original issue discount under Section
Yield to maturity for period from 1273 of the Internal Revenue Code
Issue Date to [__________,_____]: (for each $1,000 principal amount):
[____]%, compounded semi-annually on $[_______]
[__________ and _______], commencing
[_________, ____] (computed without Issue Price (for each $1,000
giving effect to the additional principal amount): $[_____]
payments of interest in the event
the issuer fails to commence the
exchange offer or cause the
registration statement to be
declared effective, each as
described on the reverse hereof)
HH ACQUISITION CORP., a Delaware corporation (the "Company"), promises
to pay to _______________,or registered assigns, the principal sum of
_____________________ ($________________) on August 1, 2008.
Interest Payment Dates: February 1 and August 1, commencing February 1, 2003
Regular Record Dates: January 15 and July 15
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.
Dated:
HH ACQUISITION CORP.
By: _______________________________________
Name:
Title:
A-4
TRUSTEE'S CERTIFICATE OF AUHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: _______________________
Authorized Signatory
A-5
[FORM OF REVERSE SIDE OF SECURITY]
11% Senior Subordinated Discount Note due 2008
1. Interest
--------
HH ACQUISITION CORP., a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above and shall pay Liquidated Damages, if any, payable pursuant to the
relevant Registration Rights Agreement.
The Company will pay interest and Liquidated Damages, if any,
semiannually on August 1 and February 1 of each year commencing February 1,
2004; provided that no interest shall accrue on the principal amount of this
--------
Security prior to August 1, 2003 (the "Full Accretion Date"), and no interest
shall be paid on this Security prior to the Full Accretion Date except for
Liquidated Damages, if any, payable pursuant to the relevant Registration Rights
Agreement. The Holder of this Security is entitled to the benefit of such
Registration Rights Agreement.
Interest will be computed on the basis of a 360-day year of twelve 30-
day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Liquidated Damages, if any, in respect of the Securities to the Persons who are
registered holders of Securities at the close of business on the January 15 or
July 15 next preceding the interest payment date even if Securities are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, UNITED STATES TRUST COMPANY OF NEW YORK (the "Trustee")
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to the Holders. The
Company or any domestically organized Wholly Owned Restricted Subsidiary may act
as Paying Agent, Registrar or co-registrar.
A-6
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of July
31, 1998 (the "Indenture"), between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
------
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are unsecured senior subordinated obligations of the
Company. Subject to the conditions set forth in the Indenture, the Company may
issue Additional Securities.
5. Optional Redemption
-------------------
Except as set forth in the next two paragraphs, the Securities may not
be redeemed at the Company's option prior to August 1, 2003. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on August 1
of the years indicated below:
Redemption
Year Price
---- ----------
2003 105.500%
2004 103.667%
2005 101.883%
2006 and thereafter 100.000%
In addition, at any time and from time to time, prior to August 1,
2001, the Company may redeem up to 35% of the sum of (i) the aggregate principal
amount at maturity of Securities and (ii) the aggregate principal amount at
maturity of any Additional Securities at a redemption price of 111% of the
Accreted Value thereof (determined at the redemption date) plus Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds
received by the Company of a public offering of common stock of the Company,
provided that at least 65% of the sum of (i) the aggregate principal amount at
--------
maturity of Securities and (ii) the aggregate principal amount at maturity of
any Additional Securities remains outstanding immediately after the occurrence
of such redemption; and provided, further, that such redemption shall occur
-------- -------
within 60 days of the date of the closing of such public offering.
A-7
At any time on or prior to August 1, 2003, the Securities may be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days'
prior notice (but in no event may any such redemption occur more than 90 days
after the occurrence of such Change of Control) mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
Accreted Value thereof (determined at the redemption date) plus the Applicable
Premium and Liquidated Damages thereon, if any, to the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date).
