EXHIBIT 4.3
INDENTURE (this "INDENTURE") dated as of September 20, 2000, by
and between VETERINARY CENTERS OF AMERICA, INC., a Delaware
corporation ("HOLDINGS"), and Chase Manhattan Bank and Trust
Company, National Association, a national banking association
organized under the federal laws of the United States, 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 (a) Holdings Senior
Notes due 2010 issued on the date hereof (such notes, the "INITIAL NOTES"), (b)
if and when issued as provided in the Exchange and Registration Rights Agreement
(as defined in APPENDIX A hereto (the "Appendix")) or in this Indenture,
Holdings' Senior Notes due 2010 issued in the Registered Exchange Offer in
exchange for any Initial Notes or otherwise as provided in this Indenture (the
"EXCHANGE NOTES") and (c) if and when issued in payment of interest otherwise
payable in cash, additional Holdings Senior Notes due 2010 (the "PIK NOTES") on
any Initial Notes, Exchange Notes or PIK Notes previously issued (the PIK Notes,
together with the Initial Notes and any Exchange Notes issued hereunder, the
"NOTES," such term to include any such notes issued in exchange or replacement
therefor). Except as otherwise provided herein, the Notes shall be limited to
$100,000,000, plus the amount of any PIK Notes, in aggregate principal amount
outstanding at any time.
ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following terms shall
have the meanings specified herein unless the context otherwise requires:
"ACCREDITED INVESTOR" means any Person that is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act.
"ACQUIRED INDEBTEDNESS" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness Incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person at the time such asset
is acquired by such specified Person.
"ADJUSTED EBITDA" means for the applicable period of measurement
of Holdings and its Subsidiaries, (i) Consolidated EBITDA for such period MINUS
(ii) Capital Expenditures of Holdings and its Subsidiaries for such period, on a
consolidated basis, exclusive of Capital Expenditures constituting Permitted
Acquisitions or funded with Net Proceeds from Asset Dispositions which are
reinvested in accordance with SECTION 5.05.
"AFFILIATE" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such
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specified Person. For purposes of this definition, "CONTROL" (including, with
correlative meanings, the terms "CONTROLLING," "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as used with respect to any specified Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that in the case of Holdings, the Company or any of their respective
Subsidiaries beneficial ownership of 10% or more of the Equity Interests in
Holdings, the Company or such Subsidiary, as the case may be, shall be deemed to
be control. Notwithstanding the foregoing, in no event will the Purchasers or
any Holder or any lender under the Credit Agreement or any holder of Company
Notes or any of their respective Affiliates be deemed to be an Affiliate of
Holdings or the Company solely by virtue of purchasing or holding any Notes or
being such a lender or holding any Company Notes.
"AFFILIATE TRANSACTION" is defined in SECTION 5.06.
"APPENDIX" is defined in the recitals.
"APPLICABLE LAW" means all laws, statutes, treaties, rules, codes
(including building codes), ordinances, regulations, certificates, orders and
licenses of, and legally binding interpretations by, any Governmental Authority
and judgments, decrees, injunctions, writs, permits, orders or like governmental
action of any Governmental Authority (including environmental laws and those
pertaining to health or safety) applicable to the Holdings or any of its
Subsidiaries or any of their properties, assets or operations.
"ASSET DISPOSITION" means the disposition whether by sale,
issuance, lease (as lessor (other than under operating leases)), transfer, loss,
damage, destruction, condemnation or other transaction (including any merger or
consolidation) or series of related transactions of any of the following: (a)
any of the Capital Stock of any of Holdings' Subsidiaries or (b) any or all of
the assets of Holdings or any of its Subsidiaries, in each case other than sales
of inventory in the Ordinary Course of Business. Notwithstanding the foregoing,
Asset Dispositions shall not be deemed to include (i) a transfer of assets by
Holdings to the Company or by the Company to a Restricted Subsidiary of the
Company that (other than Permitted Partially Owned Subsidiaries) is a Company
Guarantor, or by a Restricted Subsidiary of the Company that (except for
Permitted Partially Owned Subsidiaries) is a Company Guarantor to the Company or
to another Restricted Subsidiary of the Company that (except for Permitted
Partially Owned Subsidiaries) is a Company Guarantor, (ii) an issuance of Equity
Interests by the Company to Holdings or by a Subsidiary of the Company to the
Company or to a Restricted Subsidiary of the Company that (except for Permitted
Partially Owned Subsidiaries) is a Company Guarantor, or by a Restricted
Subsidiary of the Company to another Person to the extent permitted by SECTION
5.08(B), (iii) a Restricted Payment that is permitted by the provisions of
SECTION 5.02, (iv) a Permitted Investment, (v) any conversion of Cash
Equivalents into cash or any other form of Cash Equivalents, (vi) any
foreclosure on assets, (vii) sales or disposition of past due accounts
receivable in the Ordinary Course of Business, (viii) transactions permitted
under ARTICLE 6 hereof, (ix) grants of credits and allowances in the Ordinary
Course of Business, (x) the sublease of real or personal property on
commercially reasonable terms, (xi) trade-ins or exchanges of
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equipment or other fixed assets, (xii) the sale and leaseback of any assets
within 180 days of the acquisition thereof, (xiii) sales of damaged, worn-out or
obsolete equipment or assets that, in Holdings' reasonable judgment, are no
longer either used or useful in the business of Holdings or its Subsidiaries, or
(xiv) sales of other assets for aggregate consideration of less than $1 million
with respect to any transaction or series of related transactions, provided the
total consideration received for all assets sales under this clause (xiv) does
not exceed for any fiscal year 5% of Consolidated Tangible Assets at the
beginning of such fiscal year.
"ASSET SALE OFFER" is defined in SECTION 4.10(A).
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"BANKRUPTCY LAW" means Title 11 of the United States Code or any
similar federal or state bankruptcy, insolvency, reorganization or other law for
the relief of debtors.
"BOARD" AND "BOARD OF DIRECTORS" means, as to any Person, the
board of directors, the board of advisors (or similar governing body) of such
Person.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL EXPENDITURES" means, for any period and with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets or
additions to fixed or capital assets (including replacements, capitalized
repairs and improvements during such period) which should be capitalized under
GAAP on a consolidated balance sheet of such Person and its Subsidiaries.
"CAPITALIZED 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" of any Person means any and all shares,
interests, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one (1) year from the date of
acquisition and, at the time of acquisition, having a rating of at least A-1
from Standard & Poor's Corporation or at least P-1 from Xxxxx'x Investors
Service, Inc.; (iii)
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certificates of deposit or bankers' acceptances maturing within one (1) year
from the date of acquisition thereof issued by, or overnight reverse repurchase
agreements from, any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $250,000,000; (iv) time deposits
maturing no more than thirty (30) days from the date of creation thereof with
commercial banks having membership in the Federal Deposit Insurance Corporation
and having combined capital and surplus of not less than $250,000,000; (v)
deposits or investments in mutual or similar funds offered or sponsored by
brokerage or other companies having membership in the Securities Investor
Protection Corporation and having combined capital and surplus of not less than
$250,000,000; and (vi) other money market accounts or mutual funds which invest
primarily in the securities described above.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or more related transactions, of all or
substantially all of the properties and assets of Holdings and its Subsidiaries
taken as a whole, or of the Company and its Subsidiaries taken as a whole, to
any Person or "person" (as such term is used in Section 13(d)(3) of the Exchange
Act), other than the Principals, Management Investors or their Related Parties;
(ii) the adoption of a plan relating to the liquidation or dissolution of
Holdings or the Company; (iii) the consummation of any transaction (including,
without limitation, any merger or consolidation), as a result of which, (x)
prior to a Note Registration, (1) the Principals, Management Investors and their
Related Parties beneficially own and control, directly or indirectly, less than
51% of the aggregate voting interest attributable to all outstanding Capital
Stock of Holdings, or (2) GEI and its Affiliates beneficially own, directly or
indirectly, less than 25% of the aggregate voting interest attributable to all
outstanding Capital Stock of Holdings, or (y) Holdings ceases to own directly
100% of the outstanding Equity Interests of the Company or (z) any Person or
"group" (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act),
other than the Principals, Management Investors or their Related Parties, shall
have acquired, directly or indirectly, beneficial ownership of 35% or more on a
fully diluted basis of the aggregate voting interest attributable to all
outstanding Capital Stock of Holdings or (iv) the first day on which a majority
of the members of the Board of Directors of Holdings are not Continuing
Directors.
"CHANGE OF CONTROL OFFER" is defined in SECTION 4.09(A).
"CHANGE OF CONTROL PAYMENT" is defined in SECTION 4.09(A).
"CHANGE OF CONTROL PAYMENT DATE" is defined in SECTION 4.09
(B)(II).
"CLOSING" is defined in the Purchase Agreement.
"CLOSING DATE" means September 20, 2000.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
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"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, the body
performing such duties at such time.
"COMMON STOCK" of any Person means any and all shares, units,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person's common stock whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
"COMPANY" means Vicar Operating, Inc., a Delaware corporation.
"COMPANY GUARANTOR" means any Subsidiary of the Company which is
a guarantor of the Company Notes under the Company Indenture.
"COMPANY INDENTURE" means that certain Indenture, dated as of the
date hereof, among the Company, the Company Guarantors listed on the signature
pages thereof and Chase Manhattan Bank and Trust Company, National Association,
trustee thereunder.
"COMPANY NOTES" means those certain 13.5% Senior Subordinated
Notes due 2010 of the Company issued on the Closing Date in an original
aggregate principal amount of $20,000,000, and any such notes issued in exchange
or replacement therefor, including any such notes issued in exchange for the
Company Notes pursuant to the exchange and registration rights agreement with
respect thereto.
"CONSOLIDATED" or "CONSOLIDATED" (including the correlative term
"consolidating") or on a "CONSOLIDATED BASIS," when used with reference to any
financial term in this Indenture (but not when used with respect to any Tax
Return or tax liability), means the aggregate for two or more Persons of the
amounts signified by such term for all such Persons, with inter-company items
eliminated in accordance with GAAP.
"CONSOLIDATED EBITDA" means for the applicable period of
measurement, the Consolidated Net Income of Holdings and its Subsidiaries on a
consolidated basis, PLUS, without duplication, the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Expense for such period, PLUS (ii) provisions for taxes based on income, PLUS
(iii) total depreciation expense, PLUS (iv) total amortization expense, plus (v)
other non-cash items reducing Consolidated Net Income (excluding any such
non-cash item to the extent that it represents an accrual or reserve for
potential cash items in any future period or amortization of a prepaid cash item
but, notwithstanding anything to the contrary herein, including, without
limitation, reserves for lease expenses and charges and expenses related to the
closure of hospitals to the extent not paid in cash), all fees and expenses
incurred in connection with the Merger and the financing thereof, including all
non-compete payments, employment contract termination payments, deferred
payments for restricted Capital Stock of Holdings and stay bonuses made in
connection with the Merger and identified on Schedule 1(q) to the Purchase
Agreement; PLUS (vi) non-recurring costs incurred by Holdings and its
Subsidiaries in 1999 relating to year 2000 computer matters, LESS other non-cash
items increasing Consolidated Net
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Income (excluding any such non-cash item to the extent it represents the
reversal of an accrual or reserve for potential cash item in any prior period).
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) Adjusted EBITDA for the applicable period ending
on such date to (b) Consolidated Interest Expense for such applicable period.
"CONSOLIDATED INTEREST EXPENSE" means for the applicable period
of measurement of Holdings and its Subsidiaries on a consolidated basis, the
aggregate interest expense (whether or not payable in cash) for such period
(including all commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments) for Holdings and its
Subsidiaries on a consolidated basis, but excluding all amortization of
financing fees and other charges incurred by Holdings and its Subsidiaries in
connection with the issuance of the Notes, the issuance of the Company Notes and
the borrowings under the Credit Agreement, MINUS interest income of Holdings and
its Subsidiaries for such period, on a consolidated basis.
"CONSOLIDATED NET INCOME" means for any period the net income (or
loss) before provision for dividends on Holdings Preferred Stock of Holdings and
its Subsidiaries on a consolidated basis for such period determined in
conformity with GAAP, but excluding the following clauses (a) through (g) to the
extent included in the computations thereof: (a) that percentage of net income
(or loss) of each Subsidiary of the Company attributable to minority interests
in such Subsidiary; (b) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Holdings or is merged into or consolidated with
Holdings or any of its Subsidiaries or that Person's assets are acquired by
Holdings or any of its Subsidiaries; (c) the income (or loss) of any Person
(other than a Subsidiary) in which such Person has an interest except to the
extent of the amount of dividends or other distributions actually paid to the
Company; (d) the income of any Subsidiary of Holdings to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary; provided, however, that
the income of the Company and its Subsidiaries shall not be excluded by reason
of restrictions contained in the Credit Agreement or the Company Indenture or
any similar agreements made in connection with any Refinancing thereof; (e) any
after tax gains or losses attributable to Asset Dispositions or returned surplus
assets of any pension plan; (f) all fees and expenses incurred in connection
with the Merger and the financing thereof, including all non-compete payments,
employment contract termination payments, deferred payments for restricted
Capital Stock of Holdings and stay bonuses made in connection with the Merger
identified on Schedule 1(q) to the Purchase Agreement and all premiums paid to
retire debt in connection with the Merger, and (g) (to the extent not included
in clauses (a) through (f) above) (i) any net extraordinary gains or net
extraordinary losses or (ii) any net non-recurring gains or non-recurring losses
to the extent attributable to Asset Dispositions, the exercise of options to
acquire Capital Stock and the extinguishment of Indebtedness.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the equity of the common equity holders of such Person
and its Subsidiaries on a
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consolidated basis as of such date plus (ii) the respective amounts reported on
such Person's balance sheet as of such date with respect to any series of
preferred stock (other than Disqualified Capital Stock) that by its terms is not
entitled to the payment of dividends unless such dividends may be declared and
paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock (provided, however, that notwithstanding the
foregoing, the respective amounts on Holdings' balance sheet on such date with
respect to Senior Preferred Stock and Junior Preferred Stock (as defined in the
Purchase Agreement ) shall include the aggregate liquidation value of such
Preferred Stock as of the Closing Date), less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a Subsidiary of such Person and (y) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" as of any date of determination
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) which would appear on a consolidated balance
sheet of Holdings and its Subsidiaries, determined on a Consolidated basis in
accordance with GAAP, after deducting therefrom to the extent otherwise
included, the amounts of: (a) minority interests in Subsidiaries held by Persons
other than Holdings or a Subsidiary; (b) excess of cost over fair value of
assets of businesses acquired, as determined in good faith by the Board of
Directors of Holdings; (c) any revaluation or other write-up in book value of
assets subsequent to the Closing Date as a result of a change in the method of
valuation in accordance with GAAP consistently applied; (d) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (e) treasury stock; and (f)
cash set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Capital Stock.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors immediately after consummation of the Merger or (ii) was
nominated for election or elected to such Board of Directors with the approval,
recommendation or endorsement of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"COVERAGE RATIO TEST" is defined in SECTION 5.04(A).
"CREDIT AGREEMENT" means the Credit and Guaranty Agreement, dated
as of the Closing Date, by and among the Company, Holdings and certain
Subsidiaries of the Company, as guarantors, the lenders party thereto from time
to time, Xxxxxxx Xxxxx Credit Partners L.P., as Sole Lead Arranger and as Sole
Syndication Agent, and Xxxxx Fargo Bank, N.A., as Administrative Agent and as
Collateral Agent, consisting of the following facilities: (i) $250 million
aggregate principal amount of term loans and (ii) a $50 million revolving credit
facility,
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together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreement or
agreements may be amended (including any amendment and restatement thereof),
supplemented, replaced, restructured, Refinanced or otherwise modified from time
to time, including any amendment, supplement, modification or agreement adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder or
extending the maturity of, Refinancing, replacing or otherwise restructuring all
or any portion of the Indebtedness under such agreement or any successor or
replacement agreement, and whether by the same or any other agent, lender or
group of lenders or one or more agreements; provided that in no event may such
agreement be amended (including any amendment and restatement thereof),
supplemented, replaced, restructured, Refinanced or otherwise modified to
increase the amount of available borrowings (except (x) for increases not in
excess of the actual amount of accrued interest thereon plus prepayment premiums
and fees and expenses associated with a Refinancing, replacement or other
restructuring thereunder, (y) as permitted to be Incurred under SECTIONS
5.04(A), 5.04(B)(III), 5.04(B)(VII) and 5.04(B)(XIV), and (z) for other
increases not to exceed $25 million in principal amount).
"CREDIT DOCUMENTS" means the Credit Agreement, any Currency
Agreement or Interest Swap Obligations with respect to Indebtedness outstanding
under the Credit Agreement, and all certificates, instruments, financial and
other statements and other documents and agreements made or delivered from time
to time in connection therewith and related thereto.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect Holdings or any Subsidiary of Holdings against fluctuations in currency
values.
"CUSTODIAN" is defined in SECTION 7.01.
"DEFINITIVE NOTE" is defined in the APPENDIX.
"DEFAULT" means any event, act or condition that is, or with the
giving of notice, lapse of time or both would constitute, an Event of Default.
"DEPOSITARY" is defined in the APPENDIX.
"DESIGNATED SENIOR INDEBTEDNESS" means any Indebtedness so
designated pursuant to the Company Indenture.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the sole
option of the holder thereof (except, in each case, upon the occurrence of a
Change of Control), on or prior to the date that is 91 days after the Stated
Maturity of the Notes.
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"EARN-OUT OBLIGATIONS" means any unsecured contingent liability
of Holdings owed to any seller in connection with a Permitted Acquisition that
(a) constitutes a portion of the purchase price for such Permitted Acquisition
but is not an amount certain on the date of incurrence thereof and is not
subject to any right of acceleration by such seller and (b) is only payable upon
the achievement of performance standards by the Person or other property
acquired in such Permitted Acquisition and in an amount based upon such
achievement provided that the maximum aggregate amount of such liability shall
be fixed at a specified amount on the date of such Permitted Acquisition;
provided, however, that the term Earn-Out Obligations shall also include those
obligations set forth in Schedule 1(ss) to the Purchase Agreement.
"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).
"EQUITY OFFERING" means any underwritten public offering of
Qualified Capital Stock of Holdings, whether on a primary or secondary basis,
pursuant to an effective registration statement filed under the Securities Act.
"EVENT OF DEFAULT" is defined in SECTION 7.01.
"EXCESS PROCEEDS" is defined in SECTION 5.05(B).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" is defined in the
APPENDIX.
"EXCHANGE NOTES" is defined in the recitals.
"EXEMPT SUBSIDIARIES" shall mean those Permitted Partially Owned
Subsidiaries of the Company listed on Schedule 1(f) of the Company Purchase
Agreement that are not Company Guarantors.
"EXISTING INDEBTEDNESS" is defined in the Purchase Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length transaction between a
willing seller and a willing and able buyer.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its
Subsidiaries ending on December 31 of each calendar year.
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial
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Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession.
"GEI" means Green Equity Investors III, L.P., a Delaware limited
partnership.
"GLOBAL NOTES LEGEND" is defined in the APPENDIX.
"GOVERNMENTAL AUTHORITY" means (a) the government of the United
States of America or any State or other political subdivision thereof, (b) any
government or political subdivision of any other jurisdiction in which Holdings
or any of its Subsidiaries conducts all or any part of its business, or which
properly asserts jurisdiction over any properties of Holdings or any of its
Subsidiaries or (c) any entity properly exercising executive, legislative,
judicial, regulatory or administrative functions of any such government.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"GUARANTOR" means a Subsidiary of the Company that executes and
delivers a Guarantee of the Company's obligations under the Credit Documents and
a subordinated Guarantee of the Company's obligations with respect to the
Company Notes.
"GUARANTOR SENIOR INDEBTEDNESS" is defined in the Company
Indenture.
"HOLDER" means a Person in whose name a Note is registered on the
Registrar.
"HOLDINGS" is defined in the preamble.
"INCUR" is defined in SECTION 5.04(A).
"INDEBTEDNESS" means, with respect to any Person, without
duplication: (i) all Obligations of such Person for borrowed money (including,
without limitation, Senior Indebtedness); (ii) all Obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
Capitalized Lease Obligations of such Person; (iv) all Obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement, in each case to the extent the purchase price is due more than six
(6) months from the date the obligation is Incurred (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course of
business); (v) all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction; (vi)
Guarantees and other contingent obligations in respect of Indebtedness referred
to in clauses (i) through (v) above and clause (viii) below; (vii) all
Obligations of any other Person of the type referred to in clauses (i) through
(v) which are secured by any Lien on any property or asset of such Person, the
amount of such Obligation being deemed to be the lesser of the fair market value
of such property or asset or the
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amount of the Obligation so secured; and (viii) all Obligations under Currency
Agreements and all Interest Swap Obligations of such Person.
"INDENTURE" is defined in the preamble.
"INITIAL NOTES" is defined in the recitals.
"INSTITUTIONAL ACCREDITED INVESTOR" is defined in the APPENDIX.
"INTEREST PAYMENT DATE" is defined in EXHIBIT A.
"INTEREST SWAP OBLIGATIONS" means the Obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of any beneficial interest
in, including stock, partnership interest or other Equity Interests of, or
ownership interest in, any other Person (other than Holdings or any other Person
who was a Restricted Subsidiary of Holdings at the time of such Investment); and
(ii) any direct or indirect loan, advance or capital contribution by Holdings or
any of its Subsidiaries to any other Person, including all indebtedness and
accounts receivable from that other Person that did not arise from sales to or
services provided to that other Person in the Ordinary Course of Business. The
amount of any Investment shall be the original cost of such Investment plus the
cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment but less all cash distributions constituting a return of capital.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in New York or California or at a place of payment are
authorized by law, regulation or executive order to remain closed. If any
payment date in respect of the Notes is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"LIEN" means any lien, mortgage, pledge, security interest,
charge, encumbrance or governmental levy or assessment of any kind, whether
voluntary or involuntary (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"MANAGEMENT INVESTORS" means Continuing Stockholders (as defined
in the Merger Agreement) and initial holders of Common Stock of Holdings
reserved for future issuance to employees of Holdings and its Subsidiaries as
set forth on Schedule 1(d) of the Purchase Agreement.
