EXHIBIT 4.1
VANGUARD HEALTH SYSTEMS, INC.,
Issuer
and
the GUARANTORS named herein,
Guarantors
and
BANK ONE TRUST COMPANY, N.A.,
Trustee
-------------------
Indenture
Dated as of July 30, 2001
-------------------
$300,000,000
9-3/4% Senior Subordinated Notes due 2011
CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
------------ ------------------
Section 310(a)(1) 7.10
(b) 7.03; 7.08
Section 311(a) 7.03
(b) 7.03
Section 312(a) 2.04
(b) 12.02
(c) 12.02
Section 313(a) 7.06
(b)(2) 7.07
(c) 7.05; 7.06; 12.02
(d) 7.06
Section 316(a) 6.06
Section 313(a) 7.02
(b) 7.02
(c) 7.02
(d) 7.02
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions....................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.............23
Section 1.03. Rules of Construction.........................................23
ARTICLE II
THE NOTES
Section 2.01. Form and Dating...............................................24
Section 2.02. Restrictive Legends...........................................25
Section 2.03. Execution, Authentication and Denominations...................28
Section 2.04. Registrar and Paying Agent....................................28
Section 2.05. Paying Agent to Hold Money in Trust...........................29
Section 2.06. Transfer and Exchange.........................................29
Section 2.07. Book-Entry Provisions for Global Notes........................30
Section 2.08. Special Transfer Provisions...................................32
Section 2.09. Replacement Notes.............................................35
Section 2.10. Outstanding Notes.............................................35
Section 2.11. Temporary Notes...............................................36
Section 2.12. Cancellation..................................................36
Section 2.13. CUSIP Numbers.................................................36
Section 2.14. Defaulted Interest............................................36
Section 2.15. Issuance of Additional Notes..................................37
ARTICLE III
REDEMPTION
Section 3.01. Right of Redemption...........................................37
Section 3.02. Notices to Trustee............................................37
Section 3.03. Selection of Notes to Be Redeemed.............................38
Section 3.04. Notice of Redemption..........................................38
Section 3.05. Effect of Notice of Redemption................................39
Section 3.06. Deposit of Redemption Price...................................39
Section 3.07. Payment of Notes Called for Redemption........................39
Section 3.08. Notes Redeemed in Part........................................40
Section 3.09. Mandatory Redemption..........................................40
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ARTICLE IV
COVENANTS
Section 4.01. Payment of Notes..............................................40
Section 4.02. Maintenance of Office or Agency...............................40
Section 4.03. Limitation on Indebtedness....................................41
Section 4.04. Limitation on Restricted Payments.............................44
Section 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.............................47
Section 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries.......................................48
Section 4.07. Guarantees by Restricted Subsidiaries.........................48
Section 4.08. Limitation on Transactions with Affiliates....................49
Section 4.09. Limitation on Liens...........................................50
Section 4.10. Limitation on Asset Sales.....................................52
Section 4.11. Designation of Restricted and Unrestricted Subsidiaries.......53
Section 4.12. Repurchase of Notes upon a Change of Control..................54
Section 4.13. Existence.....................................................54
Section 4.14. Payment of Taxes..............................................55
Section 4.15. Notice of Defaults............................................55
Section 4.16. Compliance Certificates.......................................55
Section 4.17. Commission Reports and Reports to Holders.....................55
Section 4.18. Waiver of Stay, Extension or Usury Laws.......................56
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01. When Company or Guarantors May Merge, Etc.....................56
Section 5.02. Successor Substituted.........................................57
ARTICLE VI
DEFAULT AND REMEDIES
Section 6.01. Events of Default.............................................58
Section 6.02. Acceleration..................................................59
Section 6.03. Other Remedies................................................60
Section 6.04. Waiver of Past Defaults.......................................60
Section 6.05. Control by Majority...........................................60
Section 6.06. Limitation on Suits...........................................60
Section 6.07. Rights of Holders to Receive Payment..........................61
Section 6.08. Collection Suit by Trustee....................................61
Section 6.09. Trustee May File Proofs of Claim..............................61
Section 6.10. Priorities....................................................62
Section 6.11. Undertaking for Costs.........................................62
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Section 6.12. Restoration of Rights and Remedies............................62
Section 6.13. Rights and Remedies Cumulative................................63
Section 6.14. Delay or Omission Not Waiver..................................63
ARTICLE VII
TRUSTEE
Section 7.01. General.......................................................63
Section 7.02. Certain Rights of Trustee.....................................63
Section 7.03. Individual Rights of Trustee..................................64
Section 7.04. Trustee's Disclaimer..........................................64
Section 7.05. Notice of Default.............................................65
Section 7.06. Reports by Trustee to Holders.................................65
Section 7.07. Compensation and Indemnity....................................65
Section 7.08. Replacement of Trustee........................................66
Section 7.09. Successor Trustee by Merger, Etc..............................67
Section 7.10. Eligibility...................................................67
Section 7.11. Money Held in Trust...........................................67
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations..........................67
Section 8.02. Defeasance and Discharge of Indenture.........................68
Section 8.03. Defeasance of Certain Covenants and Events of Default.........70
Section 8.04. Application of Trust Money....................................72
Section 8.05. Repayment to Company..........................................72
Section 8.06. Reinstatement.................................................72
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders....................................73
Section 9.02. With Consent of Holders.......................................73
Section 9.03. Revocation and Effect of Consent..............................75
Section 9.04. Notation on or Exchange of Notes..............................75
Section 9.05. Trustee to Sign Amendments, Etc...............................75
Section 9.06. Conformity with Trust Indenture Act...........................76
ARTICLE X
GUARANTEE OF NOTES
Section 10.01. Note Guarantee................................................76
Section 10.02. Obligations Unconditional.....................................78
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Section 10.03. Release of Note Guarantees....................................78
ARTICLE XI
SUBORDINATION OF NOTES
Section 11.01. Agreement to Subordinate......................................79
Section 11.02. Liquidation; Dissolution; Bankruptcy..........................79
Section 11.03. Default on Designated Senior Indebtedness.....................80
Section 11.04. Acceleration of Notes.........................................81
Section 11.05. Notice by Company.............................................82
Section 11.06. Subrogation...................................................82
Section 11.07. Relative Rights...............................................82
Section 11.08. Subordination May Not Be Impaired by Company..................83
Section 11.09. Distribution or Notice to Representative......................83
Section 11.10. Rights of Trustee and Paying Agent............................84
Section 11.11. Authorization to Effect Subordination.........................84
Section 11.12. Amendments....................................................84
ARTICLE XII
SUBORDINATION OF NOTE GUARANTEES
Section 12.01. Agreement to Subordinate......................................85
Section 12.02. Liquidation; Dissolution; Bankruptcy..........................85
Section 12.03. Default on Designated Senior Indebtedness.....................86
Section 12.04. Acceleration of Notes.........................................87
Section 12.05. Notice by Company or Guarantors...............................87
Section 12.06. Subrogation...................................................88
Section 12.07. Relative Rights...............................................88
Section 12.08. Subordination May Not Be Impaired by any Guarantor............89
Section 12.09. Distribution or Notice to Representative......................89
Section 12.10. Rights of Trustee and Paying Agent............................89
Section 12.11. Authorization to Effect Subordination.........................90
Section 12.12. Amendments....................................................90
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Trust Indenture Act of 1939...................................90
Section 13.02. Notices.......................................................91
Section 13.03. Certificate and Opinion as to Conditions Precedent............92
Section 13.04. Statements Required in Certificate or Opinion.................92
Section 13.05. Rules by Trustee, Paying Agent or Registrar...................92
Section 13.06. Payment Date Other Than a Business Day........................93
Section 13.07. Governing Law.................................................93
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Section 13.08. No Adverse Interpretation of Other Agreements.................93
Section 13.09. No Recourse Against Others....................................93
Section 13.10. Successors....................................................93
Section 13.11. Duplicate Originals...........................................93
Section 13.12. Separability..................................................93
Section 13.13. Table of Contents, Headings, Etc..............................93
EXHIBIT A Form of Note.......................................................A-1
EXHIBIT B Form of Certificate................................................B-1
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Non-QIB Accredited Investors...........................C-1
EXHIBIT D Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S...........................................D-1
EXHIBIT E Form of Supplemental Indenture.....................................E-1
EXHIBIT F Form of Senior Subordinated Note Guarantee.........................F-1
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INDENTURE, dated as of July 30, 2001 by and among VANGUARD HEALTH SYSTEMS,
INC., a Delaware corporation (the "Company"), the Guarantors (as defined
herein), and BANK ONE TRUST COMPANY, N.A., a national banking corporation,
trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $300,000,000 aggregate
principal amount of the Company's 9-3/4% Senior Notes due 2011 (the "Notes")
issuable as provided in this Indenture. All things necessary to make this
Indenture a valid agreement of the Company and each Guarantor, in accordance
with its terms, have been done, and the Company and each Guarantor have done
all things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or Indebtedness of a
Restricted Subsidiary assumed in connection with an Asset Acquisition by such
Restricted Subsidiary; provided that such Indebtedness was not Incurred in
connection with or in contemplation of such Person becoming a Restricted
Subsidiary or such Asset Acquisition.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication):
(i) the net income (or loss) of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of its Restricted
Subsidiaries during such period;
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(ii) the net income (or loss) of any Person accrued prior to the date
as of which it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or any of its Restricted Subsidiaries or all
or substantially all of the property and assets of such Person are
acquired by the Company or any of its Restricted Subsidiaries;
(iii) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable to
sales of assets outside the ordinary course of business of the Company and
its Restricted Subsidiaries;
(v) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04, any amount paid or accrued as dividends on Preferred Stock
of the Company owned by Persons other than the Company and any of its
Restricted Subsidiaries;
(vi) all extraordinary gains and extraordinary losses (each an
after-tax basis);
(vii) the cumulative effect of a change in accounting principles; and
(viii) income or losses attributable to discontinued operations,
including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; provided that
beneficial ownership of 10% or more of the Capital Stock of a Person shall be
deemed to be control. Notwithstanding the foregoing, a Person shall not be
deemed an Affiliate of the Company solely by virtue of the beneficial ownership
by the MSCP Group of 10% or more of the Capital Stock of such Person.
"Agent" means any Registrar, Co-Registrar, Paying Agent or authenticating
agent.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries or (ii) an acquisition by the
Company or any of its Restricted Subsidiaries
2
of the property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of: (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Company or any of its
Restricted Subsidiaries outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each of clauses (i) through (iii) above,
that is not governed by Article V of this Indenture; provided that "Asset Sale"
shall not include (a) sales or other dispositions of inventory, receivables,
cash management and portfolio investments and other current assets, (b) sales,
transfers or other dispositions of assets constituting a Permitted Investment
or a Restricted Payment permitted to be made under Section 4.04, (c) sales,
transfers or other dispositions of assets (in any transaction or series of
related transactions) with a fair market value not in excess of the greater of
(x) $1.0 million and (y) 1% of Consolidated EBITDA on a pro forma basis for the
most recently completed four fiscal quarters, when such sale, transfer or
disposition is consummated, (d) any sale, transfer, assignment or other
disposition of any property or equipment that has become damaged, worn out,
obsolete or otherwise unsuitable for use in connection with the business of the
Company or its Restricted Subsidiaries, (e) the substantially contemporaneous
sale and leaseback of an asset; provided that the sale and leaseback occurs
within 180 days after the date of the acquisition of the asset by the Company
or any Restricted Subsidiary, (f) a Hospital Swap, (g) any disposition of
receivables and related assets, proceeds, or Capital Stock of a Securitization
Subsidiary pursuant to a Permitted Receivables Financing, or (h) any
disposition or leases of substantially unimproved real property, pursuant to an
overall arrangement deemed by the management of the Company to be fair and
reasonable, for the purpose of building on such real property a medical office
building or other building to contain a healthcare business, or any parking
garage or other structure used in connection with such a building.