6. Special Mandatory Redemption
----------------------------
In the event that the Merger is not consummated prior to the earlier
to occur of (i) January 10, 1999 and (ii) if it appears, in the sole judgment of
the Company, that the Merger shall not be consummated, the date on which notice
of same is delivered by the Company to the Escrow Agent and the Trustee, the
Company shall be required to redeem the Securities, in whole, on at least 15
days' prior written notice mailed by first class mail to each Holder's last
address as it appears in the Securities Register, at a redemption price equal to
101% of the Accreted Value plus Liquidated Damages, if any, of the Securities on
the date of repurchase to the redemption date.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days (or in the case of a Special Mandatory Redemption described in paragraph 6
hereof, 15 days) but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address all in accordance
with the Indenture. If less than all of the Securities are to be redeemed at
any time, selection of Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or, if the Securities are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Securities in an aggregate principal
--------
amount at maturity of $1,000 or less shall be redeemed in part.
If money sufficient to pay the redemption price of and accrued
interest (if any) on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Repurchase at the Option of the Holder
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions set forth in the Indenture, to cause the
Company to repurchase all or any part of
A-8
the Securities of such Holder at a purchase price equal to 101% of the aggregate
principal amount of the Securities to be repurchased plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of repurchase) as provided in, and subject to the terms of, the
Indenture.
9. Subordination
-------------
The Securities are subordinated to Senior Debt of the Company, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Company must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any registration of transfer
or exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
A-9
13. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any past default or noncompliance with any provision of the Indenture
may be waived with the consent of the Holders of a majority in principal amount
then outstanding of the Securities. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated Securities
are issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code), to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Securities in the case of a merger,
consolidation or sale of assets, to release any Security Guarantee or collateral
in accordance with the provisions of the Indenture or Pledge Agreement, as the
case may be, to provide for additional Guarantors, to make any change that would
provide any additional rights or benefits to the Holders of Securities or that,
as determined by the Board of Directors in good faith, does not have a material
adverse effect on the legal rights under this Indenture of any such Holder, to
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to provide for the issuance of
Additional Securities in compliance with Article II and Section 4.03 of the
Indenture.
15. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if: (i) the Company
defaults in any payment of interest on, or Liquidated Damages with respect to,
any Security when the same becomes due and payable, whether or not such payment
shall be prohibited by Article X of the Indenture, and such default continues
for a period of 30 days; (ii) the Company defaults in the payment of the
principal of or premium, if any, on the Securities, whether or not such payment
shall be prohibited by Article X of the Indenture; (iii) the Company fails to
comply with other covenants and agreements in the Indenture, subject to
applicable grace periods as set forth in the Indenture; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Debt of the Company or any Restricted Subsidiary that is a
Significant Subsidiary occur if the amount
A-10
accelerated (or so unpaid) exceeds $15,000,000; (v) certain events of
bankruptcy, insolvency or reorganization with respect to the Company and any
Restricted Subsidiary which is a Significant Subsidiary; (vi) certain judgments
or decrees for the payment of money in excess of $15,000,000 against the Company
or any Restricted Subsidiary that is a Significant Subsidiary; and (vii) except
as is permitted by the Indenture, a Security Guarantee by a Guarantor that is a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, denies
or disaffirms its obligations under the Indenture or its Security Guarantee. If
an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal, premium, if any, or interest) if and
so long as a committee of its trust officers in good faith determines that
withholding notice is in the interest of the Holders.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Personal Liability of Directors, Officers, Employees and Stockholders
------------------------------------------------------------------------
No director, officer, employee, incorporator, stockholder or Affiliate
of the Company, as such, will have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. No director,
officer, employee, incorporator, stockholder or Affiliate of any of the
Guarantors, as such, will have any liability for any obligations of the
Guarantors under the Security Guarantees, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Securities and Security Guarantees by accepting a Security and a
Security Guarantee waives and releases all such liabilities. The waiver and
release are part of the consideration for issuance of the Securities and the
Security Guarantees. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
A-11
18. Governing Law
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
----------------------------------------------------------------------
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
--------------------------------------------------------------------------------
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
-----------------------------------------------------------------------------
JURISDICTION WOULD BE REQUIRED THEREBY.
---------------------------------------
19. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
A-12
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
X/X XXXXXX, XXXX & XXXXXXXX XXX
XX XXXXXXXXXXX CORP.