Page 11
"MANAGEMENT SERVICES AGREEMENT" means that certain Management
Services Agreement, dated as of the Closing Date, by and between Holdings and
the Company, on the one hand, and Xxxxxxx Xxxxx & Partners, L.P., on the other.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole or (b) the material impairment of the ability of the Company or
any Guarantor that constitutes a Material Subsidiary to perform in any material
respect its material obligations under any Transaction Document to which it is a
party or of any Holder to enforce any Transaction Document in any material
respect or collect any of the Obligations thereunder.
"MATERIAL SUBSIDIARY" means one or more Subsidiaries of the
Company which individually or in the aggregate shall have accounted for more
than five percent (5%) of Consolidated EBITDA for the four-Fiscal Quarter period
most recently ended.
"MATURITY", when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise (including in connection with any offer to purchase
that this Indenture requires Holdings to make).
"MERGER" means the merger of Merger Corp. with and into Holdings
as contemplated by the Merger Agreement.
"MERGER AGREEMENT" means that certain Amended and Restated
Agreement and Plan of Merger, dated as of August 11, 2000, by and among
Holdings, the Company and Merger Corp.
"MERGER CORP." means Vicar Recap, Inc., a Delaware corporation
formed by GEI.
"NET PROCEEDS" means cash proceeds actually received by Holdings
or any of its Subsidiaries from any Asset Disposition (including insurance
proceeds, awards of condemnation, and payments under notes or other debt
securities received in connection with any Asset Disposition), net of (a) the
costs of such sale, issuance, lease, transfer or other disposition (including
Taxes attributable to such sale, lease or transfer), (b) amounts applied to
repayment of Indebtedness (other than revolving credit Indebtedness under the
Credit Agreement, without a corresponding reduction in the revolving credit
commitment) secured by a Lien on the asset or property disposed of, (c) if such
Asset Disposition involves the sale of a discrete business or product line, any
accrued liabilities of such business or product line required to be paid or
retained by Holdings or any of its Subsidiaries as part of such disposition and
(d) appropriate amounts to be provided by Holdings or a Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with an Asset Disposition and retained by Holdings or such
Subsidiary, as the case may be, after such Asset Disposition, including, without
limitation, pension and benefit liabilities, liabilities related to
environmental matters or liabilities under any indemnification obligations
associated with such Asset Disposition.
Page 12
"NOTE REGISTRATION" shall mean the first to occur of (i) the
consummation of a Registered Exchange Offer and (ii) the effectiveness of a
Shelf Registration Statement filed with the Commission.
"NOTES" is defined in the recitals.
"NOTES CUSTODIAN" is defined in the APPENDIX.
"NOTICE OF DEFAULT" is defined in SECTION 8.05.
"OBLIGATIONS" means all obligations for principal, premium,
interest, penalties, fees, indemnification, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"OFFER AMOUNT" is defined in SECTION 4.10(A).
"OFFER PERIOD" is defined in SECTION 4.10(A).
"OFFICERS' CERTIFICATE" of Holdings means a certificate signed on
behalf of Holdings by the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Operating Officer, any Vice President, the Chief
Financial Officer, the Chief Accounting Officer, Treasurer, the Assistant
Treasurer, Controller, the Secretary or an Assistant Secretary (or any such
other officer that performs similar duties) of Holdings. One of the officers
signing an Officers' Certificate given pursuant to SECTION 4.06 shall be the
principal executive, financial or accounting officer or treasurer of Holdings.
"OPINION OF COUNSEL" means a written opinion from legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or counsel
to Holdings or the Trustee.
"ORDINARY COURSE OF BUSINESS" means, in respect of any
transaction involving Holdings or any Subsidiary of Holdings, the ordinary
course of such Person's business, as conducted by any such Person in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in this Indenture, the Purchase
Agreement, the Notes and the related documents.
"PAYING AGENT" is defined in SECTION 2.03.
"PERMITS" means all licenses, permits, certificates of need,
approvals and authorizations from all Governmental Authorities required to
lawfully conduct a business.
"PERMITTED ACQUISITION" means the purchase by the Company or a
Subsidiary of the Company of all or substantially all of the assets of a Person
whose primary business is the same, related, ancillary or complementary to the
business in which the Company and its Subsidiaries were engaged on the date of
this Indenture, or any Investment by the Company or any Subsidiary of the
Company in a Person, if as a result of such Investment (i) such Person and each
Subsidiary of such Person becomes a Restricted Subsidiary of the Company and,
(a) if a
Page 13
wholly-owned Domestic Subsidiary, a Company Guarantor or (b) if a less than
wholly-owned Domestic Subsidiary, a Permitted Partially Owned Subsidiary, in
each case whose primary business is the same, related, ancillary or
complementary to the business in which the Company and its Subsidiaries were
engaged on the date of this Indenture or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, a Restricted Subsidiary of the
Company and whose primary business is the same, related, ancillary or
complementary to the business in which the Company and its Subsidiaries were
engaged in on the date of this Indenture; PROVIDED that at the time of such
Investment or purchase, no Default or Event of Default exists or would be caused
upon the consummation thereof.
"PERMITTED INVESTMENTS" means:
(i) any Investment in (including, without limitation, loans and
advances to) the Company or a Restricted Subsidiary of the Company
that (other than Permitted Partially Owned Subsidiaries) is a Company
Guarantor and whose primary business is the same, related, ancillary
or complementary to the business in which the Company and its
Subsidiaries were engaged in on the date of such Investment;
(ii) any Investment in Cash Equivalents, the Notes or the Company
Notes;
(iii) any Investment related to or arising out of a Permitted
Acquisition;
(iv) any Investment made in the Ordinary Course of Business which
results from the receipt of non-cash consideration from an asset sale
made pursuant to and in compliance with the provisions of SECTION 5.05
or from any sale or other disposition of assets not constituting an
Asset Disposition hereunder;
(v) loans and advances to employees for emergency, moving,
entertainment, travel and other business expenses in the Ordinary
Course of Business not to exceed $1,500,000 in the aggregate at any
time outstanding;
(vi) loans and advances not to exceed $1,500,000 at any time
outstanding to employees of Holdings or its Subsidiaries for the
purpose of funding the purchase of Capital Stock of Holdings by such
employees;
(vii) any Investments received as part of the settlement of
litigation or in satisfaction of extensions of credit to any Person
otherwise permitted under this Indenture pursuant to the
reorganization, bankruptcy or liquidation of such Person or a good
faith settlement of debts by said Person;
(viii) any Investment existing on the date of this Indenture and
listed on Schedule 1(tt) to the Purchase Agreement;
Page 14
(ix) Investments of a Person or any of its Subsidiaries existing
at the time such Person becomes a Subsidiary of the Company or at the
time such Person merges or consolidates with the Company or any of its
Subsidiaries, in either case in compliance with this Indenture;
provided such Investments were not made by such Person in connection
with or in anticipation or contemplation of such Person becoming a
Subsidiary of the Company or such merger or consolidation;
(x) Investments made in connection with purchase price
adjustments, contingent purchase price payments or other Earn-Out
Obligations paid in connection with Investments otherwise permitted
under this Indenture;
(xi) Investments in securities received in settlement of trade
obligations in the Ordinary Course of Business; and
(xii) other Investments in Persons who are not Affiliates of
Holdings or any of its Subsidiaries not to exceed $5 million at any
time outstanding.
"PERMITTED LIENS" means:
(i) Liens to secure the performance of statutory obligations,
surety or appeal bonds, or other obligations of a like nature incurred
in the Ordinary Course of Business;
(ii) Liens for Taxes, or claims that are (x) not yet due and
payable or (y) which are due and payable and are being contested in
good faith by appropriate proceedings which stay enforcement of such
Liens; provided that appropriate provisions shall have been
established therefor in accordance with GAAP, and further provided
that no notice of lien has been filed or recorded with any
Governmental Authority with respect thereto;
(iii) any judgment Lien arising out of a judgment not
constituting an Event of Default under Section 7.01; and
(iv) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other similar liens imposed by law, which
are incurred in the Ordinary Course of Business for sums not more than
ninety (90) days delinquent or which are being diligently contested in
good faith in a manner which stays enforcement of such Liens; provided
that appropriate provisions shall have been established therefor in
accordance with GAAP.
"PERMITTED PARTIALLY OWNED SUBSIDIARY" means the Exempt
Subsidiaries and each other Subsidiary designated as a Permitted Partially Owned
Subsidiary by the Company in writing to the Trustee, provided (i) that with
respect to each Permitted Partially Owned Subsidiary other than the Exempt
Subsidiaries, Capital Stock representing 70% or more of the aggregate voting and
economic interests in such Subsidiary is directly or indirectly owned,
beneficially and of record, by the Company, (ii) the Company shall use its
commercially
Page 15
reasonable efforts to cause each Subsidiary to become a Guarantor, (iii) any
Capital Stock not owned directly or indirectly by the Company is owned, directly
or indirectly, by one or more licensed veterinarians (or one or more
professional corporations owned by such licensed veterinarians) who will be
actively involved in the business of such Subsidiary, and (iv) at the time of
designation of any Permitted Partially Owned Subsidiary as such, that portion of
Consolidated EBITDA attributable to all Permitted Partially Owned Subsidiaries
(including the Subsidiary proposed to be designated as such) does not represent
more than 10% of the Consolidated EBITDA for the four-Fiscal Quarter period most
recently ended.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
Holdings or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to Refinance other Indebtedness of any such Persons; PROVIDED,
HOWEVER, that (i) the principal amount of such Permitted Refinancing
Indebtedness does not exceed the principal amount plus accrued interest and
premium, if any (set forth in the original instrument representing such
Indebtedness), of the Indebtedness so Refinanced (plus the amount of reasonable
fees and expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date on or later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, at the time of such
Refinancing, the Indebtedness being Refinanced; (iii) if the Indebtedness being
Refinanced is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and is subordinated in right of payment to, the Notes on terms at least
as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being Refinanced; and (iv) such Indebtedness is
Incurred by the Person who is the obligor on the Indebtedness being Refinanced.
"Permitted Refinancing Indebtedness" shall not include Indebtedness under the
Credit Agreement which may be Refinanced in accordance with the definition
thereof.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"PIK NOTES" has the meaning ascribed thereto in the recitals.
"PREFERRED STOCK" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation, and shall include
the 14% Series A Senior Redeemable Exchangeable Cumulative Preferred Stock of
Holdings and the 12% Series B Junior Redeemable Cumulative Preferred Stock of
Holdings.
"PRINCIPALS" means GEI and certain entities affiliated with (i)
Trust Company of the West and Xxxxxxxx Xxxx Advisors and (ii) the following
limited partners in GEI: CalPERS, Caisse De Depot, Procific and PPM America.
"PURCHASE DATE" is defined in SECTION 4.10(A).
Page 16
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of
the Closing Date, by and among Holdings and the Purchasers.
"PURCHASERS" is defined in the APPENDIX.
"QIB" is defined in the APPENDIX.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"REDEMPTION DATE," when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture and the Notes.
"REDEMPTION PRICE," when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture and the Notes.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "REFINANCED" and "REFINANCING"
shall have correlative meanings.
"REGISTERED EXCHANGE OFFER" is defined in the APPENDIX.
"REGISTRAR" is defined in SECTION 2.03.
"REGISTRATION DEFAULT" is defined in EXHIBIT A.
"REGULAR RECORD DATE" is defined in EXHIBIT A.
"REGULATION S" is defined in the APPENDIX.
"RELATED PARTY" with respect to any Principal means (i) any
controlling stockholder of such Principal, any Subsidiary of such Principal or
any general partner of such Principal, and (ii) any Affiliate of such Principal
and any investment fund or investment partnership managed by any Person that is,
or is an Affiliate of, such Principal to the extent such Affiliate or other
investment fund or investment partnership makes an Investment in Holdings
through the acquisition of Capital Stock from Holdings, and with respect to any
Management Investor, means a revocable inter-vivos trust established by such
Person, such Person's estate, spouse, child, parent or other relative (by blood,
marriage or adoption) of the first degree, or any trust established for the
benefit of any of the foregoing.
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative in any respect of any Designated Senior Indebtedness;
PROVIDED that if, and for so long as, any Designated Senior Indebtedness lacks
such a representative, then the Representative for such Designated Senior
Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such Designated Senior Indebtedness in respect
of any Designated Senior Indebtedness. In the case of Indebtedness under the
Credit Agreement, the
Page 17
Representative shall mean Xxxxx Fargo Bank, N.A. (000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: S. Xxxxxxx St. Geme (telecopier no.: (213)
628-9694)). or any successor thereto under the Credit Agreement of which the
Trustee is notified.
"REQUIRED HOLDERS" means Holders holding more than 50% of the
aggregate outstanding principal amount of the outstanding Notes (exclusive of
Notes then owned directly or indirectly by Holdings, the Company or any of their
respective Subsidiaries or Affiliates).
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED NOTES LEGEND" is defined in the APPENDIX.
"RESTRICTED PAYMENTS" is defined in SECTION 5.02.
"RESTRICTED SUBSIDIARY" means either a Wholly Owned Subsidiary or
a Permitted Partially Owned Subsidiary.
"RULE 501" is defined in the APPENDIX.
"RULE 144A" is defined in the APPENDIX.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to Holdings or a Subsidiary of any property, whether owned by
Holdings or any Subsidiary at the Closing Date or later acquired, which has been
or is to be sold or transferred by Holdings or such Subsidiary to such Person or
any other Person from whom funds have been or are to be advanced by such Person
on the security of such property.
"SECURITIES ACT" is defined in the APPENDIX.
"SELLER NOTES" means, collectively, any unsecured promissory
notes issued by Holdings to any seller or sellers in connection with a Permitted
Acquisition.
"SENIOR INDEBTEDNESS" is defined in the Company Indenture.
"SHELF REGISTRATION STATEMENT" is defined in the APPENDIX.
"SPECIAL INTEREST" is defined in EXHIBIT A.
"SPECIAL MANDATORY REDEMPTION" is defined in paragraph 6 of the
Notes.
"SPECIFIED ASSETS" means the investment by the Company or its
Subsidiaries specified in numbers 1 and 2 in Schedule 1(tt) to the Purchase
Agreement.
"STATED MATURITY," when used with respect to any Note or any
installment of interest thereon, means the date specified in this Indenture or
such Note as the scheduled fixed date on which the principal amount of such Note
or such installment of interest is due and
Page 18
payable and shall not include any contingent obligation to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled
for payment thereof.
"STATED MATURITY DATE" is defined in EXHIBIT A.
"STOCKHOLDERS AGREEMENT" means that certain Stockholders
Agreement, dated as of the Closing Date, by and among Holdings, the Purchasers,
the Principals and certain of the Management Investors.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Holdings
permitted hereunder which is expressly subordinated to and junior to the payment
and performance of the Notes to the same extent the Company Notes are
subordinated to the Indebtedness Incurred by the Company under the Credit
Documents as of the date hereof.
"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). Any Person
becoming a Subsidiary of Holdings after the date of this Indenture should be
deemed to have Incurred all of its outstanding Indebtedness on the date it
becomes a Subsidiary.
"SUCCESSOR COMPANY" is defined in SECTION 6.02.
"TAX RETURNS" means all reports and returns (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be filed with respect to Taxes.
"TAXES" means all federal, state, local or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, employment, withholding or other taxes, duties or
assessments of any kind whatsoever imposed on any Person, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties and includes any liability for Taxes of
another Person by contract, as a transferee or successor, under Treasury
regulation Section 1.1502-6 or analogous state, local or foreign law provision
or otherwise.
"TIA" means the Trust Indenture Act of 1939 (15 X.X.X.xx.xx.
77aaa-77bbbb), as amended from time to time.
"TRANSACTION DOCUMENTS" is defined in the Purchase Agreement.
"TRANSFER RESTRICTED NOTES" is defined in the APPENDIX.
Page 19
"TRIGGER DATE" is defined in the Exchange and Registration
Rights Agreement.
"TRUSTEE" is defined in the preamble.
"TRUST OFFICER" means, when used with respect to the Trustee, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, or any other
officer of the Trustee in its Corporate Trust Administration Department
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"UNITED STATES" shall have the meaning assigned to such term in
Regulation S.
"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 that are not callable or redeemable at the issuer's option.
"WARRANT AGREEMENT" is defined in the Purchase Agreement.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. 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:
"indenture securities" means the Notes, the PIK Notes and the
Exchange Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
Page 20
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means Holdings and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meanings assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) "to" and "until" each mean "to but excluding";
(f) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein);
(g) any reference herein to any Person shall be construed to
include such Person's successors and assigns;
(h) words in the singular include the plural and words in the
plural include the singular;
(i) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(j) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in accordance
with GAAP; and
(k) 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.
Page 21
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING. Provisions relating to the Initial Notes,
the PIK Notes and the Exchange Notes to be issued in exchange for the Initial
Notes or otherwise as provided in this Indenture are set forth in the Appendix,
which is hereby incorporated in and expressly made a part of this Indenture. The
Initial Notes and the Trustee's certificate of authentication relating thereto
shall each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange Notes
and the Trustee's certificate of authentication relating thereto shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated in
and expressly made a part of this Indenture. The PIK Notes and the Trustee's
certificate of authentication relating thereto shall each be in the form of
Exhibit A, if the PIK Notes are issued as interest on any Initial Notes, and in
the form of Exhibit B, if the PIK Notes are issued as interest on any Exchange
Notes. The Notes may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which Holdings is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to Holdings). Each Note shall be dated the date of its authentication. The Notes
shall bear interest as set forth in the first paragraph of the reverse side of
the Notes. The Notes shall be issuable only in registered form without interest
coupons and only, for Notes other than PIK Notes (which PIK Notes shall be
issued in any whole dollar amount, rounded to the nearest dollar), in
denominations of $1,000 (in principal amount at maturity) and multiples thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION. One officer shall sign
the Notes for Holdings by manual or facsimile signature.
If an officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall, upon written direction of Holdings,
authenticate and make available for delivery Notes as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably
acceptable to Holdings to authenticate the Notes. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to Holdings. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
Page 22
SECTION 2.03. REGISTRAR AND PAYING AGENT. (a) Holdings shall maintain an
office or agency, which shall be located in the Borough of Manhattan, The City
of New York, where Notes may be presented for registration of transfer or for
exchange (the "REGISTRAR") and an office or agency where Notes may be presented
for payment (the "PAYING AGENT"). The Registrar shall keep a register of the
Notes and of their transfer and exchange. Holdings may have one or more
co-registrars and one or more additional paying agents. The term "Paying Agent"
includes any additional paying agent, and the term "Registrar" includes any
co-registrars. Holdings initially appoints the Trustee as (i) Registrar and
Paying Agent in connection with the Notes and (ii) the Notes Custodian with
respect to the Global Exchange Notes (as defined in the Appendix).
(b) Holdings shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. Holdings shall notify the Trustee
of the name and address of any such agent. If Holdings fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to SECTION 8.07. Holdings or any
of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent
or Registrar.
(c) Holdings may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; PROVIDED,
HOWEVER, that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by Holdings and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to Holdings and the Trustee; PROVIDED,
HOWEVER, that the Trustee may resign as Paying Agent or Registrar only if the
Trustee also resigns as Trustee in accordance with SECTION 8.08.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal of and interest on any Note, Holdings shall deposit with
the Paying Agent (or if Holdings or a Subsidiary is acting as Paying Agent,
segregate and hold in trust for the benefit of the Persons entitled thereto) a
sum sufficient to pay such principal and interest when so becoming due. Holdings
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Notes and shall notify the Trustee of any default by Holdings in
making any such payment. If Holdings or a Subsidiary of Holdings acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. Holdings at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by the
Paying Agent. Upon complying with this SECTION 2.04, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
SECTION 2.05. HOLDER LISTS. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, Holdings
shall furnish, or cause the Registrar to furnish, to the
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Trustee, in writing at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer and in compliance with the Appendix. When a Note is
presented to the Registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if its requirements therefor are met.
When Notes are presented to the Registrar with a request to exchange them for an
equal principal amount of Notes of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, Holdings shall execute and the Trustee
shall authenticate Notes at the Registrar's request. Holdings may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this SECTION
2.06. Holdings shall not be required to make and the Registrar need not register
transfers or exchanges of Notes selected for redemption (except, in the case of
Notes to be redeemed in part, the portion thereof not to be redeemed) or any
Notes for a period of 15 days before a selection of Notes to be redeemed.
Prior to the due presentation for registration of transfer of any
Note, Holdings, the Trustee, the Paying Agent and the Registrar shall treat the
Person in whose name a Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest, if any, on such
Note and for all other purposes whatsoever, whether or not such Note is overdue,
and none of Holdings, the Paying Agent, the Trustee or the Registrar shall be
affected by notice to the contrary.
Any Holder of a Global Exchange Note shall, by acceptance of such
Global Exchange Note, agree that transfers of beneficial interest in such Global
Exchange Note may be effected only through a book-entry system maintained by (a)
the Holder of such Global Exchange Note (or its agent) or (b) any Holder of a
beneficial interest in such Global Exchange Note, and that ownership of a
beneficial interest in such Global Exchange Note shall be required to be
reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Notes surrendered upon such
transfer or exchange.