"Average Life" means, at any date of determination with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bank Agent" means the agent for the lenders under the Credit Agreement or
its successors as agent for the lenders under the Credit Agreement.
3
"Benefit Plan" means (a) an employee benefit plan (as defined in Section
3(3) of Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
that is subject to Title I of ERISA, (b) a plan (as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code")) that
is subject to Section 4975 of the Code, or (c) an entity whose underlying
assets include assets of a plan described in (a) or (b) by reason of a plan's
investment in such entities.
"Board of Directors" means, with respect to any Person, the Board of
Directors such Person or any duly authorized committee of such Board of
Directors.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York or Phoenix, Arizona are
authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
"Change of Control" means such time as the following shall occur: (i) the
consummation of any transaction, including, without limitation, any merger or
consolidation, the result of which is that any "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than the
Existing Stockholders, becomes the ultimate "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of Voting Stock representing more than 50%
of the total voting power of the Voting Stock of the Company on a fully diluted
basis; (ii) the direct or indirect sale, transfer, conveyance or other
disposition, not including a merger or consolidation, in one or a series of
related transactions, of all or substantially all of the properties or assets
of the Company and its Restricted Subsidiaries taken as a whole to any "person"
or "group" (as those terms are defined in clause (i) above), other than to the
Existing Stockholders; (iii) the adoption of a plan relating to the liquidation
or dissolution of the Company; or (iv) during any consecutive two year period,
individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors (a) appointed or nominated by one or
more Existing Stockholders or (b) whose election by the Board of Directors or
whose nomination by the Board of Directors for election by the Company's
stockholders was approved by a vote of at least a majority of the members of
the Board of Directors then in office who either were members of the Board of
Directors on the
4
Closing Date or whose election or nomination for election was previously so
approved) cease for any reason during such period to constitute a majority of
the members of the Board of Directors then in office.
"Clearstream" means Clearstream Banking, S.A.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"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 TIA, then the body performing such duties
at such time.
"Commodity Agreement" means any forward contract, commodity swap
agreement, commodity option agreement or other similar agreement or
arrangement.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article V of this Indenture
and thereafter means the successor.
"Company Order" means a written request or order signed in the name of the
Company (i) by its Chairman, a Vice Chairman, its President or a Vice President
and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers or directors
listed in clause (i) above in lieu of being signed by one of such officers or
directors listed in such clause (i) and one of the officers listed in clause
(ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income: (i) Consolidated Interest
Expense, (ii) income taxes, (iii) depreciation expense, (iv) amortization
expense and (v) all other non-cash items reducing Adjusted Consolidated Net
Income (except to the extent that such non-cash items will require cash
payments and for which an accrual or reserve is, or is required by GAAP to be,
made), less all non-cash items increasing Adjusted Consolidated Net Income
except to the extent such non-cash items will result in cash receipts, all as
determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions,
5
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing; the net cash costs associated with Interest Rate
Agreements during such period; the interest of the Company and its Restricted
Subsidiaries that was capitalized during such period; and interest in respect
of Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries but only to the extent such interest is paid by the
Company or any Restricted Subsidiary; but excluding any amortization of fees
and expenses in connection with the issuance of the Notes, the Credit Agreement
or any other Indebtedness Incurred after the Closing Date) and all but the
principal component of rentals in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Restricted Subsidiaries during such period; all net of the cash portion of
interest income of the Company and its Restricted Subsidiaries for such period;
excluding, however, (i) any interest expense not payable in cash by its terms,
other than amortization of original issue discount and (ii) any amount of such
interest of any Restricted Subsidiary if the net income of such Restricted
Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income
pursuant to clause (iii) of the definition thereof (but only in the same
proportion as the net income of such Restricted Subsidiary is excluded from the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof).
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted
Subsidiaries (which shall be as of a date not more than 90 days prior to the
date of such computation) plus, to the extent not included, any Preferred Stock
of the Company, less any amounts attributable to Disqualified Stock or any
equity security convertible into or exchangeable for Indebtedness, the cost of
treasury stock and the principal amount of any promissory notes receivable from
the sale of the Capital Stock of the Company or any of its Restricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding the
effects of foreign currency exchange adjustments under Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 00 Xxxx Xxxxxx, 0xx Xxxxx, Window 0, Xxx Xxxx, Xxx Xxxx 00000;
Attention: Corporate Trust Department.
"Credit Agreement" means the Credit Agreement among the Company, the
lenders, agents and co-agents (and joint lead arrangers and book managers) from
time to time party thereto and Bank of America, N.A., as Administrative Agent,
dated as of July 30, 2001, together with all agreements, notes, instruments and
documents executed or delivered pursuant thereto and in connection therewith,
including, without limitation, all mortgages, other security documents and
guarantees, in each case as amended (including any amendment and restatement),
supplemented, extended, renewed, replaced (by one or more credit facilities,
debt instruments and/or related documentation) or otherwise modified from time
to time including, without limitation, any agreement increasing the amount of,
extending the maturity of or refinancing (in whole or in part) (including, but
not limited to, by the inclusion of additional or different lenders thereunder
or additional borrowers or guarantors thereof) all or any portion of the
Indebtedness under such agreement or any successor agreement or agreements and
whether by the same or any other agent, lender or group of lenders.
6
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Designated Senior Indebtedness" means (i) any Indebtedness under the
Credit Agreement (except that any Indebtedness which represents a partial
refinancing of Indebtedness theretofore outstanding pursuant to the Credit
Agreement, rather than a complete refinancing thereof, shall only constitute
Designated Senior Indebtedness if such partial refinancing meets the
requirements of clause (ii) below), and (ii) any other Indebtedness
constituting Senior Indebtedness that, at the date of determination, has an
aggregate principal amount outstanding of at least $25 million and that is
specifically designated by the Company, in the instrument creating or
evidencing such Senior Indebtedness, as "Designated Senior Indebtedness."
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes for consideration other than Capital Stock
that is not required to be redeemed, (ii) required to be redeemed at the option
of the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Notes for consideration other than Capital Stock that is
not required to be redeemed or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity or any scheduled amortization prior to the Stated Maturity
of the Notes; provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Notes shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
contained in Section 4.10 and Section 4.12 and such Capital Stock specifically
provides that such Person will not repurchase or redeem any such stock pursuant
to such provision prior to the Company's repurchase of such Notes as are
required to be repurchased pursuant to Section 4.10 and Section 4.12.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
system.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities
7
Act) that are issued and exchanged for the Notes pursuant to the Registration
Rights Agreement and this Indenture.
"Existing Stockholders" means (i) each of the officers of the Company on
the Closing Date holding the office of Executive Vice President or a higher
office or (ii) the MSCP Group.
"fair market value" means the price that would be paid in an arm's-length
transaction between a willing seller under no compulsion to sell and a willing
buyer under no compulsion to buy. Any determination of "fair market value" made
in good faith by the Board of Directors shall be conclusive if evidenced by a
Board Resolution.
"Foreign Subsidiary" means any Subsidiary of the Company that is an entity
which is a controlled foreign corporation under Section 957 of the Internal
Revenue Code.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations contained or referred to in
this Indenture shall be computed in conformity with GAAP applied on a
consistent basis (except as expressly required by GAAP), except that
calculations made for purposes of determining compliance with the terms of the
covenants and with other provisions of this Indenture shall be made without
giving effect to (i) the amortization of any expenses incurred in connection
with the offering of the Notes and the Credit Agreement and (ii) except as
otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means any Initial Guarantor and any other Restricted
Subsidiary which provides a Note Guarantee of the Company's obligations under
this Indenture and the Notes pursuant to Section 4.07, subject to Section
10.03, and any successor to such Guarantor.
8
"Holder" or "Noteholder" means the registered holder of any Note.
"Hospital Swap" means an exchange of assets and, to the extent necessary
to equalize the value of the assets being exchanged, cash by the Company or a
Restricted Subsidiary for one or more hospitals and/or one or more businesses
related or ancillary to the business of the Company, or for 100% of the Capital
Stock of any Person owning or operating one or more hospitals and/or one or
more such related businesses; provided that the amount of cash does not exceed
20% of the sum of the amount of the cash and the fair market value of the
Capital Stock or assets received or given by the Company or a Restricted
Subsidiary in the transaction, unless such excess cash is applied in accordance
with the requirements of the third paragraph of Section 4.10.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for the payment of, contingently
or otherwise, such Indebtedness; provided that (i) any Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary will be deemed
to be incurred by such Restricted Subsidiary at the time that it becomes a
Restricted Subsidiary and (ii) none of the accrual or capitalization of
interest (whether through the issuance of pay-in-kind securities or otherwise),
the accretion of original issue discount or the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(i) all indebtedness of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto, but excluding obligations with respect to letters of
credit (including trade letters of credit) securing obligations (other
than obligations described in (i) or (ii) above or (v) or (vi) below)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the 15th day following
receipt by such Person of a demand for reimbursement);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services if,
and to the extent that, such amount would appear as a liability on the
balance sheet of such Person, except Trade Payables and other accrued
expenses arising in the ordinary course of business and payable within one
year of the Incurrence thereof;
(v) all Capitalized Lease Obligations;
9
(vi) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser
of (a) the fair market value of such asset at such date of determination
and (b) the amount of such Indebtedness;
(vii) all Indebtedness of other Persons Guaranteed by such Person to
the extent such Indebtedness is Guaranteed by such Person; and
(viii) to the extent not otherwise included in this definition,
obligations under Commodity Agreements, Currency Agreements and Interest
Rate Agreements (other than, except for the purposes of the definition of
Senior Indebtedness, Commodity Agreements, Currency Agreements and
Interest Rate Agreements designed to protect the Company or its Restricted
Subsidiaries against fluctuations in commodity prices, foreign currency
exchange rates or interest rates and that do not increase the Indebtedness
of the obligor outstanding at any time other than as a result of
fluctuations in commodity prices, foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation payable
thereunder).
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; provided that
(A) the amount outstanding at any time of any Indebtedness issued
with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP,
(B) money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to pre-fund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such
money is held to secure the payment of such interest,
(C) the amount of any Indebtedness secured by a Lien on an asset of
such Person but not otherwise the obligation, contingent or otherwise, of
such Person, shall be the lesser of (x) the fair market value of such
asset on the date the Lien attached and (y) the amount of such
Indebtedness,
(D) the amount of any Indebtedness under any Commodity Agreement,
Currency Agreement or Interest Rate Agreement that is Indebtedness shall
be the net amount payable by such Person if such agreement were terminated
at that time, and
(E) Indebtedness shall not include:
(x) any liability for federal, state, local or other taxes,
(y) performance, surety or appeal bonds provided in the ordinary
course of business or
10
(z) agreements providing for indemnification, adjustment of
purchase price or similar obligations, or Guarantees or letters of
credit, surety bonds or performance bonds securing any obligations of
the Company or any of its Restricted Subsidiaries pursuant to such
agreements, in any case Incurred in connection with the disposition
of any business, assets or Restricted Subsidiary (other than
Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary for the
purpose of financing such acquisition), so long as the principal
amount does not exceed the gross proceeds actually received by the
Company or any Restricted Subsidiary in connection with such
disposition.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Initial Guarantors" means each Restricted Subsidiary of the Company
listed on the signature pages hereto as a "Guarantor."