000 XXXX XXXXXX, 00/XX/ XXXXX
XXX XXXX, XXX XXXX 00000
ATTENTION: XXXXX X. XXXXXX, ESQ.
A-13
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing _____________________________________________ attorney to
transfer said Security on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON
ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
UNLEGENDED OFFSHORE GLOBAL SECURITIES AND
UNLEGENDED OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date the Shelf Registration Statement
is declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
---------
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933 provided by Rule
144A thereunder.
or
--
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
A-14
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:__________ ________________________________________________________
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the within-
mentioned instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_____________ ________________________________________________________
NOTICE: To be executed by an executive officer
A-15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[_] 4.06 Asset Sale [_] 4.08 Change of Control
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$__________.
Date: __________________ Your Signature: _________________________________
(Sign exactly as your name appears on the
other side of the Security)
__________________
Tax I.D. number
Signature Guarantee: ______________________________________________
(Signature must be guaranteed by a participant
in a recognized signature guarantee medallion
program)
EXHIBIT B
---------
FORM OF CERTIFICATE
-------------------
_______, ____
UNITED STATES TRUST COMPANY OF NEW YORK
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HH Acquisition Corp.(the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
This letter relates to U.S. $_______________ principal amount at
maturity of Securities represented by a Security (the "Legended Security") which
bears a legend outlining restrictions upon transfer of such Legended Security.
Pursuant to Section 2.02 of the Indenture dated as of July 31, 1998 (the
"Indenture") relating to the Securities, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the United States to
whom the Securities could be transferred in accordance with Rule 904 of
Regulation S promulgated under the U.S. Securities Act of 1933. Accordingly, you
are hereby requested to exchange the legended certificate for an unlegended
certificate representing an identical principal amount at maturity of
Securities, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: ____________________________________
Authorized Signature
EXHIBIT C
---------
[FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS]
____________, ____
UNITED STATES TRUST COMPANY OF NEW YORK
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HH Acquisition Corp. (the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $__________________
aggregate principal amount at maturity of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture dated
as of July 31, 1998 (the "Indenture") relating to the Securities and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with such restrictions and
conditions and the Securities Act of 1933, amended (the "Securities Act").
2. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities within the time period referred to
in Rule 144(k) of the Securities Act, we will do so only (A) to the Company or
any subsidiary thereof, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
and, if such transfer is in respect of an aggregate accreted value of Securities
at the time of transfer of less than $250,000, an opinion of counsel acceptable
to the Company that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available) or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Securities from us a notice advising such
purchaser that resales of the Securities are restricted as stated herein.
C-2
3. We understand that, on any proposed resale of any Securities, we
will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Securities purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:______________________________________________
Authorized Signature
EXHIBIT D
---------
[FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S]
_______ __, 00__
XXXXXX XXXXXX XXXXX XXXXXXX XX XXX XXXX
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HH Acquisition Corp. (the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$__________________
aggregate principal amount at maturity of the Securities, we confirm that such
sale has been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933 and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal
D-2
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:______________________________
Authorized Signature
EXHIBIT E
FORM OF FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture")
----------------------
dated as of __________, 199_, among HARBORSIDE HEALTHCARE CORPORATION, a
Delaware corporation ("Harborside"), the subsidiaries of Harborside listed on
----------
the signature pages hereto, as guarantors (collectively, the "Initial
-------
Guarantors"), and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee under the
----------
indenture referred to below (the "Trustee").