SECTION 2.07. REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, Holdings shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the New
York Uniform Commercial Code are met, such that the Holder (a) satisfies
Holdings or the Trustee within a reasonable time after such Holder has notice of
such loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (b) makes such request to
Holdings or the Trustee prior to the Note being acquired by a protected
purchaser as defined in Section 8-303 of the New York Uniform
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Commercial Code (a "PROTECTED PURCHASER") and (c) satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or Holdings, such Holder
shall furnish an indemnity bond sufficient in the judgment of the Trustee to
protect Holdings, the Trustee, the Paying Agent and the Registrar from any loss
that any of them may suffer if a Note is replaced, unless the Holder is an
institution with a Consolidated Net Worth in excess of $100 million and
contractually commits to protect Holdings, the Trustee, the Paying Agent and the
Registrar from any loss that any of them may suffer if a Note is replaced, in
which case no such indemnity bond may be required. Holdings and the Trustee may
charge the Holder for their expenses in replacing a Note. In the event any such
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, Holdings in its discretion may pay such Note instead of
issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of Holdings.
The provisions of this SECTION 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Notes.
SECTION 2.08. OUTSTANDING NOTES. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this SECTION 2.08 as not
outstanding. Subject to SECTION 11.06, a Note does not cease to be outstanding
because Holdings or an Affiliate of Holdings holds the Note.
If a Note is replaced pursuant to SECTION 2.07, it ceases to be
outstanding unless the Trustee and Holdings receive proof satisfactory to them
that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a Redemption Date or maturity date money sufficient to
pay all principal and interest and Special Interest, if any, payable on that
date with respect to the Notes (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Holders on that date pursuant to the terms of this Indenture, then
on and after that date such Notes (or portions thereof) cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY NOTES. Until Definitive Notes are ready for
delivery, Holdings may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of Definitive Notes
but may have variations that Holdings considers appropriate for temporary Notes.
Without unreasonable delay, Holdings shall prepare and the Trustee shall
authenticate Definitive Notes and deliver them in exchange for temporary Notes
upon surrender of such temporary Notes at the office or agency of Holdings,
without charge to the Holder.
SECTION 2.10. CANCELLATION. Holdings at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes
Page 25
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment or cancellation and deliver canceled Notes to
Holdings pursuant to written direction by an officer. Holdings may not issue new
Notes to replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Notes in place of canceled
Notes other than pursuant to the terms of this Indenture.
SECTION 2.11. DEFAULTED INTEREST. If Holdings defaults in a payment of
interest or Special Interest, if any, on the Notes, Holdings shall pay the
defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner. Holdings may pay the defaulted interest to the
Persons who are Holders on a subsequent special record date. Holdings 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 Holder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP NUMBERS. Holdings in issuing the Notes may use
Committee on Uniform Securities Identification Procedures numbers (the "CUSIP
NUMBERS") (if then generally in use) and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Holders; PROVIDED, HOWEVER,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.
ARTICLE 3.
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If Holdings elects to redeem Notes
pursuant to SECTION 4.09, SECTION 4.10 or paragraphs 5 or 6 of the Notes, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount at maturity of Notes to be redeemed. The redemption provisions of
paragraphs 5 and 6 of the Notes are fully incorporated herein. The Trustee may
conclusively rely on an Officers' Certificate and the calculations given therein
in making any redemption in accordance with Paragraph 6 of the Notes.
Holdings shall give each notice to the Trustee provided for in
this SECTION 3.01 at least 30 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 Holdings to the effect that such
redemption will comply with the conditions herein. If fewer than all the Notes
are to be redeemed, the record date relating to such redemption shall be
selected by Holdings 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.
Page 26
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. If fewer than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro
rata from all of the Holders. The Trustee shall make the selection from
outstanding Notes not previously called for redemption. The Trustee may select
for redemption portions of the principal amount at maturity of Notes that have
denominations larger than $1,000. Notes and portions of them the Trustee selects
shall be in principal amounts at maturity of $1,000 or a multiple thereof.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify
Holdings promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. (a) At least 10 days but not more
than 60 days before a date for redemption of Notes, Holdings shall mail a notice
of redemption by first-class mail or by telefacsimile, with written confirmation
of receipt, to each Holder of Notes to be redeemed at such Holder's registered
address.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accrued interest to
the Redemption Date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(v) if fewer than all the outstanding Notes are to be redeemed,
the certificate numbers and principal amount at maturity of the
particular Notes to be redeemed;
(vi) that, unless Holdings defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest and any Special
Interest on Notes (or portion thereof) called for redemption ceases to
accrue on and after the Redemption Date;
(vii) the CUSIP number, if any, printed on the Notes being
redeemed; and
(viii) 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 Notes.
(b) At Holdings' request, the Trustee shall give the notice of
redemption in the Company's name and at Holdings' expense. In such event,
Holdings shall provide the Trustee with the information required by this SECTION
3.03.
Page 27
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Notes 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 Notes shall be paid at the Redemption Price stated in the
notice, plus accrued interest and Special Interest, if any, to the Redemption
Date; PROVIDED, HOWEVER, that if the Redemption Date is after a Regular Record
Date and on or prior to the Interest Payment Date, the accrued interest and
Special Interest, if any, shall be payable to the Holder of the redeemed Notes
registered on the relevant Regular Record Date. 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.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. (New York
City time) on the Redemption Date, Holdings shall deposit with the Paying Agent
(or, if Holdings or a Subsidiary is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of, and accrued interest
and Special Interest, if any, on all Notes to be redeemed on that date other
than Notes or portions of Notes called for redemption that have been delivered
by Holdings to the Trustee for cancellation. On or after the Redemption Date,
the interest shall cease to accrue on Notes or portions thereof called for
redemption so long as Holdings has deposited with the Paying Agent funds
sufficient to pay the principal of, plus accrued and unpaid interest and Special
Interest, if any, on, the Notes to be redeemed, unless the Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture.
SECTION 3.06. NOTES REDEEMED IN PART. Upon surrender of a Note that is
redeemed in part, Holdings shall execute and the Trustee shall authenticate for
the Holder (at Holdings' expense) a new Note equal in principal amount at
maturity to the unredeemed portion of the Note surrendered.
ARTICLE 4.
AFFIRMATIVE COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
(a) Holdings shall promptly pay the principal of and interest on
the Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal of and interest on the Notes shall be considered paid on
the date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture money sufficient to pay all principal of and interest on the
Notes then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
(b) Holdings shall pay interest on overdue principal of the Notes
at the rate specified therefor in the Notes and shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Page 28
SECTION 4.02. COMMISSION REPORTS. Notwithstanding that Holdings may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, Holdings shall from and after a Note Registration, file with the
Commission, and provide the Trustee, Holders and prospective Holders (upon
request) within 15 days after it files them with the Commission, copies of its
annual report and the information, documents and other reports that are
specified in Section 13 and 15(d) of the Exchange Act. In addition, following an
initial Equity Offering, Holdings shall furnish to the Trustee and the Holders,
promptly upon their becoming available, copies of the annual report to
shareholders and any other information provided by Holdings to its public
shareholders generally. Holdings also shall comply with the other provisions of
TIA ss. 314(a).
SECTION 4.03. PRESERVATION OF CORPORATE EXISTENCE. Holdings shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (a) its corporate existence, and the corporate, limited liability
company, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of Holdings or any such Subsidiary and (b) the rights
(charter and statutory) and licenses of Holdings and its Subsidiaries; PROVIDED,
HOWEVER, that Holdings shall not be required to preserve any such right or
license, or the corporate, limited liability company, partnership or other
existence of any of its Subsidiaries if the loss thereof does not and would not
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.04. MAINTENANCE OF PROPERTIES. Holdings will cause all
properties used or useful in the conduct of its business or the business of any
of its Subsidiaries to be maintained and kept in good condition, repair and
working order and will cause to be made all necessary repairs, renewals and
replacements thereof, all as in the judgment of Holdings may be necessary so
that the business carried on in connection therewith may be properly conducted;
PROVIDED, HOWEVER, that the foregoing shall not prevent Holdings from
discontinuing the operation or maintenance of any of such properties if such
discontinuance does not and would not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.05. TAXES
(a) PAYMENT OF TAXES AND OTHER CLAIMS. Holdings shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all Taxes of Holdings or any of its Subsidiaries and (ii) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a Lien upon the property of Holdings or any of its Subsidiaries;
PROVIDED, HOWEVER, that Holdings shall not be required to pay or discharge or
cause to be paid or discharged any such Tax or claim (1) whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings, PROVIDED that appropriate reserves therefor are established in
Holdings' consolidated financial statements in accordance with GAAP or (2) if
the failure to pay such Tax or claim would not reasonably be expected to have a
Material Adverse Effect or would result in a Permitted Lien.
(b) TAX RETURNS. Holdings and its Subsidiaries shall timely file
or cause to be filed when due all material Tax Returns that are required to be
filed by or with respect to
Page 29
Holdings or any of its Subsidiaries for taxable years ending after the Closing
Date and shall pay any Taxes due in respect of such Tax Returns except as
permitted under SECTION 4.05(A).
(c) CONTEST PROVISIONS. Prior to Note Registration, Holdings
shall promptly notify the Holders in writing upon receipt by Holdings or any of
its Subsidiaries of notice of any pending or threatened federal, state, local or
foreign income or franchise Tax audits or assessments which may materially
affect the Tax liabilities of Holdings or any of its Subsidiaries.
(d) TRANSFER TAXES. All transfer, transfer gains, documentary,
sales, use, stamp, registration and other similar Taxes and fees (including
costs and expenses relating to such Taxes) incurred in connection with the
consummation of the transactions contemplated by this Indenture shall be borne
by Holdings. The Holders shall reasonably cooperate with Holdings in the
preparation and filing of any such Tax Returns and other documentation.
SECTION 4.06. COMPLIANCE CERTIFICATE. Holdings shall deliver to the
Trustee within 120 days after the end of each fiscal year of Holdings an
Officers' Certificate made on behalf of Holdings stating that in the course of
the performance by the signers of their duties as officers of Holdings they
would normally have knowledge of any Default and whether or not the signers know
of any Default that occurred during such period. If they do, the certificate
shall describe the Default, its status and what action Holdings is taking or
proposes to take with respect thereto. Holdings also shall comply with Section
314(a)(4) of the TIA.
SECTION 4.07. COMPLIANCE WITH LAW. Holdings will, and will cause each of
its Subsidiaries to, comply with all Applicable Laws and will obtain and
maintain, and will cause each of its Subsidiaries to obtain and maintain, all
Permits necessary to the ownership of their respective properties or to the
conduct of their respective businesses, in each case to the extent necessary to
ensure that any such non-compliance with Applicable Law or any failure to obtain
or maintain such Permits, individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect.
SECTION 4.08. INSURANCE. Holdings shall cause its Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and business against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities engaged
in a similar businesses.
SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, Holdings shall
make an offer (a "CHANGE OF CONTROL OFFER") to each Holder to repurchase all or
any part (equal to $1,000 or a multiple thereof) of each Holder's Notes at an
offer price in cash equal to 101% of the outstanding principal amount thereof,
plus accrued and unpaid interest thereon, if any, until the Change of Control
Payment Date (the "CHANGE OF CONTROL PAYMENT") in accordance with the terms set
forth below. Holdings shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws
Page 30
and regulations are applicable in connection with the repurchase of the Notes as
a result of a Change of Control, and Holdings shall not be in violation of this
Indenture by reason of any act required by such rule or other applicable law.
(b) Within 30 days following any Change of Control, Holdings
shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this SECTION 4.09 and that all Notes tendered will be
accepted for payment;
(ii) the purchase price and the purchase date, which shall
be at least 10 Business Days but no more than 60 days from the date on
which the Company mails notice of the Change of Control (the "CHANGE OF
CONTROL PAYMENT DATE");
(iii) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer shall be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying Agent for such
purpose, at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control
Payment Date;
(iv) that Holders will be entitled to withdraw their
election if Holdings or its designated agent for such purpose, receives,
not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have the Notes
purchased; and
(v) other information required to be included pursuant to
SECTION 3.03.
(c) On the Change of Control Payment Date, Holdings shall, to the
extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer and (ii) pay to the Holders of
Notes or portions thereof so tendered an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered. Holdings shall
promptly mail or deliver by wire transfer to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and Holdings shall promptly
execute and mail (or cause to be transferred by book-entry) to each Holder a new
Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; PROVIDED, HOWEVER, that each such new Note shall be in a
principal amount of $1,000 or a multiple thereof. Holdings shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(d) Holdings shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in a manner, at the times and otherwise in compliance with the
requirements set forth in this SECTION 4.09 and such third party purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
Page 31
SECTION 4.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to SECTION 5.05, Holdings shall
be required to commence an offer to all Holders to purchase Notes (an "ASSET
SALE OFFER"), it shall follow the procedures specified in this SECTION 4.10.
Each Asset Sale Offer shall remain open for not less than ten (10) Business Days
nor more than sixty (60) days immediately following its commencement, except to
the extent that a longer period is required by Applicable Law (the "OFFER
PERIOD"). On the Business Day immediately after the termination of the Offer
Period (the "PURCHASE DATE"), Holdings shall purchase the principal amount of
Notes required to be purchased pursuant to SECTION 5.05 plus accrued and unpaid
interest, if any, thereon to the Purchase Date (the "OFFER AMOUNT") or, if less
than the Offer Amount has been tendered, Holdings shall purchase all Notes
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased
shall be made in the same manner as interest payments are made.
(b) Upon the commencement of an Asset Sale Offer, Holdings shall
send, by first class mail, a notice to each of the Holders which shall contain
all instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all
Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall
state:
(i) that the Asset Sale Offer is being made pursuant to
this SECTION 4.10 and SECTION 5.05 and the length of time the Asset Sale
Offer shall remain open;
(ii) the Offer Amount, the purchase price and the
Purchase Date;
(iii) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed to Holdings at the address specified in
the notice at least three Business Days before the Purchase Date;
(iv) that Holders shall be entitled to withdraw their
election if Holdings receives, not later than the second Business Day
prior to 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 Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased; and
(v) other information required to be included pursuant to
SECTION 3.03.
(c) On or before the Purchase Date, Holdings shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Holders and the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by
Holdings in accordance with the terms of this SECTION 4.10. Holdings shall
promptly (but in any case not later than five (5) Business Days after the
Purchase Date) mail or deliver by wire transfer to each
Page 32
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by Holdings for purchase, and Holdings shall promptly
issue a new Note and deliver it to such Holder, in a principal amount at
maturity equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by Holdings to the Holder
thereof.
SECTION 4.11. FURTHER ASSURANCES. Holdings shall, upon the request of
Holders, execute and deliver such further instruments and do such further acts
as may be reasonably necessary or proper to carry out more effectively the
provisions of this Indenture.
ARTICLE 5.
NEGATIVE COVENANTS APPLICABLE TO HOLDINGS AND ITS SUBSIDIARIES
SECTION 5.01. STAY, EXTENSION AND USURY LAWS. Holdings covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of its obligations
under the Notes or this Indenture, and Holdings (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants (to the extent that it may lawfully do so) that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Holders, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
SECTION 5.02. RESTRICTED PAYMENTS. (a) Holdings shall not, and shall not
permit any of its Subsidiaries to, (i) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of Capital Stock or other
Equity Interests of, including any payment in connection with a merger or
consolidation involving Holdings or any of its Subsidiaries, (ii) purchase,
redeem or otherwise acquire for value any shares of Capital Stock or other
Equity Interests of Holdings or any of its Subsidiaries now or hereafter
outstanding, (iii) make any payment or prepayment of principal of, premium, if
any, interest, redemption, exchange, purchase, retirement, defeasance, sinking
fund or other payment with respect to, any Subordinated Indebtedness or (iv)
make any Restricted Investments (the items described in CLAUSES (I), (II),
(III), and (IV) are referred to as "RESTRICTED PAYMENTS"); except that the
Company or any Subsidiary of the Company may make a Restricted Payment not
involving any dividend or other distribution on, or repurchase or redemption of,
Capital Stock of Holdings if at the time of and after giving effect to such
Restricted Payment;
(A) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence
thereof; and
(B) the Company would, at the time such Restricted
Payment was made and after giving pro forma effect thereto as if
such Restricted Payment had been made at the beginning of the
applicable four-Fiscal Quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the
Coverage Ratio Test set forth in SECTION 5.04(A) hereof; and
Page 33
(C) such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the Company
and its Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by the next succeeding paragraph),
is less than the sum of (1) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period) from
the beginning of the first Fiscal Quarter commencing after the
date of this Indenture 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 (2) 100% of the aggregate net cash
proceeds received by the Company from contributions of capital
from Holdings to the Company since the date of this Indenture or
the issue or sale since the date of this Indenture of Equity
Interests of the Company or of debt securities of the Company
that have been converted into such Equity Interests (other than
Equity Interests (or convertible debt securities) sold to a
Subsidiary of the Company and other than Disqualified Capital
Stock or debt securities that have been converted into
Disqualified Capital Stock), plus (3) to the extent that any
Restricted Investment that was made after the date of this
Indenture is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (x) the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if
any) and (y) the initial amount of such Restricted Investment.
(b) The foregoing provisions shall not prohibit any of the
following if no Default or Event of Default shall have occurred and be
continuing immediately after any such transaction:
(i) the defeasance, redemption or repurchase of
Subordinated Indebtedness with the net cash proceeds from an incurrence
of Permitted Refinancing Indebtedness or the substantially concurrent
sale (other than to a Subsidiary of Holdings) of Capital Stock of
Holdings (other than Disqualified Capital Stock); provided, however,
that the amount of any such net cash proceeds from the sale of Capital
Stock of Holdings that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (C)(2) of
the preceding paragraph;
(ii) the consummation of the Merger (including the making
of Restricted Payments from the Company to Holdings to allow Holdings to
make Restricted Payments necessary to consummate the Merger or prepay
Indebtedness as to which Holdings is an obligor, and further including
Holdings and/or the Company making (or Company making Restricted
Payments to Holdings to allow Holdings to make) payments on all (A)
Indebtedness of Holdings and its Subsidiaries existing prior to the
Closing Date (including any thereof constituting Subordinated
Indebtedness), and (B) noncompete payments to senior officers of
Holdings and the Company, payments in connection with termination of
employment contracts, payments of stay or retention bonuses, and
deferred payments on restricted Capital Stock of Holdings held by
certain employees of Holdings and the Company in connection therewith,
to the extent the same
Page 34
have been disclosed to the Purchasers pursuant to Schedule 1(q) of the
Purchase Agreement;
(iii) the repurchase, redemption or other acquisition or
retirement for value by Holdings of (and the making of Restricted
Payments by the Company to Holdings to permit Holdings to repurchase,
redeem, acquire or retire for value) any Equity Interests of Holdings
held by Management Investors and their Related Parties; provided,
however, that, at the time of such Restricted Payment and after giving
effect thereto, the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests in the current Fiscal
Year shall not exceed $1,500,000 plus the unused portion of said
$1,500,000 from the immediately preceding Fiscal Year plus the aggregate
cash proceeds received by Holdings during such Fiscal Year from any
issuance or reissuance of Equity Interests of Holdings to Management
Investors and their Related Parties plus any proceeds received during
such Fiscal Year under key man insurance policies with respect to such
Management Investors; and PROVIDED, FURTHER, that any such aggregate
cash proceeds from any such issuance or reissuance of Equity Interests
shall, to the extent actually used to repurchase other Equity Interests
of Holdings, be excluded from clause (C)(2) of the preceding paragraph;
(iv) the redemption, repurchase or other acquisition or
retirement for value by the Company or any Subsidiary of the Company of
any Capital Stock of a Permitted Partially Owned Subsidiary owned by a
licensed veterinarian (or professional veterinary corporation) whose
employment by the Company or any Subsidiary has terminated, provided the
consideration paid does not exceed the fair market value of such Capital
Stock as determined by the Board of Directors in good faith and all
Indebtedness owed by such veterinarian or professional corporation to
Holdings and its Subsidiaries is repaid in full concurrently with such
redemption or repurchase;
(v) the payment by any Subsidiary of Holdings of any
distribution or dividend on its Capital Stock or the redemption or
repurchase by any Subsidiary of the Company of its Capital Stock to the
extent the proceeds thereof or any property transferred pursuant thereto
are paid pro rata to holders of such Capital Stock;
(vi) the making by Holdings or the Company of regularly
scheduled payments in respect of any Subordinated Indebtedness permitted
hereby in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, any
agreement pursuant to which such Subordinated Indebtedness was issued,
so long as no Event of Default described in SECTION 7.01 has occurred or
is continuing or will result therefrom, provided that in the event that
any Restricted Payment otherwise permitted under this clause (vi) is not
permitted to be made because of such Events of Default, such Restricted
Payment shall accrue and may be paid upon the waiver or cure of the
applicable Event of Default so long as no other Event of Default
described in SECTION 7.01 has occurred and is continuing or will result
therefrom.
Page 35
(vii) the making by the Company of Restricted Payments to
Holdings to allow Holdings to make regularly scheduled payments (but not
voluntary prepayments and not cash interest payments if Holdings is
allowed to make payment of interest in PIK Notes) in respect of the
Notes, Seller Notes, Earn-Out Obligations and to allow Holdings to make
payments permitted under clause (vi) immediately preceding;
(viii) the making by the Company of Restricted Payments to
Holdings to allow Holdings to pay reasonable general administrative
costs and expenses, to pay consolidated Tax liabilities of Holdings and
its Subsidiaries, to pay obligations of Holdings due after the Closing
Date under any Transaction Documents (as defined in the Purchase
Agreement) to which Holdings is a party and to pay obligations of
Holdings after the Closing Date with respect to any obligation of
Holdings prior to the Asset Dropdown (as defined in the Purchase
Agreement) which remain obligations of Holdings as a matter of law, and
to pay amounts to Affiliates of Holdings which Holdings is permitted to
pay under the provisions of SECTION 5.06 hereof;
(ix) the making by the Company and its Subsidiaries of
Permitted Acquisitions;
(x) the making by the Company and its Subsidiaries of
loans or advances to veterinarians (or professional corporations owned
by such veterinarians) substantially involved in the business of a
Subsidiary of the Company to allow such veterinarians (or such
professional corporations) to acquire Capital Stock of such Subsidiary,
so long as such Subsidiary remains a Permitted Partially Owned
Subsidiary after such acquisition of its Capital Stock; and
(xi) the making by the Company and its Subsidiaries of
other Restricted Payments not to exceed $5.0 million in the aggregate
since the date of this Indenture.