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Insurance Subsidiary" means a Subsidiary of the Company or any Restricted
Subsidiary established for the purpose of insuring the health care businesses
or facilities owned or operated by the Company or any Subsidiary or any
physician employed by or on the medical staff of any such business or facility.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio of (i)
the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been
filed with the Commission or provided to the Trustee (the "Four Quarter
Period") to (ii) the aggregate Consolidated Interest Expense during such Four
Quarter Period. In making the foregoing calculation, (A) pro forma effect shall
be given to any Indebtedness Incurred or repaid during the period (the
"Reference Period") commencing on the first day of the Four Quarter Period and
ending on the Transaction Date (other than Indebtedness Incurred or repaid
under a revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement)
in effect on the last day of such Four Quarter Period unless any portion of
such Indebtedness is projected, in the reasonable judgment of the senior
management of the Company, to remain outstanding for a period in excess of 12
months from the date of the Incurrence thereof), in each case as if such
Indebtedness had been Incurred or repaid on the first day of such Reference
Period; (B) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma basis
and bearing a floating interest rate shall be computed as if the rate in effect
on the Transaction Date (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the remaining
term of such Indebtedness) had been the applicable rate for the entire period;
(C) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to (x) the application of
proceeds of any Asset Disposition and (y) any
11
pro forma expense and cost reductions and other operating improvements that
have occurred or are reasonably expected to occur, in the reasonable judgement
of the chief financial officer of the Company, attributable to the assets which
are the subject of the Asset Acquisition) that occur during such Reference
Period as if they had occurred and such proceeds had been applied on the first
day of such Reference Period; (D) pro forma effect shall be given to asset
dispositions and asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition) that have been made during
such Reference Period by any Person that has become a Restricted Subsidiary or
has been merged with or into the Company or any Restricted Subsidiary during
such Reference Period and that would have constituted Asset Dispositions or
Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period; provided that, to the extent that clause (C) or (D) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based upon the four full
fiscal quarters immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed for
which financial information is available; (E) the Consolidated EBITDA
attributable to discontinued operations, as determined in accordance with GAAP,
shall be excluded; and (F) the Consolidated Interest Expense attributable to
discontinued operations, as determined in accordance with GAAP, shall be
excluded, but only to the extent that the obligations giving rise to the
Consolidated Interest Expense will not be obligations of the Company or any of
its Restricted Subsidiaries following the Transaction Date.
"Interest Payment Date" means each semiannual interest payment date on
February 1 and August 1 of each year, commencing February 1, 2002.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Company or its Restricted Subsidiaries and endorsements for collection or
deposit arising in the ordinary course of business) or capital contribution to
(by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, bonds, notes, debentures or other similar
instruments issued by, such Person and shall include (i) the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the retention of
the Capital Stock (or any other Investment) by the Company or any of its
Restricted Subsidiaries of (or in) any Person that has ceased to be a
Restricted Subsidiary, including without limitation, by reason of any
transaction permitted by clause (iii) of Section 4.06. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.04, (a) the amount of or
a reduction in an Investment shall be equal to the fair market value thereof at
the time such Investment is made or reduced and (b) in the event the Company or
a Restricted Subsidiary makes an Investment by transferring assets to any
Person and as part of such transaction receives Net Cash Proceeds, the amount
of
12
such Investment shall be the fair market value of the assets less the amount of
Net Cash Proceeds so received, provided that the Net Cash Proceeds are applied
in accordance with clause (A) or (B) of the third paragraph of Section 4.10.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof).
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"MSCP Group" means Xxxxxx Xxxxxxx Capital Partners III, L.P., MSCP III 892
Investors, L.P., Xxxxxx Xxxxxxx Capital Investors, L.P., Xxxxxx Xxxxxxx Xxxx
Xxxxxx Capital Partners IV, L.P., MSDW IV 892 Investors, L.P. and Xxxxxx
Xxxxxxx Xxxx Xxxxxx Capital Investors IV, L.P., or any other merchant banking
or similar fund under common control with any of the aforementioned entities.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, the proceeds of such Asset Sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form
of cash or cash equivalents and proceeds from the conversion of other
property received when converted to cash or cash equivalents, net of (i)
brokerage commissions and other fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale;
(ii) provisions for all taxes (whether or not such taxes will actually be
paid or are payable) as a result of such Asset Sale without regard to the
consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole; (iii) payments made to repay Indebtedness
or any other obligation outstanding at the time of such Asset Sale that
either (x) is secured by a Lien on the property or assets sold or (y) is
required to be paid as a result of such sale; (iv) payments required to be
made to holders of minority interests in Restricted Subsidiaries as a
result of such Asset Sale; and (v) appropriate amounts to be provided by
the Company or any Restricted Subsidiary as a reserve against any
liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as
determined in conformity with GAAP; and
(b) with respect to any issuance or sale of Capital Stock, or
contribution to capital, the proceeds of such issuance, sale or
contribution in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to
the principal, but not interest, component thereof) when received in the
form of cash or cash equivalents and proceeds from the conversion of other
property received when converted to cash or cash equivalents, net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
13
"Non-U.S. Person" means a person who is not a "U.S. person" (as defined in
Regulation S).
"Note Document" shall mean the Notes, any Note Guarantee, this Indenture
and any other document or instrument entered into in connection with the
issuance of the Notes (including without limitation any registration rights
agreement or similar agreement).
"Note Guarantee" means any Guarantee of the obligations of the Company
under this Indenture and the Notes by any Guarantor.
"Notes" means any of the securities, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include the Notes
initially issued on the Closing Date, any Exchange Notes to be issued and
exchanged for any Notes pursuant to the Registration Rights Agreement and this
Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating:
(1) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata
basis;
(2) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date");
(3) that any Note not tendered will continue to accrue interest
pursuant to its terms;
(4) that, unless the Company defaults in the payment of the purchase
price, any Note accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest on and after the Payment Date;
(5) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with
the form entitled "Option of the Holder to Elect Purchase" on the reverse
side of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Notes delivered for purchase and a statement that such
Holder is withdrawing his election to have such Notes purchased; and
14
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in a principal amount of $1,000 or integral multiples of
$1,000.
On the Payment Date, the Company shall (a) accept for payment on a pro rata
basis Notes or portions thereof tendered pursuant to an Offer to Purchase; (b)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted; and (c) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof accepted
for payment by the Company. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Note equal
in principal amount to any unpurchased portion of the Note surrendered;
provided that each Note purchased and each new Note issued shall be in a
principal amount of $1,000 or integral multiples of $1,000. The Company shall
publicly announce the results of an Offer to Purchase as soon as practicable
after the Payment Date. The Trustee shall act as the Paying Agent for an Offer
to Purchase. The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable, in the event that the Company is required
to repurchase Notes pursuant to an Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, any Vice President or the Chief Financial Officer, and (ii) the
Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii)
of the definition thereof or two officers listed in clause (i) of the
definition thereof. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel
reasonably acceptable to the Trustee, who may be an employee of or counsel to
the Company, that meets the requirements of Section 13.04. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"Pari Passu Indebtedness" has the meaning provided in Section 4.10.
"Paying Agent" has the meaning provided in Section 2.04, except that, for
the purposes of Article VIII, the Paying Agent shall not be the Company or a
Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes its successors and assigns and any additional Paying Agent.
"Payment Date" has the meaning provided in the definition of Offer to
Purchase.
"Permanent Regulation S Global Notes" has the meaning provided in Section
2.01.
15
"Permitted Investment" means:
(i) an Investment in the Company or a Restricted Subsidiary or a
person which will, upon the making of such Investment, become a Restricted
Subsidiary or be merged or consolidated with or into or transfer or convey
all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided that such person's primary business is related,
ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment;
(ii) Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction of
judgments;
(v) an Investment in an Unrestricted Subsidiary consisting solely of
an Investment in another Unrestricted Subsidiary;
(vi) Commodity Agreements, Interest Rate Agreements and Currency
Agreements designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in commodity prices, interest rates or
foreign currency exchange rates;
(vii) loans and advances to officers and employees made in the
ordinary course of business of not more than $5 million in the aggregate
at any one time outstanding, which are made in compliance with Section
4.08;
(viii) Investments by the Company or a Guarantor made in connection
with Hospital Swaps;
(ix) Physician Support Obligations made by the Company or a
Guarantor;
(x) any Investments to the extent that the consideration therefor is
Capital Stock (other than Disqualified Stock), or warrants, options or
other rights to purchase Capital Stock (other than Disqualified Stock or
Indebtedness convertible into Capital Stock);
(xi) shares of Capital Stock or other securities received in
settlement of any Indebtedness or other obligation owed to the Company or
any Restricted Subsidiary as a result of foreclosure, perfection or
enforcement of any Lien, Indebtedness or other obligation or in connection
with any good faith settlement of a bankruptcy proceeding;
(xii) Investments in a Securitization Subsidiary in connection with
and to facilitate any Permitted Receivables Financing, which Investments
are customary for such transactions;
(xiii) in the event an Insurance Subsidiary is established,
Investments in such Insurance Subsidiary in an amount which does not
exceed the minimum amount of capital required under the laws of the
jurisdiction in which such Insurance Subsidiary is
16
formed, and any Investment by such Insurance Subsidiary which is a legal
investment for an insurance company under the laws of the jurisdiction in
which the Insurance Subsidiary is formed and made in the ordinary course
of business and rated in one of the four highest rating categories;
(xiv) Investments represented by accounts receivable created or
acquired in the ordinary course of business;
(xv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the Section 4.10; and
(xvi) Investments made solely in reliance on this clause in an amount
not to exceed, at any one time outstanding, the greater of (x) $30 million
and (y) 3% of the Total Assets of the Company at the time the Investment
is made.
"Permitted Receivables Financing" means any receivables financing facility
or arrangement pursuant to which a Securitization Subsidiary purchases or
otherwise acquires accounts receivable of the Company and any Restricted
Subsidiary and enters into a third party financing thereof on terms that the
Board of Directors has concluded are customary and market terms, fair to the
Company and its Restricted Subsidiaries.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or agency or political subdivision
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of indebtedness of (i) a physician or healthcare professional
providing service to patients in the service area of a hospital or other health
care facility operated by the Company or any of its Subsidiaries made or given
by the Company or any Subsidiary of the Company, or (ii) any independent
practice association or other entity majority-owned by any Person described in
clause (i), in each case: (a) in the ordinary course of its business; and (b)
pursuant to a written agreement having a period not to exceed five years.
"PIK Preferred Stock" means the Payable-in-Kind Convertible Redeemable
Preferred Stock of the Company.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
outstanding on the Closing Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"Principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
17
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Refinanced Indebtedness" has the meaning provided in Section 4.03.
"Registrar" has the meaning provided in Section 2.04.
"Registration" has the meaning provided in Section 4.17.
"Registration Rights Agreement" means the registration rights agreement
among the Company, the Guarantors, Xxxxxx Xxxxxxx & Co. Incorporated, Bank of
America Securities LLC, Credit Suisse First Boston Corporation, UBS Warburg LLC
and First Union Securities, Inc. dated July 30, 2001.