-------
R E C I T A L S
WHEREAS, HH Acquisition Corp., a Delaware corporation ("MergerCo"),
--------
has heretofore executed and delivered to the Trustee an Indenture dated as of
July 31, 1998 (the "Indenture"), providing for the initial issuance of
---------
$170,000,000 million in aggregate principal amount at maturity of its 11%
Senior Subordinated Discount Notes due 2008 (the "Securities");
----------
WHEREAS, MergerCo has merged with and into Harborside and, in
connection therewith, Harborside has assumed by operation of law all of
MergerCo's debts, liabilities, duties and obligations, including MergerCo's
obligations in respect of the Securities and under the Indenture;
WHEREAS, each of the Initial Guarantors is required pursuant to the
Indenture to become a party thereto and as Guarantors under the Indenture to
guarantee the obligations of MergerCo in respect of the Securities and under the
Indenture;
WHEREAS, Harborside desires by this Supplemental Indenture, pursuant
to and as contemplated by Sections 5.01 and 9.01 of the Indenture, to expressly,
irrevocably and unconditionally assume the covenants, agreements, obligations
and undertakings of MergerCo in the Indenture and under the Securities; and
WHEREAS, all conditions and requirements necessary to make each of
this Supplemental Indenture and the Securities valid, binding and legal
instruments in accordance with their respective terms upon Harborside, and each
of this Supplemental Indenture and each of the Security Guarantees valid,
binding and legal instruments in accordance with their terms upon each of the
Initial Guarantors, have been performed and fulfilled by the applicable parties
hereto and the execution and delivery thereof have been in all respects duly
authorized by the applicable parties hereto.
2
WHEREAS, MergerCo and Harborside authorize the Trustee to cancel the
11% Senior Subordinated Discount Notes due 2008 of MergerCo and to authenticate
the 11% Senior Subordinated Discount Notes due 2008 of Harborside, as guaranteed
by the Initial Guarantors.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, each
party agrees, for the benefit of the others and for the equal and ratable
benefit of the holders of the Notes as follows:
ARTICLE ONE
DEFINITIONS
-----------
SECTION 1.01. Definitions. For all purposes of this Supplemental
-----------
Indenture, except as otherwise herein expressly provided or unless the context
otherwise requires: (i) the terms and expressions used herein shall have the
same meanings as corresponding terms and expressions used in the Indenture; and
(ii) the words "herein," "hereof" and "hereby" and other words of similar import
used in this Supplemental Indenture refer to this Supplemental Indenture as a
whole and not to any particular section hereof.
ARTICLE TWO
ASSUMPTION OF OBLIGATIONS AND AGREEMENT TO GUARANTEE
----------------------------------------------------
SECTION 2.01. Assumption of Obligations of MergerCo. (a) Harborside
-------------------------------------
hereby expressly, irrevocably and unconditionally assumes each and every
covenant, agreement, obligation and undertaking of MergerCo in the Indenture as
if Harborside had been named the Company in the Indenture and the original
issuer of the Securities, and also hereby expressly, irrevocably and
unconditionally assumes each and every covenant, agreement, obligation and
undertaking of MergerCo in each Security outstanding on the date of this
Supplemental Indenture.
(b) Promptly following the execution and delivery of this Supplemental
Indenture, the Trustee shall, upon the written order of Harborside in the form
of an Officers' Certificate of Harborside, authenticate and deliver Initial
Securities substantially in the form of Exhibit A hereto in exchange for the
outstanding Initial Securities.
SECTION 2.02. Security Guarantee of the Initial Guarantors. Each of
--------------------------------------------
the Initial Guarantors hereby expressly, irrevocably and unconditionally agrees,
(i) that its shall be a "Guarantor" under the Indenture and shall, jointly and
severally with all other Guarantors, guarantee Harborside's obligations under
the Securities and the Indenture on the terms and subject to the conditions set
forth in Articles XI and XII of the Indenture and (ii) to be bound by all other
applicable provisions of the Indenture and the Securities.
3
SECTION 2.03. Replacement of Exhibits to Indenture. Exhibits A, B, C
------------------------------------
and D to the Indenture are hereby deleted and replaced in their entirety by
Exhibits A, B, C and D, respectively, hereto.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
------------------------
SECTION 3.01. Effect of Supplemental Indenture. Upon the execution
---------------------------------
and delivery of this Supplemental Indenture by Harborside, each of the Initial
Guarantors and the Trustee, the Indenture shall be supplemented in accordance
herewith, and this Supplemental Indenture shall form a part of the Indenture for
all purposes, and every Holder of a Security heretofore or hereafter
authenticated and delivered under the Indenture shall be bound thereby.