(c) The amount of all Restricted Payments (other than cash) shall
be the fair market value (evidenced by a resolution of the Board of Directors
set forth in an Officers' Certificate delivered to the Trustee) on the date of
the Restricted Payment of the asset(s) proposed to be transferred by Holdings or
such Subsidiary, as the case may be, pursuant to the Restricted Payment.
SECTION 5.03. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Holdings shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
of Holdings to (a)(i) pay dividends pro rata or make any other distributions pro
rata with respect to any Capital Stock of such Subsidiary or any other interest
or participation in, or measured by, such Subsidiary's profits, or (ii) pay any
Indebtedness owed by such Subsidiary to Holdings or any of Holdings' other
Subsidiaries, (b) make loans or advances to Holdings or any of Holdings'
Subsidiaries or (c) transfer any of such Subsidiary's properties or assets pro
rata to Holdings or any of Holdings' Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (i) Existing Indebtedness as in
effect on the date of this
Page 36
Indenture, (ii) the Credit Documents as in effect as of the date of this
Indenture, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or Refinancings thereof permitted
hereunder, PROVIDED, HOWEVER, that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or Refinancings are
not materially more restrictive with respect to such provisions than those
contained in the Credit Documents on the date hereof, (iii) the Company
Indenture and the Company Notes as in effect as of the date of this Indenture,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or Refinancings thereof, (iv) this
Indenture and the Notes, (v) applicable law, (vi) by reason of customary
non-assignment provisions in leases, licenses and other agreements entered into
in the Ordinary Course of Business and consistent with past practices, (vii)
capital leases or purchase money obligations for property acquired in the
Ordinary Course of Business that impose restrictions of the nature described in
clause (vi) above on the property so acquired, (viii) Permitted Refinancing
Indebtedness; PROVIDED, HOWEVER, that such restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially
more restrictive than those contained in the agreements governing the
Indebtedness being Refinanced, (ix) any instrument governing Indebtedness,
Capital Stock or assets of a Person acquired by any of Holdings' Subsidiaries as
in effect at the time of such acquisition (except to the extent such instrument
was created or such Indebtedness was Incurred 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, PROVIDED that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be Incurred, (x) secured Indebtedness otherwise permitted to
be Incurred pursuant to this Indenture that limits the right of the debtor
thereunder to dispose of the assets securing such Indebtedness, (xi) contracts
for the sale of assets, including without limitation customary restrictions with
respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, (xii) restrictions on deposits or minimum net worth
requirements imposed by customers under contracts entered into in the Ordinary
Course of Business, (xiii) customary provisions in joint venture agreements,
licenses and leases and other similar agreements entered into in the Ordinary
Course of Business; and (xiv) statutory or contractual provisions requiring pro
rata treatment of holders of Capital Stock of Subsidiaries constituting
Permitted Partially Owned Subsidiaries.
SECTION 5.04. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED
CAPITAL STOCK OR PREFERRED STOCK
(a) Holdings shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee
or otherwise become directly or indirectly liable, contingently or otherwise
(including any operation of law), with respect to (collectively, "INCUR") any
Indebtedness (including Acquired Indebtedness) and Holdings shall not issue any
Disqualified Capital Stock and shall not permit any of its Subsidiaries to issue
any Preferred Stock; provided, however, that the Company and its Subsidiaries
may Incur Indebtedness (including Acquired Indebtedness), and the Company and
the Company Guarantors may guarantee such Indebtedness, if immediately after the
Incurrence of such Indebtedness, the
Page 37
Consolidated Interest Coverage Ratio for the most recent four full fiscal
quarter period exceeds 1.50 to 1.00 if such Incurrence is prior to September 30,
2002 and exceeds 1.75 to 1.00 if such Incurrence occurs thereafter (the test set
forth in the foregoing clause is referred to herein as "COVERAGE RATIO TEST").
For the purpose of the Coverage Ratio Test, with respect to any period during
which a Permitted Acquisition or an Asset Disposition has occurred (each a
"SUBJECT TRANSACTION"), Consolidated EBITDA and the components of Consolidated
Interest Expense shall be calculated with respect to such period on a pro forma
basis (including pro forma adjustments arising out of events which are directly
attributable to a specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis which
is consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Commission, which would include cost
savings resulting from head count reduction, closure of facilities and similar
restructuring charges which pro forma adjustments shall be certified on behalf
of Holdings by the chief financial officer of Holdings) using the historical
financial statements of any business so acquired or to be acquired or sold or to
be sold and the consolidated financial statements of Holdings and its
Subsidiaries which shall be reformulated as if such Subject Transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding revolving loans under the Credit Agreement
Incurred during such period); provided, however, such calculations of
Consolidated Adjusted EBITDA with respect to Permitted Acquisitions, the
consideration for which constitutes $3,000,000 or less, shall be based on
reasonable estimations of such pre-acquisition EBITDA based on actual
pre-acquisition revenues.
(b) The foregoing provisions shall not apply to:
(i) the Incurrence by Holdings and its Subsidiaries of the
Existing Indebtedness and the issuances by Holdings of Junior Preferred
Stock and Senior Preferred Stock as contemplated by the Purchase
Agreement;
(ii) the Incurrence by (x) the Company and its
Subsidiaries of the Indebtedness represented by the Company Notes and
the Guarantees thereof or the Exchange Notes and the Exchange Guarantees
(as defined in the Company Indenture) thereof, as the case may be, and
(y) Holdings of the Indebtedness represented by the Notes (including any
PIK Notes);
(iii) the Incurrence by the Company or any of its
Subsidiaries of (x) Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money Indebtedness, in each
case, Incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Subsidiary, or
(y) Acquired Indebtedness Incurred in connection with a Permitted
Acquisition provided such Indebtedness was not Incurred in connection
with or in contemplation of such Permitted Acquisition, in an aggregate
principal amount not to exceed (without duplication)
Page 38
$15,000,000 at any one time outstanding; provided that all or a
portion of the Indebtedness permitted to be incurred under this clause
(iii) may, at the option of the Company, without limitation as to
purpose, be incurred under the Credit Agreement instead of pursuant to
Capitalized Lease Obligations, mortgage financing or purchase money
Indebtedness;
(iv) the Incurrence by Holdings or any of its Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to extend, Refinance, renew, replace, defease
or refund, Indebtedness that was permitted by this Indenture to be
Incurred by Holdings or such Subsidiary;
(v) the Incurrence by the Company or any of its
Subsidiaries of intercompany Indebtedness between or among the Company
and any Restricted Subsidiaries of the Company that (except for
Permitted Partially Owned Subsidiaries) are Company Guarantors;
provided, however, that (1) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company, a Restricted Subsidiary of the Company
that (except for Permitted Partially Owned Subsidiaries) is a Company
Guarantor, and (2) any sale or other transfer of any such Indebtedness
to a Person other than the Company, a Restricted Subsidiary of the
Company that (except for Permitted Partially Owned Subsidiaries) is a
Company Guarantor, or a lender or agent upon exercise of remedies under
a pledge of such Indebtedness under the Credit Documents, shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness
by the Company or such Subsidiary, as the case may be;
(vi) the Incurrence by the Company or any of its
Subsidiaries of Interest Swap Obligations that are Incurred for the
purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding;
(vii) the Incurrence by the Company and its Subsidiaries
of Indebtedness evidenced by the Credit Documents (and the Guarantees
thereof by Holdings and the Company's Subsidiaries) less the amount of
all term loan repayments and permanent reductions actually made under
the Credit Agreement with the Net Proceeds of an Asset Disposition
applied thereto to the extent required by SECTION 5.05; provided that
the amount of Indebtedness permitted to be Incurred pursuant to the
Credit Agreement in accordance with this clause (vii) shall be in
addition to any Indebtedness permitted to be incurred pursuant to the
Credit Agreement in reliance on and in accordance with SECTION 5.04(A)
above, with clause (iii) above and clause (xiv) below, and with clause
(z) in the definition of Credit Agreement;
(viii) The Incurrence by the Company or any of its
Subsidiaries of Indebtedness under Currency Agreements;
(ix) The Incurrence by Holdings or any of its Subsidiaries
of Indebtedness arising from the honoring by a bank or other financial
institution of a check,
Page 39
draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the Ordinary
Course of Business;
(x) The Incurrence by the Company or any of its
Subsidiaries of Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the Ordinary Course of
Business;
(xi) Incurrence by Holdings of Earn-Out Obligations and of
Indebtedness with respect to Seller Notes in an aggregate principal
amount not to exceed $30,000,000 at any one time outstanding, provided
all of such Seller Notes and Earn-Out Obligations (other than up to $7.5
million of such Earn-Out Obligations at any one time outstanding) are
subordinated to Holdings' guarantee of Indebtedness under the Credit
Agreement on terms no less favorable to the holders of such Indebtedness
under the Credit Agreement than provided in Exhibit K to the Credit
Agreement on the Closing Date;
(xii) The Incurrence by Holdings or any of its
Subsidiaries of Indebtedness in respect of performance bonds, bankers'
acceptances, workers' compensation claims, surety or appeal bonds,
payment obligations in connection with self-insurance or similar
obligations Incurred in the Ordinary Course of Business;
(xiii) the Guarantee by the Company or any of its
Subsidiaries of Indebtedness of the Company or a Subsidiary of the
Company that was permitted to be Incurred by another provision of this
SECTION 5.04 and the Guarantee by Holdings of Indebtedness under the
Credit Documents;
(xiv) the Incurrence by the Company or any of its
Subsidiaries of Indebtedness (in addition to Indebtedness permitted by
any other clause of this paragraph) in an aggregate principal amount at
any time outstanding not to exceed $15,000,000; PROVIDED that all or a
portion of the Indebtedness permitted to be Incurred pursuant to this
clause (xiv) may, at the option of the Company, be Incurred under the
Credit Agreement;
(xv) Indebtedness arising from agreements of the Company
or a Subsidiary of the Company providing for indemnification, adjustment
of purchase price or similar obligations, in each case, Incurred in
connection with an Asset Disposition permitted by this Indenture or a
Permitted Acquisition or other sale or disposition of assets permitted
under this Indenture;
(xvi) Indebtedness arising from agreements of Holdings or
a Subsidiary of Holdings (including the Stockholders Agreement, the
Exchange and Registration Rights Agreement, and similar contractual
undertakings) providing for indemnification and payment of expenses
relating to the registration under the Securities Act of the sale of
Capital Stock of Holdings or the Notes or the Company Notes;
Page 40
(xvii) the Incurrence by Holdings of Subordinated
Indebtedness as a result of a repurchase from employees of Holdings and
its Subsidiaries of Capital Stock of Holdings permitted by SECTION
5.02(B)(III) hereof;
(xviii)the Incurrence by Holdings of Indebtedness
constituting Restricted Payments to or Permitted Investments in Holdings
permitted to be made hereunder by the Company and its Subsidiaries;
(xix) the Incurrence of Indebtedness by Holdings as a
result of its indemnification obligations permitted pursuant to
SECTION 5.06(C) and SECTION 5.06(d); and
(xx) Incurrence by the Company or any Subsidiaries of the
Company of Indebtedness in connection with repurchases or redemptions of
minority interests in Permitted Partially Owned Subsidiaries permitted
by SECTION 5.02(B)(IV) hereof, in an aggregate principal amount at any
time outstanding not to exceed $5,000,000.
(c) For purposes of determining compliance with this SECTION
5.04, in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Indebtedness described in clauses (i) through (xx) of
the immediately preceding paragraph or is entitled to be Incurred pursuant to
the Coverage Ratio Test set forth above, Holdings shall, in its sole discretion,
classify (or later reclassify) such item of Indebtedness in any manner that
complies with SECTION 5.04(B) and will only be required to include the amount
and type of such Indebtedness in one of such clauses of SECTION 5.04(B) or
pursuant to SECTION 5.04(A). Accrual of interest, accretion of accreted value,
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms as the
Indebtedness on which such interest is being paid and any other issuance of
securities paid-in-kind shall not be deemed to be an Incurrence of Indebtedness
for purposes of SECTION 5.04. In addition, Holdings may, at any time, change the
classification of an item of Indebtedness (or any portion thereof) to any other
clause of SECTION 5.04(B) or to Indebtedness properly incurred under SECTION
5.04(A) PROVIDED that Holdings would be permitted to Incur such item of
Indebtedness (or portion thereof) pursuant to such other clause of this SECTION
5.04(B) or SECTION 5.04(A), as the case may be, at such time of
reclassification.
SECTION 5.05. ASSET DISPOSITIONS.
(a) Holdings shall not, and shall not permit any of its
Subsidiaries to, consummate any Asset Disposition (PROVIDED that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of Holdings and its Subsidiaries taken as a whole shall be governed by the
provisions of SECTION 4.03 and/or ARTICLE 6 and not by the provisions of this
SECTION 5.05) unless all of the following conditions are met: (i) at any time
prior to a Note Registration, the aggregate fair market value of assets
(exclusive of (x) the Specified Assets, (y) any assets subject to a Sale and
Leaseback Transaction permitted hereunder and (z) assets involuntarily disposed
of in an insured loss or as a result of a condemnation proceeding) sold or
otherwise disposed of in any fiscal year of Holdings does not exceed 20% of
Consolidated
Page 41
Tangible Assets at the beginning of the fiscal year; (ii) the consideration
received is at least equal to the fair market value of such assets (except as
the result of any foreclosure or sale by the lenders under the Credit
Documents); (iii) at least 80% of the consideration received is cash; and (iv)
no Default or Event of Default then exists or shall result from such Asset
Disposition; PROVIDED, HOWEVER, that the amount of (x) any liabilities (as shown
on Holdings' or such Subsidiary's most recent balance sheet) of Holdings or any
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes) that are assumed by the transferee of any such
assets pursuant to any arrangement releasing Holdings or such Subsidiary from
further liability and (y) any securities, notes or other obligations received by
Holdings or any such Subsidiary from such transferee that are converted by
Holdings or such Subsidiary into cash or Cash Equivalents within 90 days after
the Asset Sale (to the extent of the cash received), shall be deemed to be cash
for purposes of this provision.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Disposition, Holdings or the Subsidiary making such Asset Disposition, as
the case may be, may apply such Net Proceeds (i) to permanently reduce Senior
Indebtedness or Guarantor Senior Indebtedness, or to purchase the Company Notes
or the Notes (with the consent of the Holders thereof to the extent required) or
Indebtedness ranking PARI PASSU with the Notes (and to correspondingly reduce
commitments with respect thereto) or (ii) to the acquisition of a controlling
interest in another business, the making of Capital Expenditures or the
investment in or acquisition of other long-term assets, in each case, in the
same or a similar line of business as Holdings and its Subsidiaries engaged in
at the time such assets were sold or in a business reasonably related,
complementing or ancillary thereto or a reasonable expansion thereof. Pending
the final application of any such Net Proceeds, the Company may temporarily
reduce revolving credit Indebtedness under the Credit Agreement or otherwise
invest such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the first sentence of this paragraph shall be deemed to constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds in any fiscal
year $5,000,000, Holdings shall make an Asset Sale Offer pursuant to SECTION
4.10 to purchase the maximum principal amount of Notes that may be purchased out
of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the outstanding principal amount thereof, plus accrued and unpaid interest,
thereon to the date of purchase, in accordance with the procedures set forth in
SECTION 4.10. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds,
Holdings may use any remaining Excess Proceeds for general corporate purposes.
If the aggregate principal amount of Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, Holdings shall select the Notes 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. To the extent that the
provisions of any securities laws or regulations conflict with the provision so
of this Indenture relating to such Asset Sale Offer, Holdings shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.
Page 42
SECTION 5.06. TRANSACTIONS WITH AFFILIATES. Holdings will not and will
not permit any of its Subsidiaries directly or indirectly to enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any management, consulting, investment
banking, advisory or other similar services) with any Affiliate of Holdings or
with any director, officer or employee of Holdings or any Subsidiary (each of
the foregoing, an "AFFILIATE TRANSACTION"), except:
(a) the performance of any of the Transaction Documents as in
effect as of the date of this Indenture or the consummation of any transaction
contemplated thereby (including pursuant to any amendment thereto so long as any
such amendment is not disadvantageous to the Holders of the Notes in any
material respect);
(b) transactions (i) in the ordinary course of and pursuant to
the reasonable requirements of the business of Holdings or any of its
Subsidiaries and upon fair and reasonable terms which are not materially less
favorable to Holdings or such Subsidiary than would be obtained in a comparable
arm's length transaction with a Person that is not an Affiliate of Holdings and
(ii) Holdings delivers to the Trustee (A) with respect to any Affiliate
Transaction involving aggregate consideration in excess of $1,000,000, a
resolution of the Board of Directors of Holdings set forth in an Officers'
Certificate certifying that such Affiliate transaction complies with clause (i)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors of Holdings, and (B) with
respect to any Affiliate Transaction or series of Affiliate Transactions
involving in excess of $5,000,000, an opinion as to the fairness of such
Affiliate Transaction to Holdings from a financial point of view issued by an
investment banking firm of national standing;
(c) payment of customary compensation to officers, employees,
consultants and investment bankers for services actually rendered to Holdings or
such Subsidiary, including indemnity;
(d) payment of director's fees plus expenses and customary
indemnification of directors;
(e) payment of (i) fees and other expenses to Xxxxxxx Xxxxx &
Partners, L.P. or other Affiliates of GEI pursuant to the Management Services
Agreement (or any agreement extending or replacing the Management Services
Agreement that contains the same terms with respect to fees and other terms no
less favorable to Holdings and its Subsidiaries), not to exceed, in any Fiscal
Year the sum of (x) 1.6% of capital invested in Holdings by Principals, (y)
normal and customary fees for financial advice and investment banking services
that may be undertaken on behalf of Holdings and the Company from time to time,
and (z) reimbursement of out-of-pocket costs and expenses; and (ii) a one-time
general services and structuring fee in connection with the closing of the
transactions contemplated in the Merger Agreement;
(f) the payment of the fees, expenses and other amounts payable
by Holdings and its Subsidiaries in connection with the transactions
contemplated by the Transaction Documents (including non-competition payments to
be made to senior officers of Holdings or
Page 43
the Company, disclosed to the Purchasers pursuant to the Purchase Agreement)
that were disclosed to the Purchasers on or prior to the Closing Date;
(g) transactions undertaken pursuant to the agreements set forth
on SCHEDULE 5.06, copies of which shall have been provided to the Purchasers
prior to the Closing Date;
(h) Restricted Payments permitted by SECTION 5.03 and
Permitted Investments;
(i) the payment of Earn-Out Obligations and payment on Seller
Notes pursuant to agreements entered into at such time as the recipient of such
payments was not an Affiliate of Holdings or its Subsidiaries;
(j) transactions between or among Holdings and/or its
Subsidiaries;
(k) sale of Capital Stock of Holdings to Affiliates of Holdings
not otherwise prohibited by this Indenture and the redemption or repurchase of
Capital Stock of Holdings from Affiliates who are Management Investors to the
extent permitted by SECTION 5.02(B)(III), and the sale of Capital Stock of
Subsidiaries to the extent that a Permitted Partially Owned Subsidiary results
therefrom, and the redemption or repurchase from Affiliates of such Subsidiaries
of minority interests in Permitted Partially Owned Subsidiaries; and
(l) the issuance of payments, awards or grants, in cash or
otherwise, pursuant to, or the funding of, employment arrangements approved by
the Board of Directors of Holdings in good faith and customary loans and
advances to employees of Holdings, or any Subsidiary of Holdings to the extent
otherwise permitted in this Indenture.
Notwithstanding the foregoing, unless otherwise approved by the Required
Holders, no payments may be made with respect to the management fees and
expenses described in SECTION 5.06(E)(I)(X) after the Required Holders have
provided written notice to GEI of the occurrence and continuance of an Event of
Default under SECTION 7.01(A), SECTION 7.01(B) or SECTION 7.01(G) or, prior to
Note Registration, an Event of Default caused by the failure of Holdings to
comply with the covenants and agreements set forth in Section 9 of the Purchase
Agreement; PROVIDED such management fees may continue to accrue following such
notice and be payable (notwithstanding any maximum amount of payments otherwise
applicable to the Fiscal Year in which such deferred payment is actually made)
once such Event of Default is cured, waived or rescinded.
SECTION 5.07. LIMITATION ON LIENS. Holdings shall not directly or
indirectly, create, incur, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired to secure any Indebtedness of Holdings, except for
Liens securing the guaranty by Holdings of Indebtedness Incurred under the
Credit Documents and Permitted Liens.
SECTION 5.08. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
SUBSIDIARIES. Holdings shall not permit the Company or any Subsidiary of the
Company to transfer, convey, sell, issue, lease or otherwise dispose of any
Capital Stock of any Person (other than to the Company or another Subsidiary of
the Company), unless (a) (i) such transfer, conveyance, sale,
Page 44
lease or other disposition is of all the Capital Stock of such Subsidiary and
(ii) the Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with the provisions of SECTION 5.05, or
(b) such transfer, conveyance, sale, issuance, lease or other disposition is to
a licensed veterinarian (or professional corporation owned by a licensed
veterinarian) in a transaction resulting in a Permitted Partially Owned
Subsidiary; PROVIDED, HOWEVER, that this SECTION 5.08 shall not restrict any
pledge of Capital Stock of the Company and its Subsidiaries securing
Indebtedness under the Credit Documents.