"Registration Statement" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" has the meaning provided in Section 2.01.
"Regulation S Physical Notes" has the meaning provided in Section 2.01.
"Replacement Assets" means, on any date, property or assets (other than
current assets) of a nature or type or that are used in a business (or an
Investment in a company having property or assets of a nature or type, or
engaged in a business) similar, related, ancillary or complementary to the
nature or type of the property and assets of, or the business of, the Company
and its Restricted Subsidiaries existing on such date.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee in its Corporate Trust Office with direct responsibility
for the administration of this Indenture 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.
"Restricted Global Notes" has the meaning provided in Section 2.01.
18
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Physical Notes" means the Notes issued in the form of
permanent certificated Notes in registered form in substantially the form set
forth in Exhibit A to Institutional Accredited Investors which are not QIBs
(excluding Non-U.S. Persons).
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx
Companies, and its successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Subsidiary" means a Subsidiary of the Company
(i) that is designated a "Securitization Subsidiary" by the Board of
Directors;
(ii) that does not engage in, and whose charter prohibits it from
engaging in, any activities other than Permitted Receivables Financing and
any activity necessary or incidental thereto;
(iii) no portion of the Indebtedness or any other obligation,
contingent or otherwise, of which
(A) is Guaranteed by the Company or any other Restricted
Subsidiary,
(B) is recourse to or obligates the Company or any other
Restricted Subsidiary in any way, or
(C) subjects any property or asset of the Company or any other
Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof; and
(iv) with respect to which neither the Company nor any Restricted
Subsidiary has any obligation to maintain or preserve its financial
condition or cause it to achieve certain levels of operating results;
other than, in respect of clauses (iii) and (iv), pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Permitted Receivables Financing.
"Security Register" has the meaning provided in Section 2.04.
"Senior Indebtedness" means the following obligations of the Company or
any Guarantor, whether outstanding on the Closing Date or thereafter Incurred:
(i) all Indebtedness and all other monetary obligations (including, without
limitation, expenses, fees, principal,
19
premium, interest (in each case, including any interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law), reimbursement obligations under letters of credit
and indemnities payable in connection therewith) under (or in respect of) the
Credit Agreement or any Commodity Agreement, Interest Rate Agreement or
Currency Agreement and (ii) all Indebtedness and all other monetary obligations
of the Company or any Guarantor (other than the Notes and any Note Guarantee),
including principal, premium, and interest (in each case, including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on such Indebtedness,
unless such Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, is expressly made
pari passu with, or subordinated in right of payment to, the Notes or any Note
Guarantee; provided that the term "Senior Indebtedness" shall not include (a)
any Indebtedness of the Company or any Guarantor to a Subsidiary of the
Company, or to a joint venture in which the Company or any Restricted
Subsidiary has an interest, (b) that portion of any Indebtedness of the Company
or any Guarantor Incurred in violation of Section 4.03 (but, as to any such
Indebtedness under the Credit Agreement, no such violation shall be deemed to
exist for purposes of this clause (b) if the holder(s) of such Indebtedness or
their representative shall have received a certificate from an officer of the
Company to the effect that the Incurrence of such Indebtedness does not or, in
the case of revolving credit Indebtedness that the Incurrence of the entire
committed amount thereof at the date on the initial borrowing thereunder is
made, would not, violate such provisions of the Indenture), (c) any repurchase,
redemption or other obligation in respect of Disqualified Stock, (d) any
Indebtedness to any employee of the Company or any of its Subsidiaries, (e) any
liability for taxes owed or owing by the Company or any Guarantor or (f) any
Trade Payables.
"Senior Subordinated Obligations" means any principal of, premium, if any,
and interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and any other amounts owing with respect to, the Notes
payable pursuant to the terms of the Notes, any Note Guarantee or any other
Note Document or upon acceleration, including any amounts received upon the
exercise of rights of rescission or other rights of action (including claims
for damages) or otherwise, to the extent relating to the purchase price of the
Notes or amounts corresponding to such principal, premium, if any, or interest
on the Notes.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
20
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock or more than 50% of the equity ownership is
owned, directly or indirectly, by such Person and one or more other
Subsidiaries of such Person or a partnership the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such
Person.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United
States of America or any agency thereof, in each case maturing within one
year from the date of the acquisition thereof;
(ii) time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess
of $100 million (or the foreign currency equivalent thereof);
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank or trust company meeting the qualifications described in
clause (ii) above;
(iv) commercial paper, maturing not more than one year after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-2" (or higher) according to Xxxxx'x or "A-2" (or
higher) according to S & P;
(v) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or Xxxxx'x; and
(vi) any mutual fund that has at least 95% of its assets continuously
invested in investments of the types described in clauses (i) through (v)
above.
"Temporary Regulation S Global Notes" has the meaning provided in Section
2.01.
21
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S. Code Sections 77aaa-77bbbb), as in effect on the date this Indenture was
executed, except as provided in Section 9.06.
"Total Assets" of the Company means the total consolidated assets of the
Company and its Restricted Subsidiaries as shown on the most recent balance
sheet of the Company.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness, the date such Indebtedness is to be Incurred and, with respect to
any Restricted Payment, the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article VII of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means any Subsidiary of the Company that at the
time of determination has previously been designated, and continues to be, an
Unrestricted Subsidiary in accordance with Section 4.11.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof at any time
prior to the Stated Maturity of the Notes, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
22
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Common Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated
by applicable law) by such Person or one or more Wholly Owned Subsidiaries of
such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
23
ARTICLE II
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate of
authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company or the Guarantors are subject or usage. The Company shall approve the
form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture. To the extent applicable, the Company, each Guarantor and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent Global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Restricted Global
Notes"), registered in the name of the nominee of the Depositary, deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, in accordance with the
instructions given by the Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on Regulation
S shall be issued initially in the form of one or more temporary Global Notes
in registered form substantially in the form set forth in Exhibit A (the
"Temporary Regulation S Global Notes"), registered in the name of the nominee
of the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. At any time on or after September 8, 2001, upon receipt
by the Trustee and the Company of a certificate substantially in the form of
Exhibit B hereto, one or more permanent global Notes in registered form
substantially in the form set forth in Exhibit A (the "Permanent Regulation S
Global Notes"; and together with the Temporary Regulation S Global Notes, the
"Regulation S Global Notes") duly executed by the Company and authenticated by
the Trustee as hereinafter provided shall be deposited with the Trustee, as
custodian for the Depositary or its nominee, and the Registrar shall reflect on
its books and records the date and a decrease in the principal amount of the
Temporary Regulation S Global Notes in an amount equal to the principal amount
of the beneficial interest in the Temporary Regulation S Global Notes
transferred.
Notes transferred to Institutional Accredited Investors pursuant to
Section 2.08(a) of this Indenture shall be issued in the form of permanent
certificated Notes in registered form in substantially the form set forth in
Exhibit A (the "Restricted Physical Notes"). Notes issued pursuant to Section
2.07 in exchange for interests in the Regulation S Global Notes shall be in
24
the form of permanent certificated Notes in registered form substantially in
the form set forth in Exhibit A (the "Regulation S Physical Notes").
The Regulation S Physical Notes and Restricted Physical Notes are
sometimes collectively herein referred to as the "Physical Notes." The
Restricted Global Notes and the Regulation S Global Notes are sometimes
referred to herein as the "Global Notes."
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is exchanged
for an Exchange Note or sold in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, (i) the Restricted
Global Notes and Restricted Physical Notes shall bear the legend set forth
below on the face thereof, (ii) the Regulation S Physical Notes, until at least
the 41st day after the Closing Date and receipt by the Company and the Trustee
of a certificate substantially in the form of Exhibit B hereto, and the
Temporary Regulation S Global Notes shall bear the legend set forth below on
the face thereof and (iii) the Company shall have obtained a CUSIP or CINS
number (if then generally in use) with respect to the unlegended Regulation S
Physical Note or Regulation S Global Note, as the case may be.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO VANGUARD HEALTH SYSTEMS, INC. OR ANY OF
ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO
AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
25
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE),
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO VANGUARD HEALTH
SYSTEMS, INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k)
UNDER THE SECURITIES ACT AFTER THE ORIGINAL ISSUANCE OF THE NOTES, THE
HOLDER MUST TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR NON-U.S.
PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
AND VANGUARD HEALTH SYSTEMS, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS PROVISIONS REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF
THE FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN THE NAME OF SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE
26
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
The Temporary Regulation S Global Note shall also bear a legend in
substantially the following form:
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
Each Physical Note shall also bear the following legend on the face
thereof:
THE TRANSFER OF THIS NOTE SHALL NOT BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE HAS REPRESENTED IN WRITING TO THE TRUSTEE THAT EITHER (I) IT IS
NOT (A) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS
SUBJECT TO TITLE I OF ERISA, (B) A PLAN (AS DEFINED IN SECTION 4975(E)(1)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS
SUBJECT TO SECTION 4975 OF THE CODE, OR (C) AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE ASSETS OF A PLAN DESCRIBED IN (A) OR (B) BY REASON OF A
PLAN'S INVESTMENT IN SUCH ENTITIES (EACH A "BENEFIT PLAN") AND IS NOT
ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A BENEFIT PLAN OR (II) ITS
ACQUISITION AND HOLDING OF THIS NOTE WILL BE COVERED BY A U.S. DEPARTMENT
OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION.
Each Global Note shall also bear the following legend on the face thereof:
ANY PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN THIS GLOBAL NOTE WITH
THE ASSETS OF A BENEFIT PLAN SHALL BE DEEMED TO REPRESENT THAT ITS
ACQUISITION AND HOLDING OF SUCH BENEFICIAL INTEREST IS COVERED BY A U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION.
27
SECTION 2.03. Execution, Authentication and Denominations. Subject to
Article Four and applicable law, the aggregate principal amount of Notes which
may be authenticated and delivered under this Indenture is unlimited. The Notes
shall be executed by any Officer of the Company. The signature of such Officer
on the Notes may be by facsimile or manual signature in the name and on behalf
of the Company.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a Company Order
authenticate for original issue Notes in the aggregate principal amount
specified in such Company Order; provided that the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Company in
connection with such authentication of Notes. Such Company Order shall specify
the amount of Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated and, in case of an issuance of Notes
pursuant to Section 2.15, shall certify that such issuance is in compliance
with Article IV.
The Trustee may appoint an authenticating agent to authenticate Notes. 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 authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or the Guarantors or an
Affiliate of the Company or the Guarantors.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be
presented for payment (the "Paying Agent") and an office or agency where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served, which shall be in the Borough of Manhattan, the City
of New York. The Company shall cause the Registrar to keep a register of the
Notes and of their transfer and exchange (the "Security Register"). The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Company may have one
or more co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Company shall appoint the Trustee to act as, and the Trustee shall act as, such
Registrar, Paying
28
Agent and/or agent for service of notices and demands. The Company may remove
any Agent upon written notice to such Agent and the Trustee; provided that no
such removal shall become effective until (i) the acceptance of an appointment
by a successor Agent to such Agent as evidenced by an appropriate agency
agreement entered into by the Company and such successor Agent and delivered to
the Trustee or (ii) notification to the Trustee that the Trustee shall serve as
such Agent until the appointment of a successor Agent in accordance with clause
(i) of this proviso. The Company, any Subsidiary of the Company, or any
Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar,
and/or agent for service of notice and demands.