SECTION 3.02. Indenture Remains in Full Force and Effect. Except as
------------------------------------------
expressly amended and supplemented hereby, the Indenture is in all respects
ratified and confirmed and all terms, conditions and provisions of the Indenture
shall remain in full force and effect.
SECTION 3.03. Indenture and Supplemental Indenture Construed
-----------------------------------------------
Together. This Supplemental Indenture is an indenture supplemental to and in
implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.
SECTION 3.04. Conflict with Trust Indenture Act. If any provision of
---------------------------------
this Supplemental Indenture limits, qualifies or conflicts with any provision of
the Trust Indenture Act that is required under such Act to be part of and govern
any provision of this Supplemental Indenture, the provision of such Act shall
control. If any provision of this Supplemental Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the provision of such Act shall be deemed to apply to the Indenture as so
modified or to be excluded by this Supplemental Indenture, as the case may be.
SECTION 3.05. Separability Clause. In case any provision in this
-------------------
Supplemental Indenture 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 3.06. Effect of Headings. The Article and Section headings
------------------
herein are for convenience only and shall not affect the construction hereof.
SECTION 3.07. Benefits of Supplemental Indenture, Etc. Nothing in
---------------------------------------
this Supplemental Indenture, the Indenture or the Securities express or implied,
shall give to any Person, other than the parties hereto and thereto and their
successors hereunder and thereunder
4
and the Holders, any benefit of any legal or equitable right, remedy or claim
under the Indenture, this Supplemental Indenture or the Securities.
SECTION 3.08. Successors and Assigns. All covenants and agreements
----------------------
in this Supplemental Indenture by Harborside and by each Initial Guarantor shall
bind their respective successors and assigns, whether so expressed or not.
SECTION 3.09. Certain Duties and Responsibilities of Trustee. In
----------------------------------------------
entering into this Supplemental Indenture, the Trustee shall be entitled to the
benefit of every provision of the Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee, whether or not
elsewhere herein so provided. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Company.
SECTION 3.10. Governing Law. This Supplemental Indenture shall be
-------------
governed by and construed in accordance with the laws of the State of New York.
SECTION 3.11. Counterparts. This Supplemental Indenture may be
------------
executed in counterparts, each of which, when so executed, shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
5
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed as of the date first written above.
HARBORSIDE HEALTHCARE CORPORATION
By: ___________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By: ___________________________
Name:
Title:
HARBORSIDE HEALTHCARE LIMITED
PARTNERSHIP
By: KHI CORPORATION, its general partner
By: ___________________________
Name:
Title:
BELMONT NURSING CENTER CORP.
By: ___________________________
Name:
Title:
6
ORCHARD RIDGE NURSING CENTER
CORP.
By: ___________________________
Name:
Title:
OAKHURST MANOR NURSING CENTER CORP.
By: ___________________________
Name:
Title:
RIVERSIDE RETIREMENT LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE TOLEDO LIMITED PARTNERSHIP
By: HARBORSIDE TOLEDO CORP.,
its general partner
By: ___________________________
Name:
Title:
7
HARBORSIDE CONNECTICUT LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF FLORIDA LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF OHIO LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
8
HARBORSIDE HEALTHCARE BALTIMORE LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF CLEVELAND LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF DAYTON LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
9
HARBORSIDE MASSACHUSETTS LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE RHODE ISLAND LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE NORTH TOLEDO LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
10
HARBORSIDE HEALTHCARE ADVISORS
LIMITED PARTNERSHIP
By: KHI CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE TOLEDO LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
KHI CORPORATION
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP IV
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
11
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP V
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP VI
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP VII
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
12
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP VIII
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP IX
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED PARTNERSHIP X
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
SAILORS, INC.
By: ___________________________
Name:
Title:
13
NEW JERSEY HARBORSIDE CORP.
By: ___________________________
Name:
Title:
BRIDGEWATER ASSISTED LIVING LIMITED PARTNERSHIP
By: NEW JERSEY HARBORSIDE
CORPORATION, its general partner
By: ___________________________
Name:
Title:
MARYLAND HARBORSIDE CORP.