SECTION 5.09. SALES AND LEASEBACK TRANSACTIONS. Holdings shall not, and
shall not permit any of its Subsidiaries to, enter into any Sale and Leaseback
Transaction; PROVIDED, HOWEVER, that the Company and its Subsidiaries may (a)
enter into a Sale Leaseback Transaction if (i) the Company or such Subsidiary
could have (A) Incurred Indebtedness in an amount equal to the Attributable Debt
relating to such Sale and Leaseback Transaction pursuant to SECTION 5.04 and (B)
incurred a Lien to secure such Indebtedness pursuant to the provisions of
SECTION 5.07, (ii) the gross cash proceeds of such Sale and Leaseback
Transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors) of the property that is the subject of such
Sale and Leaseback Transaction and (iii) the transfer of assets in such Sale and
Leaseback Transaction is permitted by, and the Company or such Subsidiary
applies the proceeds of such transaction in compliance with, the provisions of
SECTION 5.05; and (b) enter into a Sale and Leaseback Transactions which are in
the ordinary course of the Company's or such Subsidiary's business consistent
with past practice and at market rates with respect to equipment acquired by the
Company and its Subsidiaries after the Closing Date if the proceeds of any such
Sale Leaseback shall be entirely in cash and shall not be less than 100% of the
fair market value of the equipment being sold (determined in good faith by the
Company, provided that at the time of and immediately after giving effect to any
such Sale and Leaseback Transaction, the aggregate fair market value of all
equipment so sold or disposed of in connection with such Sale and Leaseback
Transactions covered by this clause (b) shall not exceed an amount equal to
$7,500,000.
SECTION 5.10. CONDUCT OF BUSINESS. Holdings shall not and shall not
permit any of its Subsidiaries directly or indirectly to engage in any business
other than business of the type engaged in at the date hereof and any business
reasonably related, complementing or ancillary thereto or a reasonable expansion
thereof.
ARTICLE 6.
COVENANTS APPLICABLE TO HOLDINGS
Notwithstanding anything in this Indenture to the contrary:
SECTION 6.01. BUSINESS ACTIVITIES OF HOLDINGS. The sole business
activities of Holdings will be (i) the direct ownership of all the outstanding
shares of common stock of the Company and activities incidental thereto
(including, without limitation, the payment of Taxes and the retention of
accountants and auditors), (ii) the performance of obligations under the
Transaction Document to which it is a party, (iii) the performance of
obligations under Seller
Page 45
Notes and Earn-Out Obligations, (iv) the issuance of Holdings' Capital Stock and
activities incidental thereto, and (v) the making of Restricted Payments and
Permitted Investments, and the incurrence of Indebtedness and Permitted Liens,
in each case solely to the extent permitted by this Indenture.
SECTION 6.02. MERGER, CONSOLIDATION, OR SALES OF ASSETS OF HOLDINGS.
Holdings shall not consolidate or merge with or into (whether or not Holdings is
the surviving corporation), or directly and/or indirectly through its
Subsidiaries sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of the properties and assets of Holdings and its
Subsidiaries taken as a whole in one or more related transactions, to any other
Person, unless:
(a) the resulting, surviving or transferee Person (the "SUCCESSOR
COMPANY") shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and the
Successor Company (if not Holdings) shall expressly assume, by a supplemental
indenture hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of Holdings under the Notes and this Indenture;
(b) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor Company
or any Subsidiary as a result of such transaction as having been Incurred by the
Successor Company or such Subsidiary at the time of such transaction), no
Default shall have occurred and be continuing under this Indenture;
(c) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of Indebtedness
pursuant to the Coverage Ratio Test set forth in SECTION 5.04(A) of this
Indenture if it were deemed to be the Company thereunder;
(d) Holdings shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) are permitted by and
comply with this Indenture; and
(e) Holdings shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of such transaction 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 transaction had not occurred.
The Successor Company shall succeed to, and be substituted for, and may exercise
every right and power of, Holdings under this Indenture, but Holdings in the
case of a conveyance, transfer or lease of all or substantially all its assets
shall not be released from the obligation to pay the principal of and interest
on the Notes.
Page 46
ARTICLE 7.
EVENTS OF DEFAULT; REMEDIES
SECTION 7.01. EVENTS OF DEFAULT. An Event of Default shall exist upon
the occurrence of any of the following specified events (each an "EVENT OF
DEFAULT"):
(a) Holdings defaults in the payment when due of interest, if
any, on the Notes and such default continues for a period of either (i) ten (10)
days prior to a Note Registration or (ii) thirty (30) days thereafter;
(b) Holdings defaults in the payment when due of the principal
amount of or premium, if any, on the Notes when the same becomes due and payable
at its Maturity, upon redemption or otherwise;
(c) Holdings fails to observe or perform any other covenant or
other agreement in this Indenture, the Purchase Agreement or the Notes and such
failure continues for a period of thirty (30) days after any senior officer of
the Company has obtained actual knowledge of the same;
(d) any representation, warranty, certification or statement made
by Holdings in the Purchase Agreement and the related documents or in any
statement or certificate at any time given by or on behalf of Holdings in
writing pursuant to the Purchase Agreement or any other related documents shall
be false in any material respect on the date as of which made;
(e) a default occurs under any mortgage, indenture or agreement
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by Holdings or any of its
Subsidiaries (or payment of which is Guaranteed by Holdings or any of its
Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created
after the date of this Indenture (which default, other than in the case of
Subordinated Indebtedness, (i) constitutes a failure to pay at final maturity
(after giving effect to any applicable grace periods and any extensions thereof)
the principal amount of such Indebtedness or (ii) shall have resulted in such
Indebtedness being accelerated or otherwise become or being declared due and
payable prior to its stated maturity), and the principal amount of all such
Indebtedness as to which a default described in this paragraph (e) has occurred
aggregates $7,500,000 or more;
(f) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against Holdings or
any of its Subsidiaries and such judgment or judgments remain unpaid and
undischarged for a period (during which execution shall not be effectively
stayed) of 60 days, and is not adequately covered by insurance or indemnities
which have been cash collateralized, provided, however, that the aggregate
amount of all such undischarged or uninsured judgments exceeds $7,500,000;
(g) Holdings or any of its Subsidiaries:
Page 47
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of a decree or order for relief
against it in an involuntary case or proceeding or to the commencement
of any case or proceeding against it,
(iii) consents to the filing of a petition or to the
appointment of or taking possession by a Custodian (as defined below)
of it or for all or any substantial part of its property,
(iv) makes or consents to the making of a general
assignment for the benefit of its creditors,
(v) generally is not paying, or admits in writing that it
is not able to pay its debts as they become due, or
(vi) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against Holdings or any of its
Subsidiaries in an involuntary case or proceeding;
(B) appoints a Custodian of Holdings or any of its
Subsidiaries or for all or any substantial part of the
property of Holdings or any of its Subsidiaries or
approves as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of
or in respect of any of the foregoing; or
(C) orders the winding up or liquidation of
Holdings or any of its Subsidiaries or adjudges any of
them as bankrupt or insolvent;
and any such order or decree remains unstayed and in effect for sixty
(60) consecutive days;
provided, however, that, notwithstanding the foregoing, it shall not
constitute an Event of Default hereunder if any of the circumstances
described above in this Section 7.01(g) shall have occurred with respect
to one or more Subsidiaries of the Company; provided, further, however,
that such Subsidiary and all other similarly situated Subsidiaries shall
not have accounted for more than ten percent (10%) of the Company's
Consolidated EBITDA during the four-Fiscal Quarter period most recently
ended.
The term "CUSTODIAN" means any custodian, receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.
SECTION 7.02. ACCELERATION. If an Event of Default (other than an Event
of Default specified in SECTION 7.01(G) with respect to Holdings or the Company)
occurs and is continuing, the Trustee by notice to Holdings or the Holders of
(i) until a Note Registration, more than 50%
Page 48
in principal amount of the Notes at the time outstanding, and (ii) thereafter,
25% or more in principal amount of the then outstanding Notes, may declare the
principal of and accrued but unpaid interest and any Special Interest on all the
Notes to be due and payable; provided that so long as the Credit Agreement shall
be in force and effect, if an Event of Default (other than an Event of Default
specified in Section 7.01(g)) occurs and is continuing, any such acceleration
shall not be effective until the earlier to occur of (x) five (5) Business Days
following the delivery of a notice of such acceleration to the Representative
under the Credit Agreement and, if such acceleration is declared by the Holders,
to the Trustee and (y) the acceleration of any Indebtedness under the Credit
Agreement. Holdings shall give notice of any acceleration under clause (y) of
the preceding sentence to the Holders and the Trustee promptly upon its becoming
aware thereof. Upon such a declaration, such principal and interest will be due
and payable immediately. If an Event of Default specified in SECTION 7.01(G)
with respect to Holdings or the Company occurs, the principal of and interest on
all the Notes shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holders. The
Holders of a majority in principal amount at maturity of the outstanding Notes
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal of or
interest on Notes that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
In the interest of clarity and for the avoidance of doubt, if an
Event of Default under SECTION 7.01(E) shall have occurred, but the default
thereunder shall have been cured or waived, or any acceleration thereunder shall
have been rescinded, then such cure, waiver or rescission shall similarly and
automatically apply to the Event of Default under SECTION 7.01(E) hereof.
If an Event of Default has occurred and is continuing, the Notes
will accrue interest at 2% per annum plus the stated interest rate on the Notes,
until such time as no Event of Default shall be continuing (to the extent that
the payment of such interest shall be legally enforceable).
Holdings shall give prompt notice to the Trustee and the Holders
of the occurrence of any Event of Default and the rescission, cure or waiver of
any Event of Default.
SECTION 7.03. OTHER REMEDIES. Notwithstanding any other provision of
this Indenture, 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 Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding in its own name and as
trustee of an express trust even if it does not possess any of the Notes or does
not produce any of them in the proceeding. A delay or omission by the Trustee or
any Holder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of
Page 49
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 7.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount at maturity of the Notes by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of
principal of or interest on a Note, (b) a Default arising from the failure to
redeem or purchase any Note when required pursuant to the terms of this
Indenture or (c) a Default in respect of a provision that under SECTION 10.02
cannot be amended without the consent of each Holder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 7.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the outstanding Notes 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. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to SECTION 8.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders 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 7.06. LIMITATION ON SUITS. (a) Except to enforce the right to
receive payment of principal of or interest on the Notes when due, no Holder may
pursue any remedy with respect to this Indenture or the Notes unless:
(i) the Holder has previously given to the Trustee
written notice stating that an Event of Default has occurred and is
continuing;
(ii) the Holders of at least 25% in principal amount at
maturity of the outstanding Notes make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of security or
indemnity; and
(v) the Holders of a majority in principal amount at
maturity of the outstanding Notes do not give the Trustee a direction
inconsistent with the request during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights
of another Holder or to obtain a preference or priority over another Holder.
Page 50
SECTION 7.07. 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 any Special Interest and interest on the Notes held by such
Holder, on or after the respective due dates expressed or provided for in the
Notes, 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, it being understood that each Holder has consented to the subordination
of any Special Mandatory Redemption as provided in SECTION 7.12.
SECTION 7.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in SECTION 7.01(A) or (B) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
Holdings or any other obligor on the Notes for the whole amount then due and
owing (together with interest on overdue portion of the principal amount and (to
the extent lawful) on any unpaid interest at the rate provided for in the Notes)
and the amounts provided for in SECTION 8.07.
SECTION 7.09. 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 Holders allowed in
any judicial proceedings relative to Holdings or any Subsidiary, 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 8.07.
SECTION 7.10. PRIORITIES. If the Trustee collects any money or property
pursuant to this ARTICLE 7, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under SECTION 8.07;
SECOND: to Holders for amounts due and unpaid on the
Notes for principal and interest, ratably, and any Special Interest without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, any Special Interest and interest,
respectively; and
THIRD: to Holdings.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this SECTION 7.10. At least 15 days before such
record date, the Trustee shall mail to each Holder and Holdings a notice that
states the record date, the payment date and amount to be paid.
Page 51
SECTION 7.11. 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 7.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to SECTION 7.07 or a suit by Holders of
more than 10% in principal amount at maturity of the Notes.
SECTION 7.12. SUBORDINATION OF SPECIAL MANDATORY REDEMPTION. (a) Until
all Indebtedness under the Credit Documents has been finally paid in full, all
commitments thereunder have been terminated and any contingent Indebtedness
thereunder has been fully cash collateralized, any payment obligation or payment
arising from or in respect of a Special Mandatory Redemption shall be made only
to the extent that the making of such Special Mandatory Redemption has been
approved in writing by the holders of the Indebtedness under the Credit
Documents or their Representative, which approval may be granted or denied in
the sole and absolute discretion of such holders or Representative, and which
approval, if given, may be withdrawn by written notice to the Trustee at any
time prior to the date specified for the Special Mandatory Redemption. Each
Holder acknowledges by its acceptance of its Notes that any failure by the
Company to make any Special Mandatory Redemption shall not result in the
occurrence of a Default or an Event of Default, nor serve as a basis for
exercise of remedies consequent upon a Default or Event of Default or otherwise,
unless such holders of the Indebtedness under the Credit Agreement or such
Representative has given (and not withdrawn) its prior written approval to the
making of such Special Mandatory Redemption. Each Holder further agrees by its
acceptance of its Notes that it will not take any action inconsistent with the
rights of the holders of Indebtedness under the Credit Documents to receive
payment in full of any amounts owing under the Credit Documents prior to the
making of any Special Mandatory Redemption by the Company. The provisions of
this SECTION 7.12 apply only to a Special Mandatory Redemption and shall not be
construed to affect any other rights of the Holders under this Indenture.
(b) No right of any present or future holder of Indebtedness
under the Credit Documents to enforce the provisions of this SECTION 7.12 shall
be impaired by any act or failure to act by the Company, the Trustee, any Holder
or by the failure of any such holder of Indebtedness under the Credit Documents
to give any notices or take any actions contemplated by this Indenture or
otherwise. No provision of any waiver or supplemental indenture may affect in
any way the rights of the holders of Indebtedness under the Credit Documents
without the prior written consent of such holders or their Representative.
(c) In the event that, notwithstanding the foregoing, the Holders
of the Notes shall have received any Special Mandatory Redemption not permitted
by this Section 7.12, then and in such event such Special Mandatory Redemption
shall be paid over and delivered forthwith to the holders of Indebtedness under
the Credit Agreement in the same form received and, until so turned over, the
same shall be held in trust by the Trustee on behalf of the Holders, or by such
Holders, as the collateral of the holders of Indebtedness under the Credit
Documents. Only after
Page 52
the payment in full in cash or Cash Equivalents of all amounts due or to become
due on or in respect of Indebtedness under the Credit Documents and, unless the
holders of Indebtedness under the Credit Documents shall have the ability to
terminate such commitments, the termination of all commitments in respect
thereof, the Holders of the Notes shall be subrogated to the rights of the
Holders of Indebtedness under the Credit Documents to receive payments and
distributions of cash, property and securities applicable to such Indebtedness
until the amount of the Special Mandatory Redemption shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Indebtedness under the Credit Documents of any cash, property or securities to
which the Holders of the Notes or the Trustee on their behalf would be entitled
except for the provisions of this SECTION 7.12, and no payments pursuant to the
provisions of this SECTION 7.12 to the holders of Indebtedness under the Credit
Documents by Holders of the Notes or the Trustee on their behalf, shall, as
among the Company, its creditors other than holders of Indebtedness under the
Credit Documents and the Holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Special Mandatory
Redemption. Each Holder of a Note, by accepting such Note, acknowledges and
agrees that the provisions of this SECTION 7.12 are, and are intended to be, an
inducement and a consideration to each holder of any Indebtedness under the
Credit Documents, whether such Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Indebtedness, and such holder of such Indebtedness shall be deemed
conclusively to have relied on such provisions in acquiring and continuing to
hold, or in continuing to hold, such Indebtedness. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Indebtedness under the Credit
Documents and shall not be liable to any such holders if it shall mistakenly pay
over or distribute to Holders or the Company or any other Person, money or
assets to which any holders of Indebtedness of the Company under the Credit
Documents shall be entitled by virtue of this SECTION 7.12 or otherwise. The
provisions of this SECTION 7.12 (including the defined terms used herein) are
for the benefit of the holders of Indebtedness under the Credit Documents and
shall be enforceable by them directly against any Holder and may not be amended
without the consent of the Representative under the Credit Agreement or, in the
absence thereof, the holders holding the majority in principal amount of such
Indebtedness.
ARTICLE 8.
TRUSTEE
SECTION 8.01. 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.
(b) Except during the continuance of an Event of Default:
(i) 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
Page 53
(ii) 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:
(i) this paragraph does not limit the effect of
SECTION 8.01(B);
(ii) 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
(iii) 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 7.05.
(iv) 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.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to SECTIONS 8.01(A), 8.01(B) and 8.01(C).
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with Holdings.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall extend
to the Registrar, Notes Custodian, Paying Agent and an authenticating agent and
be subject to the provisions of this SECTION 8.01 and to the provisions of the
TIA.
SECTION 8.02. RIGHTS OF TRUSTEE. (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
the 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
the Officers' Certificate or Opinion of Counsel.
Page 54
(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 Notes 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 or as to whether or not an Event of
Default shall have occurred unless requested in writing to do so by the Holders
of not less than a majority in principal amount at maturity of the Notes 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 Holdings,
personally or by agent or attorney.
(g) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty unless so specified herein.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby.
SECTION 8.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with Holdings or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may
do the same with like rights. However, the Trustee must comply with SECTIONS
8.10 and 8.11.
SECTION 8.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity, priority or adequacy of this
Indenture, or the Notes, it shall not be accountable for Holdings' use of the
proceeds from the Notes, and it shall not be responsible for any statement of
Holdings in this Indenture or in any document issued in connection with the sale
of the Notes or in the Notes other than the Trustee's certificate of
authentication. The Trustee shall not be responsible for any conduct or omission
by Holdings or the occurrence of any Event of Default.
Page 55
SECTION 8.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is actually known to the Trustee, the Trustee shall mail to each
Holder notice of the Default ("NOTICE OF DEFAULT") within 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 payment of principal of or interest on any
Note (including payments pursuant to the mandatory redemption provisions of such
Note, if any), the Trustee may withhold the notice if and so long as a committee
of its Trust Officers in good faith determines that withholding the notice is in
the interests of Holders. If a Notice of Default has been given to Holdings by
the Holders, a copy of such Notice of Default shall be delivered by Holdings to
the Trustee. Except as expressly provided herein, the Trustee shall not be bound
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein, in any other Transaction Document or
in any of the documents executed in connection with the Notes, or as to the
existence of a Default or Event of Default hereunder or thereunder, and may
assume that no such Default or Event of Default has occurred unless it has
actual knowledge or received written notice thereof.
SECTION 8.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as practicable
after each year beginning with the year 2001 following the date of this
Indenture, and in any event prior to February 1 in each year, the Trustee shall
mail (if required by Section 313(a) of the TIA) to each Holder a brief report
dated as of the preceding year that complies with Section 313(a) of the TIA. The
Trustee shall also comply with Section 313(b) of the TIA.
Following a Note Registration, a copy of each report at the time
of its mailing to Holders shall be filed with the Commission and each stock
exchange (if any) on which the Notes are listed. Holdings agrees to notify
promptly the Trustee whenever the Notes become listed on any stock exchange and
of any delisting thereof.
SECTION 8.07. COMPENSATION AND INDEMNITY. Holdings shall pay to the
Trustee from time to time reasonable and documented compensation for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. Holdings shall reimburse the
Trustee upon request for all reasonable and documented out-of-pocket 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. Holdings shall indemnify the Trustee against
any and all loss, liability or expense (including reasonable and documented
attorneys' fees) incurred by or in connection with the administration of this
trust and the performance of its duties hereunder. The Trustee shall notify
Holdings of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; PROVIDED, HOWEVER, that any failure so to notify
Holdings shall not relieve Holdings of its indemnity obligations hereunder.
Holdings shall defend the claim and the indemnified party shall provide
reasonable cooperation at Holdings' expense in the defense. Such indemnified
parties may have separate counsel and Holdings shall pay the fees and expenses
of such counsel; PROVIDED, HOWEVER, that Holdings 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 Holdings and such parties in connection with such defense. Holdings need
not reimburse any expense or indemnify against any loss, liability
Page 56
or expense incurred by an indemnified party through such party's own willful
misconduct or negligence.
To secure Holdings' payment obligations in this SECTION 8.07, the
Trustee shall have a lien prior to the Notes 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 Special Interest, if any, on particular Notes.
Holdings' obligations pursuant to this SECTION 8.07 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. Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses after the occurrence of a
Default specified in SECTION 7.01(G) with respect to Holdings or the Company,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
All indemnifications and releases from liability granted
hereunder to the Trustee shall extend to its officers, directors, employees,
agents, successors and assigns.
SECTION 8.08. REPLACEMENT OF TRUSTEE. (a) The Trustee may resign at any
time by so notifying Holdings in writing in accordance with the provisions of
SECTION 11.02. Any resignation of the Trustee shall be effective immediately
upon receipt by Holdings of such notice (unless such notice shall specify a
later time as the effective time of such resignation, in which case such later
time shall be the effective time), and the resignation of the Trustee shall not
prejudice any rights of the Trustee to receive any compensation, any
reimbursement of any expenses or any indemnity or right to being defended and
held harmless under this Indenture. The Holders of a majority in principal
amount at maturity of the Notes may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. Holdings shall remove the Trustee
if:
(i) the Trustee fails to comply with SECTION 8.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of
the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by Holdings or by the
Holders of a majority in principal amount at maturity of the Notes and such
Holders do not reasonably promptly 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), Holdings shall promptly appoint a
successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Holdings. Thereupon the resignation
or removal of the retiring
Page 57
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in SECTION 8.07.
(d) 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 10% in principal amount at maturity of the Notes may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with SECTION 8.10, unless the
Trustee's duty to resign is stayed as provided in TIA ss. 310(b), any Holder who
has been a bona fide Holder of a Note for at least six months may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to
this SECTION 8.08, Holdings' obligations under SECTION 8.07 shall continue for
the benefit of the retiring Trustee.
SECTION 8.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers or sells all or substantially all
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.