The Company hereby initially appoints the Trustee as Registrar, Paying
Agent and authenticating agent. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee as
of each Regular Record Date and at such other times as the Trustee may
reasonably request the names and addresses of Holders as they appear in the
Security Register, including the aggregate principal amount of Notes held by
each Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than 11:00
a.m. (New York City time) on each due date of the principal, premium, if any,
and interest on any Notes, the Company shall deposit with the Paying Agent
money in immediately available funds sufficient to pay such principal, premium,
if any, and interest so becoming due. The Company shall require each Paying
Agent other than the Trustee to agree in writing that such Paying Agent shall
hold in trust for the benefit of the Holders or the Trustee all money held by
the Paying Agent for the payment of principal of, premium, if any, and interest
on the Notes (whether such money has been paid to it by the Company or any
other obligor on the Notes), and such Paying Agent shall promptly notify the
Trustee of any default by the Company (or any other obligor on the Notes) in
making any such payment. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and account for any funds disbursed,
and the Trustee may at any time during the continuance of any payment default,
upon written request to a Paying Agent, require such Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed. Upon
doing so, the Paying Agent shall have no further liability for the money so
paid over to the Trustee. If the Company or any Subsidiary of the Company or
any Affiliate of any of them acts as Paying Agent, it will, on or before each
due date of any principal of, premium, if any, or interest on the Notes,
segregate and hold in a separate trust fund for the benefit of the Holders a
sum of money sufficient to pay such principal, premium, if any, or interest so
becoming due until such sum of money shall be paid to such Holders or otherwise
disposed of as provided in this Indenture, and will promptly notify the Trustee
of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
registered form. A Holder may transfer a Note only by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Registrar in the
Security Register. Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee, and any agent of the Company shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue,
29
and neither the Company, the Trustee, nor any such agent shall be affected by
notice to the contrary. Furthermore, any Holder of a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Note may be effected only through a book entry system maintained by
the Holder of such Global Note (or its agent) and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry. When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations (including an exchange of
Notes for Exchange Notes), the Registrar shall register the transfer or make
the exchange as requested if its requirements for such transactions are met
(including that such Notes are duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and Registrar duly
executed by the Holder thereof or by an attorney who is authorized in writing
to act on behalf of the Holder); provided that no exchanges of Notes for
Exchange Notes shall occur until a Registration Statement shall have been
declared effective by the Commission and that any Notes that are exchanged for
Exchange Notes shall be cancelled by the Trustee. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request. No service charge shall be made
for any registration of transfer or exchange or redemption of the Notes, but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than any
such transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.11, 3.08, 4.10, 4.12 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. The Restricted
Global Notes and Regulation S Global Notes initially shall (i) be registered in
the name of the Depositary for such Global Notes or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 2.02.
(a) Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in Global Notes may
be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 2.08. In addition, Restricted Physical
30
Notes and Regulation S Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Restricted Global
Notes or the Regulation S Global Notes, as the case may be, if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Restricted Global Notes or the Regulation S Global Notes, as
the case may be, and a successor depositary is not appointed by the Company
within 90 days of such notice, (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depositary
or (iii) in accordance with the rules and procedures of the Depositary and the
provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global
Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in such other Global Note and, accordingly, will thereafter
be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of such Global Note in an amount
equal to the principal amount of the beneficial interest in such Global Note to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Restricted Physical Notes or Regulation S
Physical Notes, as the case may be, of like tenor and amount.
(e) In connection with the transfer of the Restricted Global Notes or the
Regulation S Global Notes, in whole, to beneficial owners pursuant to paragraph
(b) of this Section 2.07, the Restricted Global Notes or Regulation S Global
Notes, as the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the Restricted Global Notes or Regulation S
Global Notes, as the case may be, an equal aggregate principal amount of
Restricted Physical Notes or Regulation S Physical Notes, as the case may be,
of authorized denominations.
(f) Any Restricted Physical Note delivered in exchange for an interest in
the Restricted Global Notes pursuant to paragraph (b), (d) or (e) of this
Section 2.07 shall, except as otherwise provided by paragraph (f) of Section
2.08, bear the legend regarding transfer restrictions applicable to the
Restricted Physical Note set forth in Section 2.02.
(g) Any Regulation S Physical Note delivered in exchange for an interest
in the Regulation S Global Notes pursuant to paragraph (b), (d) or (e) of this
Section 2.07 shall, except as otherwise provided by paragraph (f) of Section
2.08, bear the legend regarding transfer restrictions applicable to the
Regulation S Physical Note set forth in Section 2.02.
(h) The registered holder of a Global 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.
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SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed
transfer of a Note to any Institutional Accredited Investor which is not a QIB
(excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act or (y) the proposed transferee has delivered to the
Registrar (A) a certificate substantially in the form of Exhibit C hereto
and (B) if the aggregate principal amount of the Notes being transferred
is less than $100,000, an Opinion of Counsel acceptable to the Company
that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Restricted Global Notes, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) above
and (y) instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Restricted
Global Notes in an amount equal to the principal amount of the beneficial
interest in the Restricted Global Notes to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Restricted Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note to a QIB (excluding
Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) either Regulation S
Physical Notes prior to the removal of the Private Placement Legend or
Restricted Physical Notes, the Registrar shall register the transfer if
such transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the 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 QIB within the meaning of Rule 144A and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A or (y) an interest in the Restricted Global Notes, the
transfer of such interest may be effected only through the book entry
system maintained by the Depositary.
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(ii) If the proposed transferee is an Agent Member, and the Note to
be transferred consists of Restricted Physical Notes, upon receipt by the
Registrar of the documents referred to in paragraph (i) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of Restricted Global Notes in an
amount equal to the principal amount of the Restricted Physical Notes to
be transferred, and the Trustee shall cancel the Restricted Physical Notes
so transferred.
(c) Transfers of Interests in the Temporary Regulation S Global Notes. The
following provisions shall apply with respect to registration of any proposed
transfer of an interest in a Temporary Regulation S Global Notes:
(i) The Registrar shall register the transfer of any Note (x) if the
proposed transferee is a Non-U.S. Person and the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the 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 QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor
is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Restricted Global Notes in
an amount equal to the principal amount of the Temporary Regulation S
Global Notes to be transferred, and the Trustee shall decrease the amount
of the Temporary Regulation S Global Notes.
(d) Transfers of Interests in the Permanent Regulation S Global Notes or
Unlegended Regulation S Physical Notes. The following provisions shall apply
with respect to any transfer of interests in Permanent Regulation S Global
Notes or unlegended Regulation S Physical Notes. The Registrar shall register
the transfer of any such Note without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any ransfer of a Note to a Non-U.S. Person:
33
(i) Prior to September 8, 2001, the Registrar shall register any
proposed transfer of a Note to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit D hereto from the
proposed transferor.
(ii) On and after September 8, 2001, the Registrar shall register any
proposed transfer to any Non-U.S. Person if the Note to be transferred is
a Restricted Physical Note or an interest in Restricted Global Notes, upon
receipt of a certificate substantially in the form of Exhibit D hereto
from the proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the Restricted Global Notes, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the Restricted Global Notes in
an amount equal to the principal amount of the beneficial interest in the
Restricted Global Notes to be transferred, and (b) if the proposed
transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Regulation S Global Notes
in an amount equal to the principal amount of the Restricted Physical
Notes or the Restricted Global Notes, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Note, if any, so
transferred or decrease the amount of the Restricted Global Notes.
(f) Transfers to Benefit Plans. The transfer of a Physical Note shall not
be registered unless the prospective transferee has represented in writing to
the Registrar that either (i) it is not a Benefit Plan and is not acting on
behalf of or investing the assets of a Benefit Plan or (ii) its acquisition and
holding of the Physical Note will be covered by a U.S. Department of Labor
prohibited transaction class exemption. Any person that acquires a beneficial
interest in a Global Note with the assets of a Benefit Plan shall be deemed to
represent to the Registrar that its acquisition and holding of such beneficial
interest is covered by a U.S. Department of Labor prohibited transaction class
exemption.
(g) Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
registration of transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend unless (i) the Private Placement Legend is no longer required
by Section 2.02, (ii) the circumstances contemplated by paragraph (a)(i)(x) of
this Section 2.08 exist or (iii) there is delivered to the Registrar an Opinion
of Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(h) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Registrar shall not register a transfer of any Note
34
unless such transfer complies with the restrictions on transfer of such Note
set forth in this Indenture. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar or the
Company such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act; provided that the Registrar
shall not be required to determine (but may rely on a determination made by the
Company with respect to) the sufficiency of any such certifications, legal
opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company, at its sole cost and expense, shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered to the
Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of written notice to the Company or the
Trustee that such Note has been acquired by a protected purchaser, the Company
shall issue and the Trustee shall authenticate a replacement Note of like tenor
and principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.09 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and each
Guarantor and shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a protected purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of its
Affiliates holds such Note, provided, however, that in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
any request, demand,
35
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes which the Trustee has actual knowledge to be so owned shall
be so disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of definitive Notes but may have insertions, substitutions, omissions and
other variations determined to be appropriate by the Officers executing the
temporary Notes, as evidenced by their execution of such temporary Notes. If
temporary Notes are issued, the Company will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender
of the temporary Notes at the office or agency of the Company designated for
such purpose pursuant to Section 4.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall be entitled to the
same benefits under this Indenture as definitive Notes.
SECTION 2.12. Cancellation. The Company, at any time, may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and shall destroy them in accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP," "CINS" or "ISIN" numbers (if then generally in use), and the Company
and the Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; provided that
any such notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption or exchange and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in "CUSIP," "CINS" or "ISIN" numbers
for the Notes.
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment of
interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
36
defaulted interest, shall mean the 15th day next preceding the date fixed by
the Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15. Issuance of Additional Notes. The Company may, subject to
Article IV of this Indenture and applicable law, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
ARTICLE III
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes are redeemable, at the
Company's option, in whole or in part, at any time or from time to time, on or
after August 1, 2006 and prior to maturity, upon not less than 30 nor more than
60 days' prior notice mailed by first-class mail to each Holder's last address,
as it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount), plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date that is prior to the Redemption Date to
receive interest due on an Interest Payment Date), if redeemed during the
12-month period commencing August 1 of the years set forth below:
Redemption
Year Price
------------------------ ----------
2006 ................... 104.875%
2007 ................... 103.250%
2008 ................... 101.625%
2009 and thereafter .... 100.000%
(b) In addition, at any time prior to August 1, 2004, the Company may
redeem up to 35% of the aggregate principal amount of the Notes with the Net
Cash Proceeds of one or more sales of Capital Stock of the Company (other than
Disqualified Stock) at a Redemption Price (expressed as a percentage of
principal amount) of 109.750%, plus accrued and unpaid interest to the
Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest
due on an Interest Payment Date); provided that (i) at least 65% of the
aggregate principal amount of Notes originally issued on the Closing Date
remains outstanding after each such redemption and (ii) notice of such
redemption is mailed within 90 days after each such sale of Capital Stock.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem Notes
pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the
37
principal amount of Notes to be redeemed and the clause of this Indenture
pursuant to which redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in an
Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the
Company, of the principal national securities exchange or automated quotation
system, if any, on which the Notes are listed or, if the Notes are not listed
on a national securities exchange or automated quotation system, on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided that no Note of $1,000 in principal
amount or less shall be redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 in principal amount or any integral multiple thereof)
of Notes that have denominations larger than $1,000 in principal amount.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company and the Registrar promptly in writing of the Notes or portions of Notes
to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is
to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
38
(vi) if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at any
time prior to the time at which the Trustee shall have given such notice to the
Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
SECTION 3.05. 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. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to 11:00 a.m., New
York City time, on any Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company is acting as its own Paying Agent, shall
segregate and hold in trust as provided in Section 2.05) money sufficient to
pay the Redemption Price of and accrued interest on all Notes to be redeemed on
that date other than Notes or portions thereof called for redemption on that
date that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless
the Company shall default in the payment of such Notes or portion of Notes at
the Redemption Price and accrued interest to the Redemption Date, in which case
the principal, until paid, shall bear interest from the Redemption Date at the
rate prescribed in the Notes), such Notes or portion of Notes shall cease to
accrue interest. Upon surrender of any Note or portion of Notes for redemption
in accordance with a notice of redemption, such Note or portion of Notes shall
be paid and redeemed by the Company at the Redemption Price, together
39
with accrued interest, if any, to the Redemption Date; provided that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders registered as such at the close of
business on the relevant Regular Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge, a new Note equal in principal
amount to the unredeemed portion of such surrendered Note.