By: ___________________________
Name:
Title:
HARBORSIDE HOMECARE LIMITED PARTNERSHIP
By: KHI CORPORATION, its general partner
By: ___________________________
Name:
Title:
14
HARBORSIDE REHABILITATION LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTHCARE
NETWORK LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION,
its general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTH I CORPORATION
By: ___________________________
Name:
Title:
EXHIBIT A
---------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF NOTES AT
THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
A-2
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
[For Global Securities only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.]
A-3
[FORM OF FACE OF SECURITY]
HARBORSIDE HEALTHCARE CORPORATION
11% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2008
No. ___ CUSIP No. _________
$____________
The following information is supplied for purposes of Sections 1273 and
1275 of the Internal Revenue Code:
Issue Date: [__________],____]
Original issue discount under Section
Yield to maturity for period from 1273 of the Internal Revenue Code
Issue Date to [__________,_____]: (for each $1,000 principal amount):
[____]%, compounded semi-annually on $[_______]
[__________ and _______], commencing
[_________, ____] (computed without Issue Price (for each $1,000
giving effect to the additional principal amount): $[_____]
payments of interest in the event
the issuer fails to commence the
exchange offer or cause the
registration statement to be
declared effective, each as
described on the reverse hereof)
HARBORSIDE HEALTHCARE CORPORATION a Delaware corporation (the
"Company"), promises to pay to _______________,or registered assigns, the
principal sum of _____________________ ($________________) on August 1, 2008.
Interest Payment Dates: February 1 and August 1, commencing February 1,
2003
Regular Record Dates: January 15 and July 15
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.
Dated:
HARBORSIDE HEALTHCARE CORPORATION
By: _______________________________________
Name:
Title:
A-4
TRUSTEE'S CERTIFICATE OF AUHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: ____________________________
Authorized Signatory
A-5
[FORM OF REVERSE SIDE OF SECURITY]
11% Senior Subordinated Discount Note due 2008
1. Interest
--------
HARBORSIDE HEALTHCARE CORPORATION a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above and shall pay Liquidated Damages, if any, payable
pursuant to the relevant Registration Rights Agreement.
The Company will pay interest and Liquidated Damages, if any,
semiannually on August 1 and February 1 of each year commencing February 1,
2004; provided that no interest shall accrue on the principal amount of this
--------
Security prior to August 1, 2003 (the "Full Accretion Date"), and no interest
shall be paid on this Security prior to the Full Accretion Date except for
Liquidated Damages, if any, payable pursuant to the relevant Registration Rights
Agreement. The Holder of this Security is entitled to the benefit of such
Registration Rights Agreement.
Interest will be computed on the basis of a 360-day year of twelve 30-
day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Liquidated Damages, if any, in respect of the Securities to the Persons who are
registered holders of Securities at the close of business on the January 15 or
July 15 next preceding the interest payment date even if Securities are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, UNITED STATES TRUST COMPANY OF NEW YORK (the "Trustee")
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to the Holders. The
Company or any domestically organized Wholly Owned Restricted Subsidiary may act
as Paying Agent, Registrar or co-registrar.
A-6
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of July
31, 1998 (the "Indenture"), between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
------
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are unsecured senior subordinated obligations of the
Company. Subject to the conditions set forth in the Indenture, the Company may
issue Additional Securities.
5. Optional Redemption
-------------------
Except as set forth in the next two paragraphs, the Securities may not
be redeemed at the Company's option prior to August 1, 2003. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on August 1
of the years indicated below:
Redemption
Year Price
---- ----------
2003 105.500%
2004 103.667%
2005 101.883%
2006 and thereafter 100.000%
In addition, at any time and from time to time, prior to August 1,
2001, the Company may redeem up to 35% of the sum of (i) the aggregate principal
amount at maturity of Securities and (ii) the aggregate principal amount at
maturity of any Additional Securities at a redemption price of 111% of the
Accreted Value thereof (determined at the redemption date) plus Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds
received by the Company of a public offering of common stock of the Company,
provided that at least 65% of the sum of (i) the aggregate principal amount at
--------
maturity of Securities and (ii) the aggregate principal amount at maturity of
any Additional Securities remains outstanding immediately after the occurrence
of such redemption; and provided, further, that such redemption shall occur
-------- -------
within 60 days of the date of the closing of such public offering.