In case at the time such successor or successors by merger,
conversion, sale or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Notes 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 Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes 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 Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 8.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have, or in
the case of a corporation included in a bank holding company system, the related
bank holding company shall have, a combined capital and surplus of at least
$100.0 million as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss. 310(b), subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of Holdings are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Page 58
SECTION 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST HOLDINGS. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 9.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE. (a) When (i)
all outstanding Notes (other than Notes replaced or paid pursuant to SECTION
2.07) have been canceled or delivered to the Trustee for cancellation or (ii)
all outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to ARTICLE 3 hereof,
and Holdings irrevocably deposits with the Trustee funds in an amount
sufficient, or U.S. Government Obligations, the principal of and interest on
which will be sufficient, or a combination thereof sufficient, in the written
opinion of a nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), to pay the principal amount of
and interest on the outstanding Notes when due at maturity or upon redemption of
all outstanding Notes, including interest thereon to maturity or such Redemption
Date (other than Notes replaced or paid pursuant to SECTION 2.07), and Special
Interest, if any, and if in either case Holdings pays all other sums payable
hereunder by Holdings, then this Indenture shall, subject to SECTION 9.01(C),
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of Holdings accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of Holdings.
(b) Subject to SECTIONS 9.01(C) and 9.02, Holdings at any time
may terminate (i) all of its obligations under the Notes and this Indenture
("LEGAL DEFEASANCE OPTION") or (ii) its obligations under SECTIONS 5.02, 5.03,
5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 and 6.01, and the operation of 7.01(C),
7.01(D), 7.01(E), 7.01(F) and 7.01(G) ("COVENANT DEFEASANCE OPTION"). Holdings
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
If Holdings exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If Holdings
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in SECTION 7.01(C),
7.01(D), 7.01(E), 7.01(F) or 7.01(G).
Upon satisfaction of the conditions set forth herein and upon
request of Holdings, the Trustee shall acknowledge in writing the discharge of
those obligations that Holdings terminates.
(c) Notwithstanding clauses (a) and (b) above, Holdings'
obligations in SECTIONS 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 8.07, 8.08 and in
this ARTICLE 9 shall survive until the
Page 59
Notes have been paid in full. Thereafter, Holdings' obligations in SECTIONS
8.07, 9.04 and 9.05 shall survive.
SECTION 9.02. CONDITIONS TO DEFEASANCE.
(a) Holdings may exercise its legal defeasance option or its
covenant defeasance option only if:
(i) Holdings irrevocably deposits in trust with the
Trustee money in an amount sufficient, or U.S. Government Obligations
the principal of and interest on which will be sufficient, or a
combination thereof sufficient, to pay the principal of and interest on
the Notes when due at maturity or redemption, as the case may be,
including interest thereon to maturity or such Redemption Date and
Special Interest, if any;
(ii) Holdings delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest when
due on all the Notes to maturity or redemption, as the case may be;
(iii) the Company shall have delivered to the Trustee an
opinion of counsel to the effect that on the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(iv) Holdings delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(v) in the case of the legal defeasance option, Holdings
shall have delivered to the Trustee an Opinion of Counsel stating that
(1) Holdings has received from, or there has been published by, the
Internal Revenue Service a ruling, or (2) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(vi) in the case of the covenant defeasance option,
Holdings shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders 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; and
Page 60
(vii) Holdings delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Notes as contemplated
by this ARTICLE 9 have been complied with.
(b) Before or after a deposit, Holdings may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with ARTICLE 3.
SECTION 9.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
ARTICLE 9. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Notes.
SECTION 9.04. REPAYMENT TO HOLDINGS. The Trustee and the Paying Agent
shall promptly turn over to Holdings upon request any money or U.S. Government
Obligations held by it as provided in this ARTICLE 9 which, in the written
opinion of a nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this ARTICLE 9.
If money for the payment of principal of or interest on the Notes
has been deposited with the Trustee or Paying Agent and remains unclaimed for
two years after such amount is due and payable, the Trustee or Paying Agent
shall pay the money back to Holdings at its written request unless an abandoned
property law designates another Person. After any such payment, the Trustee and
the Paying Agent shall have no further liability for such funds and Holders
entitled to the money must look only to the recipient and not to the Trustee for
payment.
SECTION 9.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. Holdings shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 9.06. REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this ARTICLE 9
by reason of any legal proceeding or by reason of any order or judgment of any
court or Governmental Authority enjoining, restraining or otherwise prohibiting
such application, Holdings' obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
ARTICLE 9 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with this ARTICLE 9;
PROVIDED, HOWEVER, that, if Holdings has made any payment of interest on
principal of any Notes because of the reinstatement of its obligations, Holdings
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
Page 61
ARTICLE 10.
AMENDMENTS
SECTION 10.01. WITHOUT CONSENT OF HOLDERS.
(a) Holdings and the Trustee may amend this Indenture or the
Notes without notice to or consent of any Holder:
(i) to cure any ambiguity, omission, defect or
inconsistency;
(ii) to provide for uncertificated Notes in addition to or
in place of certificated Notes; PROVIDED, HOWEVER, that the
uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code;
(iii) to Guarantee the Notes;
(iv) to secure the Notes;
(v) to add to the covenants of Holdings for the benefit
of the Holders or to surrender any right or power herein conferred upon
Holdings;
(vi) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA;
(vii) to make any change that does not adversely affect
the rights of any Holder;
(viii) to provide for the issuance of the Exchange Notes,
which shall have terms substantially identical in all material respects
to the Initial Notes (except that the transfer restrictions contained in
the Initial Notes shall be modified or eliminated, as appropriate), and
which shall be treated, together with any Initial Notes and any PIK
Notes issued on the Initial Notes or the Exchange Notes that remain
outstanding, as a single issue of securities; or
(ix) to change the name or title of the Notes, and any
conforming changes related thereto.
(b) After an amendment under this SECTION 10.01 becomes
effective, Holdings shall mail to Holders a notice briefly describing such
amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
SECTION 10.01.
SECTION 10.02. WITH CONSENT OF HOLDERS. (a) Holdings and the Trustee may
amend this Indenture or the Notes without notice to any Holder but with the
written consent of the
Page 62
Holders of at least a majority in principal amount at maturity of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Notes). However, without the consent of each Holder affected,
an amendment may not:
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment;
(ii) reduce the rate of or extend the time for payment of
interest or any Special Interest on any Note;
(iii) reduce the principal amount of or extend the Stated
Maturity of any Note;
(iv) reduce the premium payable upon the redemption of any Note
or change the time at which any Note may be redeemed in accordance
with ARTICLE 3;
(v) make any Note payable in money other than that stated in the
Note;
(vi) impair the right of any holder to receive payment of
principal of and interest or any Special Interest on such Holder's
Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes;
or
(vii) make any change in SECTION 7.04 or 7.07 or the second
sentence of this SECTION 10.02.
It shall not be necessary for the consent of the Holders under
this SECTION 10.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
(b) After an amendment under this SECTION 10.02 becomes
effective, Holdings shall mail to Holders a notice briefly describing such
amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
SECTION 10.02.
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 10.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. (a) A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers' Certificate from Holdings certifying that the
requisite number of consents have been received. After an amendment or waiver
becomes effective, it shall bind
Page 63
every Holder. An amendment or waiver becomes effective upon the (i) receipt by
Holdings or the Trustee of the requisite number of consents, (ii) satisfaction
of conditions to effectiveness as set forth in this Indenture and any indenture
supplemental hereto containing such amendment or waiver and (iii) execution of
such amendment or waiver (or supplemental indenture) by Holdings and the
Trustee.
(b) Holdings may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders 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 Holders 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. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 10.05. NOTATION ON OR EXCHANGE OF NOTES. If an amendment changes
the terms of a Note, the Trustee may require the Holder of the Note to deliver
it to the Trustee. The Trustee may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if
Holdings or the Trustee so determines, Holdings in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms. Failure to make the appropriate notation or to issue a new Note shall not
affect the validity of such amendment.
SECTION 10.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this ARTICLE 10 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 8.01) 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 and that such amendment
is the legal, valid and binding obligation of Holdings enforceable against it in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof (including SECTION 10.03).
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of TIA xx.xx. 310 to 318, inclusive, such imposed
duties or incorporated provision shall control.
SECTION 11.02. NOTICES. Any notice or communication shall be in writing
and delivered in person, mailed by first-class mail addressed as follows or
transmitted via telecopy (or other facsimile device) with receipt confirmed as
set forth below:
Page 64
if to Holdings:
Veterinary Centers of America, Inc.
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
(telecopier no.: (000) 000-0000)
with copies to:
Xxxxxxx Xxxxx & Partners, L.P.
00000 Xxxxx Xxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
(telecopier no.: (000) 000-0000)
and
Irell & Xxxxxxx LLP
1800 Avenue of the Stars, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: J. Xxxxxxxxxxx Xxxxxxx
(telecopier no.: (000) 000-0000)
if to the Trustee:
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
(telecopier no.: (000) 000-0000)
Holdings 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 Holder shall be mailed ,
first class mail, to the Holder at the Holder'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 Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Page 65
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA ss. 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. Holdings, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by Holdings to the Trustee to take or refrain from
taking any action under this Indenture, Holdings shall furnish to the Trustee:
(a) an Officers' Certificate in form reasonably satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to SECTION 4.05) shall
include:
(a) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of 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
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. WHEN NOTES DISREGARDED. In determining whether the
Holders of the required principal amount at maturity of Notes have concurred in
any direction, waiver or consent, Notes owned by Holdings, any Subsidiary or by
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with Holdings or any Subsidiary 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 Notes which the Trustee knows are so owned shall be so
disregarded. Subject to the foregoing, only Notes outstanding at the time shall
be considered in any such determination.
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SECTION 11.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee
may make reasonable rules for action by or a meeting of Holders. The Registrar
and the Paying Agent may make reasonable rules for their functions.
SECTION 11.08. LEGAL HOLIDAYS. 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 11.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES 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.
SECTION 11.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, stockholder or member, as such, of Holdings or any of the Subsidiaries
shall not have any liability for any obligations of Holdings or any of the
Subsidiaries under the Notes or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Note, each Holder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Notes.
SECTION 11.11. SUCCESSORS. All agreements of Holdings and each
Subsidiary in this Indenture and the Notes shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. MULTIPLE ORIGINALS; COUNTERPARTS. The parties may sign
any number of counterparts 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 11.13. 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.
SECTION 11.14. INCORPORATION. All Exhibits and Schedules attached hereto
are incorporated as part of this Indenture as if fully set forth herein.
SECTION 11.15. INTENT TO LIMIT INTEREST TO MAXIMUM. In no event shall
the interest rate payable on the Notes under this Indenture, plus any other
amounts paid by Holdings to the Holders in connection therewith, exceed the
highest rate permissible under law that a court of competent jurisdiction shall,
in the final determination, deem applicable. Holdings and the Trustee, in
executing and delivering this Indenture, intend legally to agree upon the rate
or rates of interest and the manner of payment stated within it; PROVIDED,
HOWEVER, that, anything
Page 67
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceed the maximum allowable under applicable law,
then, IPSO FACTO as of the date of this Indenture, Holdings is and shall be
liable only for the payment of such maximum as allowed by law, and payment
received from Holdings in excess of such legal maximum, whenever received, shall
be applied to reduce the principal balance of any Notes then outstanding to the
extent of such excess, or, if such excess exceeds the then outstanding
principal, such excess shall be first set-off against any other amounts then due
and owing by Holdings and refunded to Holdings.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
VETERINARY CENTERS OF AMERICA, INC.
By: /S/ XXXXXX X. XXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL
ASSOCIATION
By: /S/ XXXXX XXXX
--------------------------------------------
Name: Xxxxx Xxxx
Title: Assistant Vice President
Page 69
APPENDIX A
PROVISIONS RELATING TO
INITIAL NOTES
AND EXCHANGE NOTES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix A, except where the context otherwise
requires, ther terms "Initial Notes" and "Exchange Notes" shall include any PIK
Notes issued thereon and the following terms shall have the meanings indicated
below:
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" means the Exchange
and Registration Rights Agreement, dated as of September 20, 2000, by and among
Holdings and the Purchasers.
"DEFINITIVE NOTE" means a certificated Initial Note or Exchange
Note (bearing the Restricted Notes Legend if the transfer of such Note is
restricted by Applicable Law) that does not include the Global Notes Legend.
"DEPOSITARY" means The Depository Trust Company, its nominees and
their respective successors.
"GLOBAL NOTES LEGEND" means the legend set forth under that
caption in Exhibit B to this Indenture.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional
"accredited investor" as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"NOTES" under the Indenture include the Initial Notes and any
Exchange Notes issued in exchange for Initial Notes.
"NOTES CUSTODIAN," who shall initially be the Trustee, means the
custodian with respect to a Global Exchange Note (as appointed by the
Depositary) or any successor person thereto.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of
September 20, 2000, by and among Holdings and the Purchasers.
"PURCHASERS" means GS Mezzanine Partners II, L.P., a Delaware
limited partnership, GS Mezzanine Partners II Offshore, L.P., an exempted
limited partnership organized
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under the laws of the Cayman Islands, TCW Leveraged Income Trust, L.P., a
Delaware limited partnership, TCW Leveraged Income Trust II, L.P., a Delaware
limited partnership, TCW Leveraged Income Trust IV, L.P., a Delaware limited
partnership, TCW/Crescent Mezzanine Partners II, L.P., a Delaware limited
partnership, TCW/Crescent Mezzanine Trust II, a closed-end Delaware statutory
business trust, and The Northwestern Mutual Life Insurance Company, a Wisconsin
corporation.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"REGISTERED EXCHANGE OFFER" means the offer by Holdings, pursuant
to the Exchange and Registration Rights Agreement, to certain Holders of Initial
Notes, to issue and deliver to such Holders, in exchange for their Initial
Notes, a like aggregate principal amount at maturity of Exchange Notes
registered under the Securities Act.
"REGULATION S" means Regulation S under the Securities Act.
"RESTRICTED NOTES LEGEND" means the legend set forth in PARAGRAPH
2.3(D)(I) herein.
"RULE 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"RULE 144A" means Rule 144A under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" means a registration statement
filed by Holdings in connection with the offer and sale of Initial Notes
pursuant to the Exchange and Registration Rights Agreement.
"TRANSFER RESTRICTED NOTES" means Definitive Notes and any other
Notes that bear or are required to bear the Restricted Notes Legend.
1.2 OTHER DEFINITIONS
TERM: DEFINED IN SECTION:
---- ------------------
"AGENT MEMBERS 2.1(c)
"INITIAL DEFINITIVE NOTES" 2.1(b)
"GLOBAL EXCHANGE NOTE" 2.1(b)
2. THE NOTES
2.1 FORM AND DATING
Page 2
(a) The Initial Notes issued on the date hereof will be sold by
Holdings pursuant to the Purchase Agreement to the Purchasers. Such Initial
Notes may thereafter be transferred to, among others, QIBs, purchasers in
reliance on Regulation S and, except as set forth below, Institutional
Accredited Investors in accordance with Rule 501.
(b) The Initial Notes shall be issued in the form of Definitive
Notes, in fully registered form (the "INITIAL DEFINITIVE NOTES") bearing the
Restricted Notes Legend and shall be issued to and registered in the name of the
applicable Purchaser and duly executed by Holdings and authenticated by the
Trustee as provided in this Indenture.
Initial Notes will be exchanged for Exchange Notes in the
Registered Exchange Offer pursuant to the Exchange and Registration Rights
Agreement. Exchange Notes will also be issued upon the sale of Initial Notes (i)
under a Shelf Registration Statement or (ii) at any time that the Initial Notes
being sold are not Transfer Restricted Notes. Exchange Notes shall, except as
provided in SECTIONS 2.3 and 2.4, be issued in global form bearing the Global
Notes Legend (the "GLOBAL EXCHANGE NOTES"). The aggregate principal amount at
maturity of the Global Exchange Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee and on the schedules thereto as hereinafter provided.
(c) BOOK-ENTRY PROVISIONS. This PARAGRAPH 2.1(C) shall apply only
to a Global Exchange Note deposited with or on behalf of the Depositary.
Holdings shall execute and the Trustee shall, in accordance with
this PARAGRAPH 2.1(C) and PARAGRAPH 2.2 and pursuant to an order of Holdings
signed by one officer, authenticate and deliver one Global Exchange Note that
(i) shall be registered in the name of the Depositary for such Global Exchange
Note or the nominee of such Depositary and (ii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions or held
by the Trustee as Notes Custodian.
Members of, or participants in, the Depositary ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to any Global Exchange
Note held on their behalf by the Depositary or by the Trustee as Notes Custodian
or under such Global Exchange Note, and the Depositary may be treated by
Holdings, the Trustee and any agent of Holdings or the Trustee as the absolute
owner of such Global Exchange Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent Holdings, the Trustee or any agent
of Holdings 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 of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Exchange Note.
(d) DEFINITIVE NOTES. Except as provided in PARAGRAPH 2.3 or 2.4,
owners of beneficial interests in Global Exchange Notes will not be entitled to
receive physical delivery of certificated Notes.
Page 3
2.2 AUTHENTICATION. The Trustee shall authenticate and make available
for delivery upon a written order of Holdings signed by one officer (a) Initial
Definitive Notes for original issue on the date hereof in an aggregate principal
amount of $100,000,000, (b) subject to the terms of this Indenture, Exchange
Notes in the form of Global Exchange Notes for issue in a Registered Exchange
Offer pursuant to the Exchange and Registration Rights Agreement in a like
principal amount at maturity of the Initial Notes exchanged pursuant thereto,
(c) subject to the terms of this Indenture, Exchange Notes in the form of Global
Exchange Notes in lieu of Initial Notes upon the sale of such Initial Notes (i)
under a Shelf Registration Statement or (ii) at any time that such Initial Notes
being sold are not Transfer Restricted Notes, (d) subject to the terms of this
Indenture, Definitive Notes upon presentation to the Trustee of Initial Notes
that are not required to bear the Restricted Notes Legend, and (e) upon election
of Holdings in writing, PIK Notes in payment of interest on any other Notes
(such written election to be provided to the Trustee at least 3 Business Days
prior to the Interest Payment Date on which PIK Notes will be issued). Such
order shall specify the amount of the Notes to be authenticated, the date on
which the original issue of Notes is to be authenticated and whether the Notes
are to be Initial Notes or Exchange Notes. The aggregate principal amount at
maturity of the Initial Notes and the Exchange Notes outstanding at any time may
not exceed $100,000,000, plus the amount of any PIK Notes, except as provided in
SECTIONS 2.07 and 2.08 of this Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented to the Registrar with a request:
(i) to register the transfer of such Definitive Notes;
or
(ii) to exchange such Definitive Notes for an equal
principal amount at maturity of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; PROVIDED, HOWEVER,
that the Definitive Notes surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to
Holdings and the Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(2) in the case of Transfer Restricted Notes are
accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Notes are being
delivered to the Registrar by a Holder for registration in
the name of such Holder, without
Page 4
transfer, a certification from such Holder to that effect
(in the form set forth on the reverse side of the Initial
Note); or
(B) if such Definitive Notes are being
transferred to Holdings, a certification to that effect
(in the form set forth on the reverse side of the Initial
Note); or
(C) if such Definitive Notes are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or in
reliance upon another exemption from the registration
requirements of the Securities Act, (x) a certification to
that effect (in the form set forth on the reverse side of
the Initial Note) and (y) if Holdings, the Registrar or
the Trustee so requests, an opinion of counsel or other
evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend
set forth in PARAGRAPH 2.3(D)(I).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE NOTE FOR A
BENEFICIAL INTEREST IN A GLOBAL EXCHANGE NOTE. A Definitive Note may not be
exchanged for a beneficial interest in a Global Exchange Note except (i) as part
of a Registered Exchange Offer, (ii) upon sale of the Definitive Note under the
Shelf Registration Statement, (iii) upon sale of the Definitive Note at the time
such Definitive Note is not a Transfer Restricted Note or (iv) upon presentation
to the Trustee of Definitive Notes that are not Transfer Restricted Notes. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to Holdings and
the Registrar, together with written instructions directing the Trustee to make,
or to direct the Notes Custodian to make, an adjustment on its books and records
with respect to such Global Exchange Note to reflect an increase in the
aggregate principal amount at maturity of the Notes represented by the Global
Exchange Note, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel such
Definitive Note and cause, or direct the Notes Custodian to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Notes Custodian, the aggregate principal amount at maturity of Notes
represented by the Global Exchange Note to be increased by the aggregate
principal amount at maturity of the Definitive Note to be exchanged and shall
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Global Exchange Note equal to the
principal amount at maturity of the Definitive Note so canceled. If no Global
Exchange Notes are then outstanding and the Global Exchange Note has not been
previously exchanged for certificated Notes pursuant to PARAGRAPH 2.4, Holdings
shall issue and the Trustee shall authenticate, upon written order of Holdings
in the form of an Officers' Certificate, a new Global Exchange Note in the
appropriate principal amount at maturity.
(c) TRANSFER AND EXCHANGE OF GLOBAL EXCHANGE NOTES. (i) The
transfer of the Global Exchange Note or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture and the
procedures of the Depositary therefor. A transferor of a beneficial interest in
a Global Exchange Note shall deliver a written order given in accordance
Page 5
with the Depositary's procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial interest
in such Global Exchange Note and such account shall be credited in accordance
with such order with a beneficial interest in the applicable Global Exchange
Note and the account of the Person making the transfer shall be debited by an
amount equal to the beneficial interest in the Global Exchange Note being
transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in PARAGRAPH 2.4), a Global Exchange Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) LEGEND.
(i) Except as permitted by the following clauses (ii),
(iii) or (iv), each Definitive Note (and all Notes issued in exchange therefor
or in substitution thereof) shall bear a legend in substantially the following
form (each defined term in the legend being defined as such for purposes of the
legend only):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH HOLDINGS OR ANY
AFFILIATE OF HOLDINGS WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
SUCH NOTE), ONLY (A) TO HOLDINGS, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL
Page 6
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT AT MATURITY OF
THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
HOLDINGS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Note that is a Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Note for a Definitive Note that does not bear
the legends set forth above and rescind any restriction on the transfer of such
Transfer Restricted Note if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial Note).