SECTION 3.09. Mandatory Redemption. Except as provided in Section 4.10 and
Section 4.12, the Company is not required to make mandatory redemption of, or
sinking fund payments with respect to, the Notes.
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If the Company or any Subsidiary of the
Company or any Affiliate of any of them acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due
date if the entity acting as Paying Agent complies with the last sentence of
Section 2.05. As provided in Section 6.09, upon any bankruptcy or
reorganization procedure relative to the Company, the Trustee shall serve as
the sole Paying Agent for the Notes.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan, the City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in
Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the
00
Xxxxxxx xx Xxxxxxxxx, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates Bank One Trust Company, N.A., a
national banking corporation, 00 Xxxx Xxxxxx, 0xx Xxxxx, Window 0, Xxx Xxxx,
Xxx Xxxx 00000, the Corporate Trust Office of the Trustee, as such office of
the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(other than the Notes, the Note Guarantees and other Indebtedness existing on
the Closing Date); provided that the Company or any Guarantor may Incur
Indebtedness, and any Restricted Subsidiary may Incur Acquired Indebtedness,
if, after giving effect to the Incurrence of such Indebtedness and the receipt
and application of the proceeds therefrom, the Interest Coverage Ratio would be
greater than 2.0:1.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness of the Company or any Guarantor under the Credit
Agreement outstanding at any time in an aggregate principal amount not to
exceed the greater of (A) $150 million, less any amount of such
Indebtedness permanently repaid as provided under Section 4.10 and (B) the
amount equal to the sum of (x) 85% of the net book value of the accounts
receivable of the Company and its Restricted Subsidiaries and (y) 75% of
the net book value of the inventory of the Company and its Restricted
Subsidiaries, in each case on a consolidated basis, determined in
accordance with GAAP as of the date such Indebtedness is incurred;
(ii) Indebtedness owed (A) to the Company or any Guarantor evidenced
by an unsubordinated promissory note or (B) to any other Restricted
Subsidiary; provided that, in the case of Indebtedness described in clause
(B), (x) any event which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute an Incurrence of such
Indebtedness not permitted by this clause (ii) and (y) if the Company or
any Guarantor is the obligor on such Indebtedness, such Indebtedness,
other than Indebtedness represented by short-term, open account working
capital notes entered into in the ordinary course of business for cash
management purposes and consistent with past practice, must be expressly
subordinated in right of payment to the Notes, in the case of the Company,
or the Note Guarantee, in the case of a Guarantor;
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance, refund, defease or renew other then
outstanding Indebtedness (the "Refinanced Indebtedness") (other than
Indebtedness outstanding under clause (ii) or (v)) in an amount not to
exceed the amount of the Refinanced Indebtedness (plus premiums, accrued
interest, fees, costs and expenses incurred in connection with any such
41
refinancing, refunding, defeasance or renewal); provided that (A) if the
Refinanced Indebtedness is the Notes or other Indebtedness that is pari
passu with, or subordinated in right of payment to, the Notes or a Note
Guarantee, such Refinanced Indebtedness shall only be permitted under this
clause (iii) if (x) in case the Notes are refinanced in part or the
Refinanced Indebtedness is pari passu with the Notes or a Note Guarantee,
such new Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding, is
expressly made pari passu with, or subordinate in right of payment to, the
remaining Notes or the Note Guarantee, or (y) in case the Refinanced
Indebtedness is subordinated in right of payment to the Notes or a Note
Guarantee, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is issued
or remains outstanding, is expressly made subordinate in right of payment
to the Notes or a Note Guarantee on terms not less favorable to the
Holders of the Notes and the Note Guarantees than those on which the
Refinanced Indebtedness was so subordinated to the Notes or the Note
Guarantees, (B) such new Indebtedness, other than Senior Indebtedness,
determined as of the date of Incurrence of such new Indebtedness, does not
mature prior to the Stated Maturity of the Refinanced Indebtedness, and
the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Refinanced Indebtedness and (C) such new
Indebtedness is Incurred by the Company or a Guarantor or by the
Restricted Subsidiary who is the obligor on the Refinanced Indebtedness;
(iv) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control in accordance with this
Indenture or (B) deposited to defease the Notes as described under Section
8.02 and Section 8.03;
(v) Guarantees of Indebtedness of the Company or any Restricted
Subsidiary by any Restricted Subsidiary; provided that such Guarantee of
such Indebtedness is permitted by and made in accordance with the terms of
this Indenture;
(vi) Indebtedness of the Company or any Restricted Subsidiary
representing Capitalized Lease Obligations, mortgage financings or
purchase money obligations, 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 Restricted Subsidiary, outstanding at any time in an
aggregate principal amount (together with refinancings thereof), not to
exceed the greater of (x) $25 million and (y) 3% of Total Assets
determined at the time of Incurrence;
(vii) Physician Support Obligations incurred by the Company or any
Restricted Subsidiary;
(viii) Guarantees by the Company of Indebtedness of any Restricted
Subsidiary; provided that such Indebtedness is otherwise permitted by and
made in accordance with this Section 4.03;
(ix) Acquired Indebtedness acquired or assumed by the Company or any
Restricted Subsidiary, or resulting from the merger or consolidation of
one or more
42
Persons into or with one or more Restricted Subsidiaries; provided that
after giving effect to any Acquired Indebtedness acquired or assumed under
this clause (ix), the Company could Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03(a);
(x) Indebtedness of a Securitization Subsidiary Incurred in a
Permitted Receivables Financing; and
(xi) Indebtedness of the Company or any Restricted Subsidiary (in
addition to Indebtedness permitted under clauses (i) through (x) above) in
an aggregate principal amount outstanding at any time (together with
refinancings thereof) not to exceed $50 million.
(b) Notwithstanding any other provision of this Section 4.03, (x) the
maximum amount of Indebtedness that may be Incurred pursuant to this Section
4.03 shall not be deemed to be exceeded, with respect to any outstanding
Indebtedness, due solely as the result of fluctuations in the exchange rates of
currencies and (y) Indebtedness resulting from the capitalization or accretion
of interest after the issuance of any Indebtedness shall be deemed not to
constitute an Incurrence of Indebtedness hereunder.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (x) Indebtedness Incurred under the Credit Agreement
on or prior to the Closing Date shall be treated as Incurred pursuant to
Section 4.03(a)(i) above, (y) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (z) any Liens
granted pursuant to the equal and ratable provisions referred to in Section
4.09 shall not be treated as Indebtedness. For purposes of determining
compliance with this Section 4.03, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described
above (other than Indebtedness Incurred under the Credit Agreement on or prior
to the Closing Date referred to in clause (x) of the preceding sentence),
including under the first paragraph of Section 4.03(a), the Company, in its
sole discretion, shall classify, and from time to time may reclassify, such
item of Indebtedness. Without limiting the foregoing, it is understood and
agreed that term loans and other Indebtedness may be incurred from time to time
pursuant to the Credit Agreement in reliance on, and in compliance with, the
first paragraph of Section 4.03(a) or pursuant to the relevant numbered
exceptions contained in the second paragraph of Section 4.03(a) and, if so
Incurred in accordance with this Section 4.03, such Indebtedness shall be
deemed to constitute Indebtedness under the Credit Agreement for purposes of
the definition of Senior Indebtedness.
(d) The Company will not, and will not permit any Guarantor to, Incur any
Indebtedness if such Indebtedness is subordinate in right of payment to any
Senior Indebtedness unless such Indebtedness is pari passu with, or
subordinated in right of payment to, the Notes or any Note Guarantee; provided
that the foregoing shall not apply to distinctions between categories of Senior
Indebtedness that exist by reason of Liens or Guarantees arising or created in
respect of some but not all such Senior Indebtedness or priorities of paydown,
from proceeds of collateral or otherwise, among classes or tranches of any
issue of Senior Indebtedness.