A-7
At any time on or prior to August 1, 2003, the Securities may be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days'
prior notice (but in no event may any such redemption occur more than 90 days
after the occurrence of such Change of Control) mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
Accreted Value thereof (determined at the redemption date) plus the Applicable
Premium and Liquidated Damages thereon, if any, to the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date).
6. Special Mandatory Redemption
----------------------------
In the event that the Merger is not consummated prior to the earlier
to occur of (i) January 10, 1999 and (ii) if it appears, in the sole judgment of
the Company, that the Merger shall not be consummated, the date on which notice
of same is delivered by the Company to the Escrow Agent and the Trustee, the
Company shall be required to redeem the Securities, in whole, on at least 15
days' prior written notice mailed by first class mail to each Holder's last
address as it appears in the Securities Register, at a redemption price equal to
101% of the Accreted Value plus Liquidated Damages, if any, of the Securities on
the date of repurchase to the redemption date.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days (or in the case of a Special Mandatory Redemption described in paragraph 6
hereof, 15 days) but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address all in accordance
with the Indenture. If less than all of the Securities are to be redeemed at
any time, selection of Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or, if the Securities are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Securities in an aggregate principal
--------
amount at maturity of $1,000 or less shall be redeemed in part.
If money sufficient to pay the redemption price of and accrued
interest (if any) on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Repurchase at the Option of the Holder
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions set forth in the Indenture, to cause the
Company to repurchase all or any part of
A-8
the Securities of such Holder at a purchase price equal to 101% of the aggregate
principal amount of the Securities to be repurchased plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of repurchase) as provided in, and subject to the terms of, the
Indenture.
9. Subordination
-------------
The Securities are subordinated to Senior Debt of the Company, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Company must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any registration of transfer
or exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
A-9
13. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any past default or noncompliance with any provision of the Indenture
may be waived with the consent of the Holders of a majority in principal amount
then outstanding of the Securities. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated Securities
are issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code), to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Securities in the case of a merger,
consolidation or sale of assets, to release any Security Guarantee or collateral
in accordance with the provisions of the Indenture or Pledge Agreement, as the
case may be, to provide for additional Guarantors, to make any change that would
provide any additional rights or benefits to the Holders of Securities or that,
as determined by the Board of Directors in good faith, does not have a material
adverse effect on the legal rights under this Indenture of any such Holder, to
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to provide for the issuance of
Additional Securities in compliance with Article II and Section 4.03 of the
Indenture.
15. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if: (i) the Company
defaults in any payment of interest on, or Liquidated Damages with respect to,
any Security when the same becomes due and payable, whether or not such payment
shall be prohibited by Article X of the Indenture, and such default continues
for a period of 30 days; (ii) the Company defaults in the payment of the
principal of or premium, if any, on the Securities, whether or not such payment
shall be prohibited by Article X of the Indenture; (iii) the Company fails to
comply with other covenants and agreements in the Indenture, subject to
applicable grace periods as set forth in the Indenture; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Debt of the Company or any Restricted Subsidiary that is a
Significant Subsidiary occur if the amount
A-10
accelerated (or so unpaid) exceeds $15,000,000; (v) certain events of
bankruptcy, insolvency or reorganization with respect to the Company and any
Restricted Subsidiary which is a Significant Subsidiary; (vi) certain judgments
or decrees for the payment of money in excess of $15,000,000 against the Company
or any Restricted Subsidiary that is a Significant Subsidiary; and (vii) except
as is permitted by the Indenture, a Security Guarantee by a Guarantor that is a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, denies
or disaffirms its obligations under the Indenture or its Security Guarantee. If
an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal, premium, if any, or interest) if and
so long as a committee of its trust officers in good faith determines that
withholding notice is in the interest of the Holders.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Personal Liability of Directors, Officers, Employees and Stockholders
------------------------------------------------------------------------
No director, officer, employee, incorporator, stockholder or Affiliate
of the Company, as such, will have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. No director,
officer, employee, incorporator, stockholder or Affiliate of any of the
Guarantors, as such, will have any liability for any obligations of the
Guarantors under the Security Guarantees, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Securities and Security Guarantees by accepting a Security and a
Security Guarantee waives and releases all such liabilities. The waiver and
release are part of the consideration for issuance of the Securities and the
Security Guarantees. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
A-11
18. Governing Law
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
----------------------------------------------------------------------
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
--------------------------------------------------------------------------------
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
-----------------------------------------------------------------------------
JURISDICTION WOULD BE REQUIRED THEREBY.