(iii) After a transfer of any Initial Notes during the
period of the effectiveness and pursuant to a Shelf Registration Statement with
respect to such Initial Notes, all requirements pertaining to the Restricted
Notes Legend on such Initial Notes shall cease to apply and the requirements
that any such Initial Notes be issued in global form shall become applicable.
Page 7
(iv) Upon the consummation of a Registered Exchange
Offer with respect to the Initial Notes pursuant to which Holders of such
Initial Notes are offered Exchange Notes in exchange for their Initial Notes,
Exchange Notes in global form without the Restricted Notes Legend shall be
available to Holders that exchange such Initial Notes in such Registered
Exchange Offer.
(e) CANCELLATION OR ADJUSTMENT OF GLOBAL EXCHANGE NOTE. At such
time as all beneficial interests in a Global Exchange Note have either been
exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled,
such Global Exchange Note shall be returned by the Depositary to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Exchange Note is exchanged
for Definitive Notes, transferred in exchange for an interest in another Global
Exchange Note, redeemed, repurchased or canceled, the principal amount at
maturity of Notes represented by such Global Exchange Note shall be reduced and
an adjustment shall be made on the books and records of the Trustee (if it is
then the Notes Custodian for such Global Exchange Note) with respect to such
Global Exchange Note, by the Trustee or the Notes Custodian, to reflect such
reduction.
(f) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF NOTES.
(i) To permit registrations of transfers and exchanges,
Holdings shall execute and the Trustee shall authenticate, Definitive
Notes and Global Exchange Notes at the Registrar's request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but Holdings or the Trustee may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charge payable upon
exchanges pursuant to SECTIONS 2.06, 3.06, 4.09, 4.10 and 10.05 of this
Indenture).
(iii) Prior to the due presentation for registration of
transfer of any Note, Holdings, the Trustee, the Paying Agent or the
Registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on and Special Interest,
if any, with respect to such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of Holdings, the Trustee,
the Paying Agent or the Registrar shall be affected by notice to the
contrary.
(iv) All Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and
shall be entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
Page 8
(g) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Exchange Note, a member of, or a
participant in the Depositary or any other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any
notice (including any notice of redemption or repurchase) or the payment
of any amount, under or with respect to such Notes. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Notes shall be given or made only to the registered
Holders (which shall be the Depositary or its nominee in the case of a
Global Exchange Note). The rights of beneficial owners in any Global
Exchange Note shall be exercised only through the Depositary subject to
the applicable rules and procedures of the Depositary. The Trustee may
rely and shall be fully protected in relying upon information furnished
by the Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants, members or
beneficial owners in any Global Exchange Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by,
the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
2.4 DEFINITIVE NOTES
(a) A Global Exchange Note deposited with the Depositary or with
the Trustee as Notes Custodian pursuant to PARAGRAPH 2.1 or issued in connection
with a Registered Exchange Offer shall be transferred to the beneficial owners
thereof in the form of Definitive Notes in an aggregate principal amount at
maturity equal to the principal amount at maturity of such Global Exchange Note,
in exchange for such Global Exchange Note, only if such transfer complies with
PARAGRAPH 2.3 and (i) the Depositary notifies Holdings that it is unwilling or
unable to continue as a Depositary for such Global Exchange Note or if at any
time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, and a successor depositary is not appointed by Holdings within 90
days of such notice or after Holdings becomes aware of such cessation, or (ii)
an Event of Default has occurred and is continuing or (iii) Holdings, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Notes under this Indenture.
(b) Any Global Exchange Note that is transferable to the
beneficial owners thereof pursuant to this PARAGRAPH 2.4 shall be surrendered by
the Depositary to the Trustee, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Exchange Note, an
Page 9
equal aggregate principal amount at maturity of Definitive Notes of authorized
denominations. Any portion of a Global Exchange Note transferred pursuant to
this paragraph shall be executed, authenticated and delivered only in
denominations of $1,000 (in principal amount at maturity) and any multiple
thereof and registered in such names as the Depositary shall direct. Any
certificated Initial Note in the form of a Definitive Note delivered in exchange
for an interest in the Global Exchange Note shall, except as otherwise provided
by PARAGRAPH 2.3(D), bear the Restricted Notes Legend.
(c) Subject to the provisions of PARAGRAPH 2.4(B), the registered
Holder of a Global Exchange Note may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(d) In the event of the occurrence of any of the events specified
in PARAGRAPH 2.4(A)(I), (II) or (III), Holdings will promptly make available to
the Trustee a reasonable supply of Definitive Notes in fully registered form
without interest coupons.
Page 10
EXHIBIT A
FORM OF FACE OF INITIAL NOTE [1]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH HOLDINGS OR ANY AFFILIATE OF HOLDINGS WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO HOLDINGS, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING
THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT AT MATURITY OF
THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO HOLDINGS' AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
------------------
1 This form is also to be used for PIK Notes issued in payment of interest on
Initial Notes.
Page 1
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
This debt instrument has been issued with original issue discount.
The following information is provided pursuant to Treas. Reg. Section 1.1275-3:
Issue Price: $892.70
Issue Date: September 20, 2010
Amount of Original Issue Discount: $2,124.84 per $1,000 of face amount
Yield to Maturity: 17.25%
Page 2
No. [___________] $__________
15.5% Senior Note due 0000
XXXXXXXXXX XXXXXXX XX XXXXXXX, INC., a Delaware corporation, promises to
pay to ___________ or registered assigns, the principal amount at maturity of [
] Dollars on September 20, 2010 (the "STATED MATURITY DATE").
Interest Payment Dates: March 31 and September 30.
Record Dates: March 15 and September 15.
Page 3
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
VETERINARY CENTERS OF AMERICA, INC.
By:
-------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Chase Manhattan Bank and Trust Company, National Association, Trustee, certifies
that this is one of the Notes referred to in the Indenture.
By: /S/ XXXXX XXXX
----------------------------------
Name: Xxxxx Xxxx
Title: Assistant Vice President
Page 4
FORM OF REVERSE SIDE OF INITIAL NOTE [2]
15.5% Senior Note due 2010
1. INTEREST
(a) VETERINARY CENTERS OF AMERICA, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called "HOLDINGS"), promises to pay interest thereon
from the date hereof, semi-annually in arrears on September 30 and March 31 of
each year commencing March 31, 2001 and, if different, on the Stated Maturity
Date (each, an "INTEREST PAYMENT DATE") at the rate of 15.5% per annum, until
the principal hereof is paid. Such interest on the Notes shall accrue from the
most recent date to which interest has been paid or duly provided for or, if no
such interest has been paid or duly provided for, from September 20, 2000 until
the principal hereof is due. Interest shall be paid in cash, except that, on any
Interest Payment Date prior to the fifth anniversary of the Closing Date,
Holdings will have the option to pay all or any portion of the interest payable
on such date by issuing additional Notes in the form of Exhibit A to the
Indenture referred to below ("PIK Notes") in a principal amount equal to the
interest Holdings elects not to pay in cash on such date. Any principal of, or
premium or installment of interest or Special Interest (as hereinafter defined)
on this Note which is overdue shall bear interest at the rate equal to 2% per
annum above the interest rate specified on the face of this Note from the date
such amounts are due until they are paid (to the extent that the payment of such
interest shall be legally enforceable), and such excess interest shall be
payable on demand. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
(b) SPECIAL INTEREST. The holder of this Note is entitled to the
benefits of the Exchange and Registration Rights Agreement, dated as of
September 20, 2000, by and among Holdings and the Purchasers named therein.
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Exchange and Registration Rights Agreement. If
(i) the Shelf Registration Statement or Exchange Offer Registration Statement,
as applicable, under the Exchange and Registration Rights Agreement, is not
filed with the Commission on or prior to 90 days after the Trigger Date, (ii)
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is not declared effective on or prior to 150 days after the
Trigger Date, (iii) the Registered Exchange Offer is not consummated on or prior
to 180 days after the Trigger Date, or (iv) the Shelf Registration Statement is
filed and declared effective on or prior to 150 days after the Trigger Date but
shall thereafter cease to be effective (at any time that Holdings are obligated
to maintain the effectiveness thereof) without being succeeded within 45 days by
an additional Registration Statement filed and declared effective (each such
event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"),
Holdings will be obligated to pay Special Interest to each holder of Transfer
Restricted Notes, during the period of one or more such Registration Defaults,
in an amount equal to 0.5% per
-----------------------------
2 This form is also to be used for PIK Notes issued in payment of interest on
Initial Notes.
Page 5
annum, which amount shall increase to 1.0% per annum after the first 120-day
period following the occurrence of the first Registration Default, for the
period from and including the date of occurrence of the first Registration
Default until such time as no Registration Default is in effect (such amount
equal to the "SPECIAL INTEREST") (after which such Special Interest shall cease
to be payable). The Trustee shall have no responsibility with respect to the
determination of the amount of any such Special Interest.
(c) RECORD DATES, ETC. Upon the issuance of an Exchange Note in exchange
for this Note, any accrued and unpaid interest (including Special Interest) on
this Note shall cease to be payable to the Holder hereof but such accrued and
unpaid interest (including Special Interest) shall be payable on the next
Interest Payment Date for such Exchange Note to the Holder thereof on the
related Regular Record Date. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Agreement, be paid to the Person in whose name this Note is registered at the
close of business on the Regular Record Date (the "REGULAR RECORD DATE") for
such interest which shall be the fifteenth calendar day (whether or not a
Business Day) of the calendar month in which such Interest Payment Date occurs.
Notwithstanding the foregoing, if this Note is issued after a Regular Record
Date and prior to an Interest Payment Date, the record date for such Interest
Payment Date shall be the original issue date.
2. METHOD OF PAYMENT
Holdings shall pay interest on the Notes (except defaulted interest) to
the Persons who are registered holders of Notes at the close of business on the
March 15 or September 15 next preceding the Interest Payment Date even if Notes
are canceled after the record date and on or before the Interest Payment Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
Holdings shall pay principal, Special Interest, if any, and interest in money of
the United States of America that at the time of payment is legal tender for
payment of public and private debts. Holdings will, unless such payment is made
in PIK Notes, make all money payments in respect of a certificated Note
(including principal and interest), by mailing a check to the registered address
of each Holder thereof; PROVIDED, HOWEVER, that money payments on the Notes may
also be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount at maturity of Notes, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Holdings shall maintain an office or agency, which shall be located in
the Borough of Manhattan, The City of New York, where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR") and an office or
agency where Notes may be presented for payment (the "PAYING AGENT"). Initially,
Chase Manhattan Bank and Trust Company,
Page 6
National Association, a national banking association organized under the federal
laws of the United States (the "TRUSTEE"), will act as Paying Agent and
Registrar. Holdings may appoint and change any Paying Agent, Registrar or
co-registrar without notice. Holdings or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
Holdings issued the Notes under an Indenture, dated as of September 20,
2000 (the "INDENTURE"), by and between Holdings and the Trustee. The terms of
the Notes 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. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and used but not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all terms and
provisions of the Indenture, and Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Notes are senior unsecured obligations of Holdings limited to
$100,000,000 aggregate principal amount at any one time outstanding, plus the
amount of any PIK Notes issued (subject to SECTION 2.07 of the Indenture). This
Note is one of the Initial Notes referred to in the Indenture issued in an
aggregate original principal amount of $100,000,000. The Notes include the
Initial Notes, the PIK Notes and any Exchange Notes issued in exchange for
Initial Notes or PIK Notes. The Initial Notes, the PIK Notes and the Exchange
Notes are treated as a single class of Notes under the Indenture. The Indenture
imposes certain limitations on the ability of Holdings and its Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Subsidiaries, issue or sell shares of Capital Stock of such Subsidiaries, enter
into or permit certain transactions with Affiliates and make asset sales. The
Indenture also imposes limitations on the ability of Holdings to consolidate or
merge with or into any other Person or convey, transfer or lease all or
substantially all of the property of Holdings.
5. OPTIONAL REDEMPTION
The Notes are subject to redemption, at the election of Holdings, upon
not less than ten (10) nor more than sixty (60) days' notice by mail (each
prepayment must relate to an aggregate principal amount of Notes of at least $5
million):
(i) At any time prior to the second anniversary of the Closing Date,
up to 35% of the aggregate principal amount of the Notes may be prepaid
from the proceeds of an Equity Offering of Common Stock of Holdings at a
price of 110% of the principal amount thereof plus accrued interest;
provided that, after giving effect to any such prepayment, at least 65% of
the original principal amount of the Notes issued on the
Page 7
Closing Date plus all PIK Notes issued in lieu of cash interest thereon
remains outstanding;
(ii) at any time on or after the second anniversary of the Closing
Date and prior to the third anniversary of the Closing Date, the entire
aggregate principal amount of the Notes then outstanding may be prepaid
concurrently with the consummation of an Equity Offering of Common Stock of
Holdings or a Change of Control at a price of 110% of the principal amount
plus accrued interest;
(iii) prepayment of the notes will be permitted in whole or in part,
at any time on or after the third anniversary of the Closing Date, at the
following Redemption Prices at the prices listed below (expressed as a
percentage of the principal amount of the Notes being prepaid as of the
Redemption Date) plus accrued interest to the date of prepayment:
Redemption Date Redemption Price
September 20, 2003 - September 19, 2006 107.50%
September 20, 2006 - September 19, 2007 106.20%
September 20, 2007 - September 19, 2008 104.65%
September 20, 2008 - September 19, 2009 103.10%
September 20, 2009 and thereafter 101.55%
6. SINKING FUND; SPECIAL MANDATORY REDEMPTION
(a) The Notes are not subject to any sinking fund.
(b) If the aggregate amount which would be includible in gross income
for federal income tax purposes with respect to the Notes before any Interest
Payment Date occurring after the fifth (5th) anniversary of the Closing Date
(the "AGGREGATE INCLUSION") exceeds an amount equal to the sum of (x) the
aggregate amount of interest paid in cash under the Notes before such Interest
Payment Date and (y) the product of the issue price of all of the Notes (as
determined under United States Treasury Regulation Section 1.1273-2(a))
multiplied by 17.25% (the sum of (x) and (y), the "Adjusted Actual Payment"),
Holdings shall, on such Interest Payment Date, make a mandatory redemption (any
such redemption a "SPECIAL MANDATORY REDEMPTION") of the Notes, without premium,
to the extent that the Aggregate Inclusion exceeds the Adjusted Actual Payment.
Page 8
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed by first-class mail at least 10 days
but not more than 60 days before the Redemption Date to each Holder of Notes to
be redeemed at such Holder's registered address. Notes in denominations larger
than $1,000 (in principal amount at maturity) may be redeemed in part but only
in multiples of $1,000 (in principal amount at maturity). If money sufficient to
pay the redemption price of and accrued and unpaid interest and Special
Interest, if any, on all Notes (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, cash
interest and Special Interest, if any, ceases to accrue on such Notes (or such
portions thereof) called for redemption.
8. REPURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL AND SALE
OF ASSETS
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right, subject to certain conditions specified in the Indenture, to
require Holdings to repurchase all or any part of the Notes of such Holder at a
purchase price in cash equal to 101% of the principal amount of the Notes to be
repurchased, plus accrued and unpaid interest thereon and Special Interest, if
any, in respect thereof to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due and
Special Interest, if any, on the relevant Interest Payment Date) as provided in,
and subject to the terms of, the Indenture.
In accordance with SECTION 4.10 of the Indenture, Holdings will be
required to offer to purchase Notes upon the occurrence of certain sales of
assets.
9. RESTRICTIONS ON PAYMENT OF SPECIAL MANDATORY REDEMPTION
Any payment in connection with a Special Mandatory Redemption is subject
to the restrictions of SECTION 7.12 of the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in denominations of
$1,000 (in principal amount at maturity) and multiples thereof. PIK Notes, if
any, may be in registered form in any whole dollar amount. A Holder may transfer
or exchange Initial Notes in accordance with the Indenture. Upon any 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. Holdings shall not be
required to make and the Registrar need not register transfers or exchanges of
Notes selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes for a period of
15 days prior to a selection of Notes to be redeemed.
11. PERSONS DEEMED OWNERS
Except as provided in paragraph 2 hereof, the registered Holder of this
Note shall be treated as the owner of it for all purposes.
Page 9
12. UNCLAIMED MONEY
If money for the payment of principal of or interest on the Notes has
been deposited with the Trustee or Paying Agent and remains unclaimed for two
years after such amount is due and payable, the Trustee or Paying Agent shall
pay the money back to Holdings at its written request unless an abandoned
property law designates another Person. After any such payment, the Trustee and
the Paying Agent shall have no further liability for such funds and Holders
entitled to the money must look only to the recipient and not to the Trustee for
payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, Holdings at any time may terminate some
of or all its obligations under the Notes and the Indenture if Holdings deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Notes to redemption or maturity, as the case
may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Notes may be amended without prior notice to any Holder but
with the written consent of the Holders of at least a majority in principal
amount at maturity of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange for the Notes) and (b) any default
may be waived with the written consent of the Holders of at least a majority in
principal amount at maturity of the outstanding Notes. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Notes, Holdings and the Trustee may amend the Indenture or the Notes (a) to cure
any ambiguity, omission, defect or inconsistency; (b) to provide for
uncertificated Notes in addition to or in place of certificated Notes (PROVIDED,
HOWEVER, that the uncertificated Notes are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the Code); (c) to
add to the covenants of Holdings for the benefit of the Holders or to surrender
any right or power conferred on Holdings in the Indenture; (d) to comply with
any requirement of the Commission in connection with qualifying, or maintaining
the qualification of, the Indenture under the TIA; (e) to make any change that
does not adversely affect the rights of any Holder; (f) to provide for the
issuance of the Exchange Notes which shall have terms substantially identical in
all material respects to the Initial Notes (except that the transfer
restrictions contained in the Initial Notes shall be modified or eliminated, as
appropriate), and which shall be treated, together with any outstanding Initial
Notes, and any PIK Notes issued in payment of interest on the Initial Notes or
the Exchange Notes, as a single issue of securities; or (g) to change the name
or title of the Notes.
15. DEFAULTS, REMEDIES AND ACCELERATION
If an Event of Default (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of Holdings or the
Company) occurs and is continuing,
Page 10
the Trustee or the Holders of (i) until a Note Registration, more than 50% in
principal amount of the Notes at the time outstanding, and (ii) thereafter, 25%
or more in principal amount at maturity of the outstanding Notes may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of Holdings or the Company occurs, the
principal of and interest on all the Notes shall become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holders. Under certain circumstances, the Holders of a majority in principal
amount at maturity of the Notes may rescind any such acceleration with respect
to the Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders have offered
to the Trustee reasonable indemnity or security against any loss, liability or
expense. Except to enforce the right to receive payment of principal or interest
when due, no Holder may pursue any remedy with respect to the Indenture or the
Notes unless (i) such Holder has previously given to the Trustee written notice
stating that an Event of Default is continuing, (ii) Holders of at least 25% in
principal amount at maturity of the outstanding Notes have requested the Trustee
in writing to pursue the remedy, (iii) such Holder or Holders have offered to
the Trustee reasonable security or indemnity against any loss, liability or
expense, (iv) the Trustee has not complied with such request within 60 days
after receipt of the request and the offer of security or indemnity and (v) the
Holders of a majority in principal amount at maturity of the outstanding Notes
have not given the Trustee a direction inconsistent with such request during
such 60-day period. Subject to certain restrictions, the Holders of a majority
in principal amount at maturity of the outstanding Notes are given the right to
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. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or, subject to certain exceptions in the Indenture,
that the Trustee determines is unduly prejudicial to the rights of other Holders
or would involve the Trustee in personal liability. Prior to taking any action
under the Indenture, 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.
16. TRUSTEE DEALINGS WITH HOLDINGS
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by Holdings or its Affiliates and may otherwise deal with Holdings or its
Affiliates with the same rights it would have if it were not Trustee.
Page 11
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of Holdings or
any of the Subsidiaries shall not have any liability for any obligations of
Holdings or any of the Subsidiaries under the Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
18. AUTHENTICATION
This Note 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 Note.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW
THIS NOTE 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.
21. REGISTRATION RIGHTS
Pursuant to the Exchange and Registration Rights Agreement, Holdings
will be obligated upon the occurrence of certain events to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for an Exchange Note which has been registered under the
Securities Act, in like original principal amount and having terms identical in
all material respects to this Note, other than there shall be no provision for
Special Interest.
HOLDINGS WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF
THIS NOTE.
Page 12
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books
of Holdings. The agent may substitute another to act for him.
------------------------------------------------------------
Date: ________________ Your Signature: _____________________
------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
Page 13
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED
NOTES
This certificate relates to $_________ principal amount at maturity of Notes
held in definitive form by the undersigned.
The undersigned has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Notes are
being transferred in accordance with its terms:
CHECK ONE BOX BELOW
[ ] (1) to Holdings; or
[ ] (2) to the Registrar for registration in the name of the Holder,
without transfer; or
[ ] (3) pursuant to an effective registration statement under the
Securities Act of 1933; or
[ ] (4) inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
[ ] (5) outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
[ ] (6) to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
[ ] (7) pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Page 14
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any Person
other than the registered holder thereof; PROVIDED, HOWEVER, that if box
(5), (6) or (7) is checked, the Trustee may require, prior to
registering any such transfer of the Notes, such legal opinions,
certifications and other information as Holdings has reasonably
requested 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 of 1933.
------------------------
Your Signature
Signature Guarantee:
Date:
----------------------- -------------------------
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
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 Holdings 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
Page 15
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY HOLDINGS PURSUANT TO
SECTION 4.09 (CHANGE OF CONTROL) OR SECTION 4.10 (APPLICATION OF EXCESS PROCEEDS
FROM SALE OF ASSETS) OF THE INDENTURE, CHECK THE BOX:
[ ]
LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK CHANGE OF CONTROL
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED BY
HOLDINGS PURSUANT TO SECTION 4.09 OR 4.10 OF THE INDENTURE, STATE THE PRINCIPAL
AMOUNT AT MATURITY ($1,000 OR A MULTIPLE THEREOF):
$
DATE: __________________ YOUR SIGNATURE: _____________________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE NOTE)
SIGNATURE GUARANTEE:________________________________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE
Page 16
EXHIBIT B
FORM OF FACE OF EXCHANGE NOTE [1]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO HOLDINGS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL EXCHANGE NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL EXCHANGE NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
This debt instrument has been issued with original issue discount.