43
SECTION 4.04. Limitation on Restricted Payments. The Company will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Capital Stock of Restricted Subsidiaries to
holders of such Capital Stock) held by Persons other than the Company or any of
its Restricted Subsidiaries, (ii) purchase, call for redemption or redeem,
retire or otherwise acquire for value any shares of Capital Stock of (A) the
Company or any Guarantor (including options, warrants or other rights to
acquire such shares of Capital Stock) held by any Person other than the Company
or any of its Restricted Subsidiaries or (B) a Restricted Subsidiary other than
a Guarantor (including options, warrants or other rights to acquire such shares
of Capital Stock) held by any Affiliate of the Company (other than a Restricted
Subsidiary) or any holder of 5% or more of the Common Stock of the Company,
(iii) make any voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance, or other voluntary acquisition or
retirement for value, of Indebtedness of the Company that is subordinated in
right of payment to the Notes or any Indebtedness of a Guarantor that is
subordinated in right of payment to a Note Guarantee or (iv) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in, but not excluded from, clauses (i) through (iv)
above being collectively "Restricted Payments") if, at the time of, and after
giving effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing,
(B) the Company could not Incur at least $1.00 of additional
Indebtedness under the first paragraph of Section 4.03(a) or
(C) the aggregate amount of all Restricted Payments made after the
Closing Date shall exceed the sum of
(1) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a loss, minus
100% of the amount of such loss) accrued on a cumulative basis during
the period (taken as one accounting period) beginning on July 1,
2001, and ending on the last day of the last fiscal quarter preceding
the Transaction Date for which reports have been filed with the
Commission or provided to the Trustee plus
(2) the aggregate Net Cash Proceeds received by the Company
after the Closing Date as a capital contribution or from the issuance
and sale of its Capital Stock (other than Disqualified Stock) to a
Person who is not a Subsidiary of the Company, including an issuance
or sale permitted by this Indenture of Indebtedness of the Company
for cash upon the conversion of such Indebtedness into Capital Stock
(other than Disqualified Stock) of the Company, or from the issuance
to a Person who is not a Subsidiary of the Company of any options,
warrants or other rights to acquire Capital Stock of the Company (in
each case, exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity
of the Notes) plus
44
(3) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments) in any Person resulting (x)
from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the
Company or any Restricted Subsidiary, (y) from the Net Cash Proceeds
from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation
of Adjusted Consolidated Net Income), or (z) from the release of any
Guarantee plus
(4) an amount equal to the portion (proportionate to the
Company's equity interest in an Unrestricted Subsidiary) of the fair
market value of the assets less the liabilities of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend or redemption of any Capital Stock
within 60 days after the related date of declaration or call for
redemption if, at said date of declaration or call for redemption, such
payment or redemption would comply with the preceding paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes or any Note Guarantee including premium, if any, and
accrued interest, with the proceeds of, or in exchange for, Indebtedness
Incurred under Section 4.03(a)(iii);
(iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company or a Guarantor (or options, warrants or other rights
to acquire such Capital Stock) in exchange for, or out of the proceeds of
a capital contribution or a substantially concurrent offering of, shares
of Capital Stock (other than Disqualified Stock) of the Company (or
options, warrants or other rights to acquire such Capital Stock); provided
that such options, warrants or other rights are not redeemable prior to
the Stated Maturity of the Notes;
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness which is subordinated in right of payment to the Notes or any
Note Guarantee in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than
Disqualified Stock) of the Company (or options, warrants or other rights
to acquire such Capital Stock); provided that such options, warrants or
other rights are not redeemable prior to the Stated Maturity of the Notes;
(v) payments or distributions to dissenting stockholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger
or transfer of assets of the Company, that complies with the provisions of
this Indenture applicable to mergers, consolidations and transfers of all
or substantially all of the property and assets of the Company;
45
(vi) Investments acquired as a capital contribution, or in exchange
for, or out of the proceeds of a substantially concurrent offering of,
Capital Stock (other than Disqualified Stock) of the Company;
(vii) repurchases of Capital Stock by the Company deemed to occur
upon the exercise of options or warrants if such Capital Stock represents
all or a portion of the exercise price thereof;
(viii) repurchases by the Company of its Capital Stock from any of
its directors, officers or employees pursuant to any shareholders
agreement in effect on the date of this Indenture and as amended, modified
or replaced from time to time; provided that the amended, modified or
replaced agreement is not less favorable in any material respect to the
Company and its Restricted Subsidiaries than that in effect on the Closing
Date;
(ix) repurchases by the Company of its Capital Stock pursuant to any
management equity subscription plan or agreement, stock option plan or
agreement or employee benefit plan of the Company (excluding repurchases
pursuant to clause (viii) above), in an aggregate amount not to exceed $2
million in any fiscal year;
(x) dividends payable beginning January 1, 2008 on the PIK Preferred
Stock of the Company outstanding on the date of this Indenture, and any
additional PIK Preferred Stock paid in kind as a dividend thereon, in an
aggregate amount not to exceed $3 million in any fiscal year; or
(xi) Restricted Payments in an aggregate amount not to exceed $5.0
million;
provided that, except in the case of clauses (i), (iii) and (x), no Default or
Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment acquired as a capital
contribution or in exchange for Capital Stock referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii), (iv) or (vi), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments.
For purposes of determining compliance with this Section 4.04, (x) the
amount, if other than in cash, of any Restricted Payment shall be determined in
good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution and (y) in the event that a Restricted
Payment meets the criteria of more than one of the types of Restricted Payments
described in the above clauses, including the first paragraph of this Section
4.04, the Company, in its sole discretion, may order and classify, and from
time to time may reclassify, such Restricted Payment if it would have been
permitted at the time such Restricted Payment was made and at the time of such
reclassification.
46
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) arising pursuant to the Credit Agreement;
(ii) existing on the Closing Date under this Indenture, or any other
agreements in effect on the Closing Date, and any extensions,
refinancings, renewals or replacements of such agreements; provided that
the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements taken as a whole are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced, renewed
or replaced;
(iii) existing under or by reason of applicable law;
(iv) existing with respect to any Person or the property or assets of
such Person acquired by the Company or any Restricted Subsidiary, existing
at the time of such acquisition and not incurred in contemplation thereof,
which encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired and any extensions, refinancings,
renewals or replacements thereof; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or
replacements taken as a whole are no less favorable in any material
respect to the Holders than those encumbrances or restrictions that are
then in effect and that are being extended, refinanced, renewed or
replaced;
(v) in the case of clause (iv) of the first paragraph of this Section
4.05, (A) that restrict in a customary manner the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance
or contract or similar property or asset, or (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture;
(vi) arising or agreed to in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the
aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary;
(vii) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement for the sale or disposition of all or substantially all of
the Capital Stock of, or
47
property and assets of, such Restricted Subsidiary and that are customary
for such transactions;
(viii) deferral of rights of subrogation pursuant to Guarantees
otherwise permitted under this Indenture;
(ix) existing pursuant to any agreement governing Indebtedness
permitted to be Incurred under Section 4.03; provided that the provisions
relating to such encumbrance or restriction contained in such Indebtedness
are no less favorable to the Company in any material respect, as
determined by the Board of Directors of the Company in their reasonable
and good faith judgment, than the provisions contained in the Credit
Agreement as in effect on the Closing Date;
(x) Indebtedness or other contractual requirements of a
Securitization Subsidiary in connection with a Permitted Receivables
Financing; provided that such restrictions apply only to such
Securitization Subsidiary; or
(xi) provisions in joint venture agreements with respect to the
disposition or distribution of assets or property in the ordinary course
of business.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (2) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except:
(i) to the Company or a Wholly Owned Restricted Subsidiary;
(ii) issuances of director's qualifying shares or sales to foreign
nationals of shares of Capital Stock of foreign Restricted Subsidiaries,
to the extent required by applicable law; or
(iii) if, immediately after giving effect to such issuance or sale,
any Investment in such Person remaining after giving effect to such
issuance or sale would have been permitted to be made under Section 4.04
if made on the date of such issuance or sale and the Net Cash Proceeds of
any such sale are applied as and to the extent required by Section 4.10.
SECTION 4.07. Guarantees by Restricted Subsidiaries. Except as described
in the next sentence, the Company shall cause each Restricted Subsidiary that
has not executed this Indenture and provided a Note Guarantee or is otherwise
required to become a Guarantor pursuant to Section 10.03, other than a Foreign
Subsidiary, to execute and deliver a supplemental
48
indenture to this Indenture, substantially in the form of Exhibit E, providing
for a Note Guarantee by such Restricted Subsidiary and a notation of such Note
Guarantee substantially in the form of Exhibit F. Notwithstanding the
foregoing, a Restricted Subsidiary shall not be required to execute and deliver
such supplemental indenture or Note Guarantee if at any time at which the
Credit Agreement shall be in effect such Restricted Subsidiary shall not be
required to be a guarantor under the Credit Agreement, but only for so long as
such Restricted Subsidiary is not so required to be such a guarantor; upon any
requirement that such Restricted Subsidiary become a guarantor under the Credit
Agreement, such Restricted Subsidiary shall immediately comply with the first
sentence of this covenant.
SECTION 4.08. Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any Affiliate of the Company or any Restricted
Subsidiary, except upon terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors of the Company or (B) for which the
Company or a Restricted Subsidiary delivers to the Trustee a written
opinion of nationally recognized investment banking, accounting, valuation
or appraisal firm stating that the transaction is fair to the Company or
such Restricted Subsidiary from a financial point of view;
(ii) any transaction solely between the Company and any of its
Restricted Subsidiaries or solely among Restricted Subsidiaries;
(iii) reasonable fees and compensation paid to, and indemnity and
similar arrangements provided on behalf of, officers, directors and
employees of the Company or any Restricted Subsidiary in the ordinary
course of business, as determined in good faith by the Board of Directors
or senior management of the Company;
(iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company
files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes;
(v) any sale of shares of Capital Stock (other than Disqualified
Stock) of the Company;
(vi) any Permitted Investments or any Restricted Payments not
prohibited by Section 4.04;
(vii) fees, discounts and expense reimbursements paid to, and
indemnity and similar arrangements with, any Initial Purchaser in
connection with the offering and sale of the Notes and the Bank Agent or
any lender in connection with the Credit Agreement;
49
(viii) customary fees, discounts and expense reimbursement paid to,
and indemnity and similar arrangements with Affiliates providing
commercial banking and investment banking services, including, without
limitation, underwriting and other financial advisory services, to the
Company and its Restricted Subsidiaries;
(ix) any agreement or arrangement in effect on the Closing Date, as
amended, modified or replaced from time to time; provided that the
amended, modified or replaced agreement or arrangement is not less
favorable in any material respect to the Company and its Restricted
Subsidiaries than that in effect on the Closing Date;
(x) loans and advances to officers and employees of the Company or
any Restricted Subsidiary in the ordinary course of business of the
Company not exceeding $5 million in the aggregate outstanding at any time;
(xi) Restricted Payments that are permitted pursuant to Section 4.04;
(xii) transactions between the Company or a Restricted Subsidiary and
an Insurance Subsidiary, between the Company or a Restricted Subsidiary
and a Securitization Subsidiary or between a Securitization Subsidiary and
any Person in which the Securitization Subsidiary has an Investment; or
(xiii) issuances of securities or payments or distributions in the
ordinary course of business in connection with employment incentive plans,
employee stock plans, employee stock option plans and similar plans and
arrangements approved by the Board of Directors.
Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.08 and not
covered by clauses (ii) through (xiii) of this paragraph, (a) the aggregate
amount of which exceeds $5.0 million in value, must be approved or determined
to be fair in the manner provided for in clause (i)(A) or (B) above and (b) the
aggregate amount of which exceeds $10.0 million in value, must be determined to
be fair in the manner provided for in clause (i)(B) above.
SECTION 4.09. Limitation on Liens. The Company will not, and will not
permit any Guarantor to, Incur any Indebtedness which is not Senior
Indebtedness and which is secured by any Lien on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without contemporaneously therewith making effective
provision for all of the Notes, the Note Guarantees and all other amounts due
under this Indenture to be directly secured equally and ratably with (or, if
the obligation or liability to be secured by such Lien is subordinated in right
of payment to the Notes or the Note Guarantees, prior to) the obligation or
liability secured by such Lien for so long as such Indebtedness is so secured.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
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(ii) Liens securing obligations under or with respect to the Credit
Agreement which obligations were permitted to be Incurred under this
Indenture;
(iii) Liens (including extensions and renewals thereof) upon real or
personal property; provided that (a) such Lien is created solely for the
purpose of securing Indebtedness Incurred, in accordance with Section
4.03, to finance the cost (including the cost of improvement or
construction) of the item of property or assets subject thereto and such
Lien attaches not later than 365 days after the latest of the date of
acquisition of such property, the completion of the financed improvements
or construction of such property and the commencement of full operation of
such property, (b) the principal amount of the Indebtedness secured by
such Lien does not exceed 100% of such cost and (c) any such Lien shall
not extend to or cover any property or assets other than such item of
property or assets and any improvements on such item;
(iv) Liens on cash set aside at the time of the Incurrence of any
Indebtedness, or government securities purchased with such cash, in either
case to the extent that such cash or government securities pre-fund the
payment of interest on such Indebtedness and are held in a collateral or
escrow account or similar arrangement to be applied for such purpose;
(v) Liens on property of a Person at the time such Person becomes a
Restricted Subsidiary of the Company; provided that such Liens were not
created in contemplation thereof and do not extend to any other property
of the Company or any Restricted Subsidiary;
(vi) Liens on property at the time the Company or any Restricted
Subsidiary acquires such property, including any acquisition by means of a
merger or consolidation with or into the Company or a Restricted
Subsidiary of such Person; provided that such Liens were not created in
contemplation of such acquisition and do not extend to any other property
of the Company or any Restricted Subsidiary;
(vii) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts or leases, or to secure public
or statutory obligations, surety bonds, customs duties and the like, in
each case incurred in the ordinary course of business;
(viii) judgment Liens not giving rise to an Event of Default;
provided that such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have been expired;
(ix) Liens arising in connection with a Permitted Receivables
Financing; provided that in the case of the Company and the Guarantors
such Liens shall be limited to receivables referred to in the definition
of Permitted Receivables Financing, and related assets and proceeds and
the Capital Stock of a Securitization Subsidiary;
(x) Liens securing any Indebtedness under any Commodity Agreement,
Currency Agreement or Interest Rate Agreement that is Indebtedness; and
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(xi) extensions, renewals or replacements of any Liens referred to in
clauses (i), (v) and (vi) in connection with the refinancing of the
obligations secured thereby; provided that such extension, renewal or
replacement Lien is limited to all or part of the same property that was
secured under the original Lien.