---------------------------------------
19. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. Guarantee
---------
The Company's obligations under the Securities are guaranteed on a
senior subordinated basis, jointly and severally, by the Guarantors.
A-12
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
HARBORSIDE HEALTHCARE CORPORATION
000 XXXXXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
ATTENTION: CHIEF FINANCIAL OFFICER
A-13
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ____________________________________________ attorney to transfer
said Security on the books of the Company with full power of substitution in the
premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON
ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
UNLEGENDED OFFSHORE GLOBAL SECURITIES AND
UNLEGENDED OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date the Shelf Registration Statement
is declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
---------
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933 provided by Rule
144A thereunder.
or
--
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
A-14
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:_____________ __________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________ __________________________________________________
NOTICE: To be executed by an executive officer
A-15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[_] 4.06 Asset Sale [_] 4.08 Change of Control
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$__________.
Date: __________________ Your Signature: _________________________________
(Sign exactly as your name appears on
the other side of the Security)
__________________
Tax I.D. number
Signature Guarantee: ______________________________________________
(Signature must be guaranteed by a participant
in a recognized signature guarantee medallion
program)
EXHIBIT B
---------
FORM OF CERTIFICATE
-------------------
______, ____
UNITED STATES TRUST COMPANY OF NEW YORK
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HARBORSIDE HEALTHCARE CORPORATION (the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
This letter relates to U.S. $_______________ principal amount at maturity
of Securities represented by a Security (the "Legended Security") which bears a
legend outlining restrictions upon transfer of such Legended Security. Pursuant
to Section 2.02 of the Indenture dated as of July 31, 1998 (the "Indenture")
relating to the Securities, we hereby certify that we are (or we will hold such
securities on behalf of) a person outside the United States to whom the
Securities could be transferred in accordance with Rule 904 of Regulation S
promulgated under the U.S. Securities Act of 1933. Accordingly, you are hereby
requested to exchange the legended certificate for an unlegended certificate
representing an identical principal amount at maturity of Securities, all in the
manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: _______________________________
Authorized Signature
EXHIBIT C
---------
[FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS]
____________, ____
UNITED STATES TRUST COMPANY OF NEW YORK
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HARBORSIDE HEALTHCARE CORPORATION (the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $__________________ aggregate
principal amount at maturity of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is subject
to certain restrictions and conditions set forth in the Indenture dated as of
July 31, 1998 (the "Indenture") relating to the Securities and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Securities except in compliance with such restrictions and conditions and the
Securities Act of 1933, amended (the "Securities Act").
2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities within the time period referred to
in Rule 144(k) of the Securities Act, we will do so only (A) to the Company or
any subsidiary thereof, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
and, if such transfer is in respect of an aggregate accreted value of Securities
at the time of transfer of less than $250,000, an opinion of counsel acceptable
to the Company that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available) or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Securities from us a notice advising such
purchaser that resales of the Securities are restricted as stated herein.
C-2
3. We understand that, on any proposed resale of any Securities, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Securities purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Securities purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_______________________________________________________
Authorized Signature
EXHIBIT D
---------
[FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S]
_______ __, 00__
XXXXXX XXXXXX XXXXX XXXXXXX XX XXX XXXX
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: HARBORSIDE HEALTHCARE CORPORATION (the "Company")
11% Senior Subordinated Securities due 2008 (the "Securities")
--------------------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$__________________ aggregate
principal amount at maturity of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933 and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal
D-2
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:______________________________________
Authorized Signature