The following information is provided pursuant to Treas. Reg. Section 1.1275-3:
Issue Price: $892.70
Issue Date: September 20, 2000
Amount of Original Issue Discount: $2,124.84
Yield to Maturity: 17.25%
---------------------------
1 This form is also to be used for PIK Notes issued in payment of interest on
Exchange Notes.
Page 17
No. $__________
15.5% Senior Note due 2010
[CUSIP No. ______]
VETERINARY CENTERS OF AMERICA, INC., a Delaware corporation, promises to
pay to ___________________, or registered assigns, the principal amount at
maturity [of ] Dollars on September 20, 2010 (the "STATED MATURITY DATE").
Interest Payment Dates: March 31 and September 30.
Record Dates: March 15 and September 15.
Page 18
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
VETERINARY CENTERS OF AMERICA, INC.
By:
--------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Chase Manhattan Bank and Trust Company, National Association, Trustee, certifies
that this is one of the Notes referred to in the Indenture.
By:
--------------------------------
Authorized Signatory
*/ If the Note is to be issued in global form, add the Global Notes Legend and
the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL EXCHANGE NOTES
- SCHEDULE OF INCREASES OR DECREASES IN GLOBAL EXCHANGE NOTE".
Page 19
FORM OF REVERSE SIDE OF EXCHANGE NOTE2
15.5% Senior Note due 2010
1. INTEREST
VETERINARY CENTERS OF AMERICA, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called "HOLDINGS"), promises to pay interest thereon
from the date hereof, semi-annually in arrears on September 30 and March 31 of
each year commencing March 31, 2001 and, if different, on the Stated Maturity
Date (each, an "Interest Payment Date") at the rate of 15.5% per annum, until
the principal hereof is paid. Such interest on the Notes shall accrue from the
most recent date to which interest has been paid or duly provided for or, if no
such interest has been paid or duly provided for, from September 20, 2000 until
the principal hereof is due. Interest shall be paid in cash, except that, on any
Interest Payment Date prior to the fifth anniversary of the Closing Date,
Holdings will have the option to pay all or any portion of the interest payable
on such date by issuing additional Notes ("PIK Notes") in a principal amount
equal to the interest Holdings elects not to pay in cash on such date. Any
principal of, or premium or installment of interest on this Note which is
overdue shall bear interest at the rate equal to 2% per annum above the interest
rate specified on the face of this Note from the date such amounts are due until
they are paid (to the extent that the payment of such interest shall be legally
enforceable), and such excess interest shall be payable on demand. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Agreement, be paid to the Person in whose
name this Note is registered at the close of business on the Regular Record
Date. "REGULAR RECORD DATE" for such interest shall be the fifteenth calendar
day (whether or not a Business Day) immediately preceding such Interest Payment
Date. Notwithstanding the foregoing, if this Note is issued after a Regular
Record Date and prior to an Interest Payment Date, the record date for such
Interest Payment Date shall be the original issue date.
2. METHOD OF PAYMENT
Holdings shall pay interest on the Notes (except defaulted interest) to
the Persons who are registered holders of Notes at the close of business on the
March 15 or September 15 next preceding the Interest Payment Date even if Notes
are canceled after the record date and on or before the Interest Payment Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
Holdings shall pay principal and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. Holdings will, unless such payment is made in PIK Notes, make all
money payments in respect of a certificated Note (including principal and
interest), by mailing a check to the registered
-------------------------
1 This form is also to be used for PIK Notes issued in payment of interest on
Exchange Notes.
Page 20
address of each Holder thereof; PROVIDED, HOWEVER, that money payments on the
Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount at maturity of Notes, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Holdings shall maintain an office or agency, which shall be located in
the Borough of Manhattan, The City of New York, where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR") and an office or
agency where Notes may be presented for payment (the "PAYING AGENT"). Initially,
Chase Manhattan Bank and Trust Company, National Association, a national banking
association organized under the federal laws of the United States (the
"TRUSTEE"), will act as Paying Agent and Registrar. Holdings may appoint and
change any Paying Agent, Registrar or co-registrar without notice. Holdings or
any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar or co-registrar.
4. INDENTURE
Holdings issued the Notes under an Indenture, dated as of September 20,
2000 (the "INDENTURE"), by and between Holdings and the Trustee. The terms of
the Notes 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. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and used but not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all terms and
provisions of the Indenture, and Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Notes are senior unsecured obligations of Holdings limited to
$100,000,000 aggregate principal amount at any one time outstanding, plus the
amount of any PIK Notes issued (subject to SECTION 2.07 of the Indenture). This
Note is one of the Exchange Notes referred to in the Indenture issued in an
aggregate principal amount of $100,000,000. The Notes include the Exchange Notes
issued in exchange for Initial Notes and PIK Notes. The Initial Notes, the PIK
Notes and the Exchange Notes are treated as a single class of Notes under the
Indenture. The Indenture imposes certain limitations on the ability of Holdings
and its Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Subsidiaries, issue or sell shares of Capital Stock of
such Subsidiaries, enter into or permit certain transactions with Affiliates and
make asset sales. The Indenture also imposes limitations on the ability of
Holdings to
Page 21
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of the property of Holdings.
5. OPTIONAL REDEMPTION
The Notes are subject to redemption, at the election of Holdings, upon
not less than ten (10) nor more than sixty (60) days' notice by mail (each
prepayment must relate to an aggregate principal amount of Notes of at least $5
million):
(i) At any time prior to the second anniversary of the
Closing Date, up to 35% of the aggregate principal amount of the Notes
may be prepaid from the proceeds of an Equity Offering of Common Stock
of Holdings at a price of 110% of the principal amount thereof plus
accrued interest; provided that, after giving effect to any such
prepayment, at least 65% of the original principal amount of the Notes
issued on the Closing Date, plus all PIK Notes issued in lieu of cash
interest thereon remains outstanding;
(ii) at any time on or after the second anniversary of the
Closing Date and prior to the third anniversary of the Closing Date, the
entire aggregate principal amount of the Notes then outstanding may be
prepaid concurrently with the consummation of an Equity Offering of
Common Stock of Holdings or a Change of Control at a price of 110% of
the principal amount plus accrued interest;
(iii) prepayment of the notes will be permitted in whole
or in part, at any time on or after the third anniversary of the Closing
Date at the following Redemption Prices at the prices listed below
(expressed as a percentage of the principal amount of the Notes being
prepaid as of the Redemption Date) plus accrued interest to the date of
prepayment:
Redemption Date Redemption Price
September 20, 2003 - September 19, 2006 107.50%
September 20, 2006 - September 19, 2007 106.20%
September 20, 2007 - September 19, 2008 104.65%
September 20, 2008 - September 19, 2009 103.10%
September 20, 2009 and thereafter 101.55%
Page 22
6. SINKING FUND; SPECIAL MANDATORY REDEMPTION
(a) The Notes are not subject to any sinking fund.
(b) If the aggregate amount which would be includible in gross income
for federal income tax purposes with respect to the Notes before any Interest
Payment Date occurring after the fifth (5th) anniversary of the Closing Date
(the "AGGREGATE INCLUSION") exceeds an amount equal to the sum of (x) the
aggregate amount of interest paid in cash under the Notes before such Interest
Payment Date and (y) the product of the issue price of all of the Notes (as
determined under United States Treasury Regulation Section 1.1273-2(a))
multiplied by 17.25% (the sum of (x) and (y), the "ADJUSTED ACTUAL PAYMENT"),
Holdings shall, on such Interest Payment Date, make a mandatory redemption (any
such redemption a "SPECIAL MANDATORY REDEMPTION") of the Notes, without premium,
to the extent that the Aggregate Inclusion exceeds the Adjusted Actual Payment.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed by first-class mail at least 10 days
but not more than 60 days before the Redemption Date to each Holder of Notes to
be redeemed at such Holder's registered address. Notes in denominations larger
than $1,000 (in principal amount at maturity) may be redeemed in part but only
in multiples of $1,000 (in principal amount at maturity). If money sufficient to
pay the redemption price of and accrued and unpaid interest on all Notes (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, cash interest ceases to accrue on such Notes
(or such portions thereof) called for redemption.
8. REPURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL AND
SALE OF ASSETS
Upon the occurrence of a Change of Control, each Holder of Notes shall have the
right, subject to certain conditions specified in the Indenture, to require
Holdings to repurchase all or any part of the Notes of such Holder at a purchase
price in cash equal to 101% of the principal amount of the Notes to be
repurchased, plus accrued and unpaid interest thereon and Special Interest, if
any, in respect thereof to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due and
Special Interest, if any, on the relevant Interest Payment Date) as provided in,
and subject to the terms of, the Indenture.
In accordance with SECTION 4.10 of the Indenture, Holdings will be
required to offer to purchase Notes upon the occurrence of certain sales of
assets.
9. RESTRICTIONS ON PAYMENT OF SPECIAL MANDATORY REDEMPTION
Any payment in connection with a Special Mandatory Redemption is subject
to the restrictions of SECTION 7.12 of the Indenture.
Page 23
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in denominations of
$1,000 (in principal amount at maturity) and multiples thereof. PIK Notes, if
any, may be in registered form in any whole dollar amount. A Holder may transfer
or exchange Initial Notes in accordance with the Indenture. Upon any 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. Holdings shall not be
required to make and the Registrar need not register transfers or exchanges of
Notes selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes for a period of
15 days prior to a selection of Notes to be redeemed.
11. PERSONS DEEMED OWNERS
Except as provided in paragraph 2 hereof, the registered Holder of this
Note shall be treated as the owner of it for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal of or interest on the Notes has
been deposited with the Trustee or Paying Agent and remains unclaimed for two
years after such amount is due and payable, the Trustee or Paying Agent shall
pay the money back to Holdings at its written request unless an abandoned
property law designates another Person. After any such payment, the Trustee and
the Paying Agent shall have no further liability for such funds and Holders
entitled to the money must look only to the recipient and not to the Trustee for
payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, Holdings at any time may terminate some
of or all its obligations under the Notes and the Indenture if Holdings deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Notes to redemption or maturity, as the case
may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Notes may be amended without prior notice to any Holder but
with the written consent of the Holders of at least a majority in principal
amount at maturity of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange for the Notes) and (b) any default
may be waived with the written consent of the Holders of at least a majority in
principal amount at maturity of the outstanding Notes. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Notes, Holdings and the Trustee may amend the Indenture or the Notes (a) to cure
any ambiguity, omission, defect or inconsistency; (b) to provide for
uncertificated Notes in addition to or in place of certificated Notes (PROVIDED,
HOWEVER, that the uncertificated Notes are issued in registered form for
purposes of Section
Page 24
163(f) of the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code); (c) to add to the covenants of
Holdings for the benefit of the Holders or to surrender any right or power
conferred on Holdings in the Indenture; (d) to comply with any requirement of
the Commission in connection with qualifying, or maintaining the qualification
of, the Indenture under the TIA; (e) to make any change that does not adversely
affect the rights of any Holder; (f) to provide for the issuance of the Exchange
Notes which shall have terms substantially identical in all material respects to
the Initial Notes (except that the transfer restrictions contained in the
Initial Notes shall be modified or eliminated, as appropriate), and which shall
be treated, together with any outstanding Initial Notes and any PIK Notes issued
in payment of interest on the Initial Notes or the Exchange Notes, as a single
issue of securities; or (g) to change the name or title of the Notes.
15. DEFAULTS, REMEDIES AND ACCELERATION
If an Event of Default (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of Holdings or the
Company) occurs and is continuing, the Trustee or the Holders of (i) until a
Note Registration, more than 50% in principal amount of the Notes at the time
outstanding, and (ii) thereafter, 25% or more in principal amount at maturity of
the outstanding Notes may declare the principal of and accrued but unpaid
interest on all the Notes to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of Holdings or the Company occurs, the principal of and interest on all the
Notes shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders. Under certain
circumstances, the Holders of a majority in principal amount at maturity of the
Notes may rescind any such acceleration with respect to the Notes and its
consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders have offered
to the Trustee reasonable indemnity or security against any loss, liability or
expense. Except to enforce the right to receive payment of principal or interest
when due, no Holder may pursue any remedy with respect to the Indenture or the
Notes unless (i) such Holder has previously given to the Trustee written notice
stating that an Event of Default is continuing, (ii) Holders of at least 25% in
principal amount at maturity of the outstanding Notes have requested the Trustee
in writing to pursue the remedy, (iii) such Holder or Holders have offered to
the Trustee reasonable security or indemnity against any loss, liability or
expense, (iv) the Trustee has not complied with such request within 60 days
after receipt of the request and the offer of security or indemnity and (v) the
Holders of a majority in principal amount at maturity of the outstanding Notes
have not given the Trustee a direction inconsistent with such request during
such 60-day period. Subject to certain restrictions, the Holders of a majority
in principal amount at maturity of the outstanding Notes are given the right to
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. The Trustee, however, may refuse to
Page 25
follow any direction that conflicts with law or the Indenture or, subject to
certain exceptions in the Indenture, that the Trustee determines is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability. Prior to taking any action under the Indenture, 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.
16. TRUSTEE DEALINGS WITH HOLDINGS
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by Holdings or its Affiliates and may otherwise deal with Holdings or its
Affiliates with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of Holdings or
any of the Subsidiaries shall not have any liability for any obligations of
Holdings or any of the Subsidiaries under the Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
18. AUTHENTICATION
This Note 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 Note.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW
THIS NOTE 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.
Page 26
21. CUSIP NUMBERS
Holdings has caused CUSIP numbers to be printed on the Notes and has
directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
HOLDINGS WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF
THIS NOTE.
Page 27
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books
of Holdings. The agent may substitute another to act for him.
------------------------------------------------------------
Date: ________________ Your Signature: _____________________
------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
Page 28
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY HOLDINGS PURSUANT TO
SECTION 4.09 (CHANGE OF CONTROL) OR SECTION 4.10 (APPLICATION OF EXCESS PROCEEDS
FROM SALE OF ASSETS) OF THE INDENTURE, CHECK THE BOX:
[ ]
LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK CHANGE OF CONTROL
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED BY
HOLDINGS PURSUANT TO SECTION 4.09 OR 4.10 OF THE INDENTURE, STATE THE PRINCIPAL
AMOUNT AT MATURITY ($1,000 OR A MULTIPLE THEREOF):
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE NOTE)
SIGNATURE GUARANTEE:________________________________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE
Page 29
VETERINARY CENTERS OF AMERICA, INC.
Senior Notes due 2010
INDENTURE
Dated as of September 20, 2000
Chase Manhattan Bank and Trust Company, National Association,
Trustee
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS.................................................1
SECTION 1.01. DEFINITIONS...............................................................1
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........................20
SECTION 1.03. RULES OF CONSTRUCTION....................................................21
ARTICLE 2. THE NOTES.......................................................................22
SECTION 2.01. FORM AND DATING..........................................................22
SECTION 2.02. EXECUTION AND AUTHENTICATION.............................................22
SECTION 2.03. REGISTRAR AND PAYING AGENT...............................................23
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST......................................23
SECTION 2.05. HOLDER LISTS.............................................................23
SECTION 2.06. TRANSFER AND EXCHANGE....................................................24
SECTION 2.07. REPLACEMENT NOTES........................................................24
SECTION 2.08. OUTSTANDING NOTES........................................................25
SECTION 2.09. TEMPORARY NOTES..........................................................25
SECTION 2.10. CANCELLATION.............................................................25
SECTION 2.11. DEFAULTED INTEREST.......................................................26
SECTION 2.12. CUSIP NUMBERS............................................................26
ARTICLE 3. REDEMPTION......................................................................26
SECTION 3.01. NOTICES TO TRUSTEE.......................................................26
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED........................................27
SECTION 3.03. NOTICE OF REDEMPTION.....................................................27
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION...........................................28
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE..............................................28
SECTION 3.06. NOTES REDEEMED IN PART...................................................28
ARTICLE 4. AFFIRMATIVE COVENANTS...........................................................28
SECTION 4.01. PAYMENT OF NOTES.........................................................28
SECTION 4.02. COMMISSION REPORTS.......................................................29
SECTION 4.03. PRESERVATION OF CORPORATE EXISTENCE......................................29
SECTION 4.04. MAINTENANCE OF PROPERTIES................................................29
SECTION 4.05. TAXES....................................................................29
SECTION 4.06. COMPLIANCE CERTIFICATE...................................................30
SECTION 4.07. COMPLIANCE WITH LAW......................................................30
SECTION 4.08. INSURANCE................................................................30
SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL...............................30
SECTION 4.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS......................32
SECTION 4.11. FURTHER ASSURANCES.......................................................33
ARTICLE 5. NEGATIVE COVENANTS APPLICABLE TO HOLDINGS AND ITS SUBSIDIARIES..................33
SECTION 5.01. STAY, EXTENSION AND USURY LAWS...........................................33
SECTION 5.02. RESTRICTED PAYMENTS......................................................33
SECTION 5.03. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES...........36
SECTION 5.04. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED CAPITAL
STOCK OR PREFERRED STOCK.................................................37
SECTION 5.05. ASSET DISPOSITIONS.......................................................41
SECTION 5.06. TRANSACTIONS WITH AFFILIATES.............................................43
SECTION 5.07. LIMITATION ON LIENS......................................................44
SECTION 5.08. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF SUBSIDIARIES.......44
SECTION 5.09. SALES AND LEASEBACK TRANSACTIONS.........................................45
SECTION 5.10. CONDUCT OF BUSINESS......................................................45
ARTICLE 6. COVENANTS APPLICABLE TO HOLDINGS................................................45
SECTION 6.01. BUSINESS ACTIVITIES OF HOLDINGS..........................................45
SECTION 6.02. MERGER, CONSOLIDATION, OR SALES OF ASSETS OF HOLDINGS....................46
ARTICLE 7. EVENTS OF DEFAULT; REMEDIES.....................................................47
SECTION 7.01. EVENTS OF DEFAULT........................................................47
SECTION 7.02. ACCELERATION.............................................................48
SECTION 7.03. OTHER REMEDIES...........................................................49
SECTION 7.04. WAIVER OF PAST DEFAULTS..................................................50
SECTION 7.05. CONTROL BY MAJORITY......................................................50
SECTION 7.06. LIMITATION ON SUITS......................................................50
SECTION 7.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.....................................51
SECTION 7.08. COLLECTION SUIT BY TRUSTEE...............................................51
SECTION 7.09. TRUSTEE MAY FILE PROOFS OF CLAIM.........................................51
SECTION 7.10. PRIORITIES...............................................................51
SECTION 7.11. UNDERTAKING FOR COSTS....................................................52
SECTION 7.12. SUBORDINATION OF SPECIAL MANDATORY REDEMPTION............................52
ARTICLE 8. TRUSTEE.........................................................................53
SECTION 8.01. DUTIES OF TRUSTEE........................................................53
SECTION 8.02. RIGHTS OF TRUSTEE........................................................54
SECTION 8.03. INDIVIDUAL RIGHTS OF TRUSTEE.............................................55
SECTION 8.04. TRUSTEE'S DISCLAIMER.....................................................55
SECTION 8.05. NOTICE OF DEFAULTS.......................................................56
SECTION 8.06. REPORTS BY TRUSTEE TO HOLDERS............................................56
SECTION 8.07. COMPENSATION AND INDEMNITY...............................................56
SECTION 8.08. REPLACEMENT OF TRUSTEE...................................................57
SECTION 8.09. SUCCESSOR TRUSTEE BY MERGER..............................................58
SECTION 8.10. ELIGIBILITY; DISQUALIFICATION............................................58
SECTION 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST HOLDINGS.......................59
ARTICLE 9. DISCHARGE OF INDENTURE; DEFEASANCE..............................................59
SECTION 9.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE..............................59
SECTION 9.02. CONDITIONS TO DEFEASANCE.................................................60
SECTION 9.03. APPLICATION OF TRUST MONEY...............................................61
SECTION 9.04. REPAYMENT TO HOLDINGS....................................................61
SECTION 9.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.....................................61
SECTION 9.06. REINSTATEMENT............................................................61
ARTICLE 10. AMENDMENTS.....................................................................62
SECTION 10.01. WITHOUT CONSENT OF HOLDERS...............................................62
SECTION 10.02. WITH CONSENT OF HOLDERS..................................................62
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT......................................63
SECTION 10.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS............................63
SECTION 10.05. NOTATION ON OR EXCHANGE OF NOTES.........................................64
SECTION 10.06. TRUSTEE TO SIGN AMENDMENTS...............................................64
ARTICLE 11. MISCELLANEOUS..................................................................64
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.............................................64
SECTION 11.02. NOTICES..................................................................64
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS..............................66
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.......................66
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............................66
SECTION 11.06. WHEN NOTES DISREGARDED...................................................66
SECTION 11.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.............................67
SECTION 11.08. LEGAL HOLIDAYS...........................................................67
SECTION 11.09. GOVERNING LAW............................................................67
SECTION 11.10. NO RECOURSE AGAINST OTHERS...............................................67
SECTION 11.11. SUCCESSORS...............................................................67
SECTION 11.12. MULTIPLE ORIGINALS; COUNTERPARTS.........................................67
SECTION 11.13. TABLE OF CONTENTS; HEADINGS..............................................67
SECTION 11.14. INCORPORATION............................................................67
SECTION 11.15. INTENT TO LIMIT INTEREST TO MAXIMUM......................................67
Appendix A Provisions Relating to the Initial Notes and the Exchange Notes
EXHIBITS:
Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note
SCHEDULES:
Schedule 5.06 - Affiliate Transactions