SECTION 4.10. Limitation on Asset Sales. The Company will not, and will
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of (a) cash or Temporary
Cash Investments, (b) the assumption of Indebtedness or other obligations
(other than Indebtedness subordinated to the Notes) of the Company or any
Guarantor or Indebtedness of any other Restricted Subsidiary (in each case,
other than Indebtedness owed to the Company or any Affiliate of the Company);
provided that the Company, such Guarantor or such other Restricted Subsidiary
is irrevocably and unconditionally released from all liability under such
Indebtedness, (c) Replacement Assets, and/or (d) any securities, notes or other
similar obligations received by the Company or any such Restricted Subsidiary
which are converted by the Company or any such Restricted Subsidiary into cash
(to the extent of the cash received in that conversion) within 30 days of the
applicable Asset Sale.
Notwithstanding the foregoing, the 75% limitation referred to in clause
(ii) above shall not apply to any Asset Sale in which the amount of
consideration of the type referred to in clauses (a) through (d) of the
preceding paragraph received therefrom, determined in accordance with the
foregoing provision, is equal to or greater than what the after-tax proceeds
would have been had such Asset Sale complied with the aforementioned 75%
limitation.
Within twelve months after the date of receipt of Net Cash Proceeds from
an Asset Sale, the Company may, or may cause the relevant Restricted Subsidiary
to:
(A) apply an amount equal to such Net Cash Proceeds to permanently
repay Senior Indebtedness of the Company or any Guarantor or Indebtedness
of any other Restricted Subsidiary (or permanently reduce the commitments
thereunder, in the case of any revolving credit facility available
pursuant to the Credit Agreement or otherwise), in each case owing to a
Person other than the Company or any Restricted Subsidiary, or
(B) invest an equal amount, or the amount not so applied pursuant to
clause (A) (or enter into a definitive agreement committing to so invest
within 12 months after the date of such agreement), in Replacement Assets.
The amount of such Net Cash Proceeds available to be applied (or to be
committed to be applied) during such 12-month period as set forth in the
preceding sentence and not applied (or committed) as so required by the end of
such period shall constitute "Excess Proceeds."
If, as of the last day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this Section 4.10 totals at least $10 million, the Company must commence, not
later than 30 days after such date, and consummate an Offer to Purchase from
the Holders (and if required by the terms of any Indebtedness that is pari
passu with the Notes ("Pari Passu Indebtedness"), from the holders of
52
such Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount
of Notes (and Pari Passu Indebtedness) equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of their principal amount, plus, in
each case, accrued interest (if any) to the Payment Date. Upon completion of
the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess
Proceeds remaining after consummation of the Offer to Purchase may be used for
any purpose not otherwise prohibited by this Indenture.
SECTION 4.11. Designation of Restricted and Unrestricted Subsidiaries.
(a) The Board of Directors of the Company may designate any Subsidiary,
including a newly acquired or created Subsidiary, to be an Unrestricted
Subsidiary if no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
designation and the Subsidiary meets the following qualifications:
(i) (A) the Subsidiary does not (x) own any Disqualified Stock of the
Company or any Disqualified Stock of a Restricted Subsidiary or (y) hold
any Indebtedness of, or any Lien on any property of, the Company or any
Restricted Subsidiary, if such Indebtedness could not be Incurred under
Section 4.03 or such Lien would violate Section 4.09; and (B) the
Subsidiary does not own any Common Stock of a Restricted Subsidiary, and
all of its Subsidiaries are Unrestricted Subsidiaries;
(ii) at the time of the designation, the designation would be
permitted under Section 4.04;
(iii) any Guarantee or other credit support thereof by the Company or
any Restricted Subsidiary is deemed an Incurrence of Indebtedness and an
Investment, and would be permitted under Section 4.03 and Section 4.04;
(iv) the Subsidiary is not party to any transaction, arrangement,
contract, agreement or understanding with the Company or any Restricted
Subsidiary that would not be permitted under Section 4.08; and
(v) neither the Company nor any Restricted Subsidiary has any
obligation to subscribe for additional Capital Stock of the Subsidiary or
to maintain or preserve its financial condition or cause it to achieve
specified levels of operating results, except to the extent permitted by
Section 4.03 and Section 4.04.
Once so designated, the Subsidiary will remain an Unrestricted Subsidiary,
subject to Section 4.11 (b) below.
(b) (i) A Subsidiary previously designated an Unrestricted Subsidiary
which fails to meet the qualifications set forth in Section 4.11 (a) above will
be deemed to become at that time a Restricted Subsidiary, subject to the
consequences set forth in Section 4.11 (d) below; and (ii) the Board of
Directors may designate an Unrestricted Subsidiary to be a Restricted
Subsidiary if no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
designation.
(c) Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary, (i)
all existing Investments of the Company and the Restricted Subsidiaries therein
(valued at the
53
Company's and its Restricted Subsidiaries' proportionate share of the fair
market value of such Unrestricted Subsidiaries' assets less liabilities) will
be deemed made at that time; (ii) all existing Capital Stock or Indebtedness of
the Company or a Restricted Subsidiary held by it will be deemed Incurred at
that time, and all Liens on property of the Company or a Restricted Subsidiary
held by it will be deemed incurred at that time; (iii) all existing
transactions between it and the Company or any Restricted Subsidiary will be
deemed entered into at that time; (iv) it will be released at that time from
its Note Guarantee, if any; and (v) it will cease to be subject to the
provisions of this Indenture as a Restricted Subsidiary.
(d) Upon an Unrestricted Subsidiary becoming, or being deemed to become, a
Restricted Subsidiary, (i) all of its Indebtedness will be deemed Incurred at
that time for purposes of Section 4.03, but will not be considered the sale or
issuance of Capital Stock for purposes of Section 4.06 or Section 4.10; (ii)
Investments therein previously charged under Section 4.04 will be credited
thereunder; (iii) it shall immediately issue a Note Guarantee pursuant to, but
only to the extent required by Section 4.07; and (iv) it will thenceforward be
subject to the provisions of this Indenture as a Restricted Subsidiary.
(e) Any designation by the Company's Board of Directors of a Subsidiary as a
Restricted Subsidiary or Unrestricted Subsidiary will be evidenced to the
Trustee by promptly filing with the Trustee a Board Resolution giving effect to
the designation and an Officers' Certificate certifying that the designation
complied with the foregoing provisions.
SECTION 4.12. Repurchase of Notes upon a Change of Control. The Company
must commence, within 30 days after the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of their principal amount, plus accrued interest (if any)
to the Payment Date. The Company will not be required to make an Offer to
Purchase pursuant to this Section 4.12 if a third party makes an offer to
purchase the Notes in the manner, at the times and price and otherwise in
compliance with this Section and purchases all Notes validly tendered and not
withdrawn in such Offer to Purchase.
Prior to the commencement (or mailing) of the Offer to Purchase referred
to above, but in any event within 30 days following any Change of Control, the
Company will:
(1) repay in full and terminate all commitments under Indebtedness under
the Credit Agreement and all other Senior Indebtedness the terms of which
require repayment upon a Change of Control or offer to repay in full and
terminate all commitments under all Indebtedness under the Credit Agreement and
all other such Senior Indebtedness and to repay the Indebtedness owed to, and
terminate all commitments of, each lender which has accepted such offer; or
(2) obtain the requisite consents under the Credit Agreement and all other
Senior Indebtedness to permit the repurchase of the Notes as provided above.
SECTION 4.13. Existence. Subject to Articles IV and V of this Indenture,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each Restricted Subsidiary and the
54
rights (whether pursuant to charter, partnership certificate, agreement,
statute or otherwise), licenses and franchises of the Company and each
Restricted Subsidiary; provided that the Company shall not be required to
preserve any such right, license or franchise, or the existence of any
Restricted Subsidiary, if the maintenance or preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole; and provided further, that this Section does not
prohibit any transaction otherwise permitted by Section 4.10 or Section 4.12.
SECTION 4.14. Payment of Taxes. The Company shall pay, and shall cause
each of its Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies, except such as are contested in good
faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.
SECTION 4.15. Notice of Defaults. In the event that any Officer becomes
aware of any Default or Event of Default, the Company shall promptly deliver to
the Trustee an Officers' Certificate specifying such Default or Event of
Default.
SECTION 4.16. Compliance Certificates. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year, an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that occurred during such fiscal year. Such certificate shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer of the Company that a review has been conducted
of the activities of the Company and its Restricted Subsidiaries and the
Company's and its Restricted Subsidiaries' performance under this Indenture and
that the Company has complied with all conditions and covenants under this
Indenture. For purposes of this Section 4.16, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If any of the officers of the Company signing
such certificate has knowledge of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its nature
and status.
SECTION 4.17. Commission Reports and Reports to Holders. At all times from
and after the earlier of (i) the date of the commencement of an Exchange Offer
or the effectiveness of the Shelf Registration Statement (the "Registration")
and (ii) the date that is six months after the Closing Date, in either case,
whether or not the Company is then required to file reports with the
Commission, the Company shall file with the Commission (to the extent accepted
by the Commission for filing) all such reports and other information as it
would be required to file with the Commission by Section 13(a) or 15(d) under
the Securities Exchange Act of 1934 if it were subject thereto. The Company
shall supply to the Trustee and to each Holder or shall supply to the Trustee
for forwarding to each such Holder, without cost to such Holder, copies of such
reports and other information. In addition, at all times prior to the earlier
of the date of the Registration and the date that is six months after the
Closing Date, the Company shall, at its cost, deliver to the Trustee and each
Holder quarterly and annual reports substantially equivalent to those which
would be required by the Exchange Act. In addition, at all times prior to the
Registration, upon the request of any Holder or any prospective purchaser of
the Notes designated by a Holder, the Company shall supply to such Holder or
such prospective purchaser the information required under Rule 144A (d)(4)
under the Securities Act.
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SECTION 4.18. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.01. When Company or Guarantors May Merge, Etc. The Company will
not consolidate with, merge with or into, or sell, convey, transfer or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person (other than a Restricted
Subsidiary) to merge with or into it unless:
(i) it shall be the continuing Person, or the Person (if other than
it) formed by such consolidation or into which it is merged or that
acquired such property and assets of the Company (the "Surviving Person")
shall be a corporation organized and validly existing under the laws of
the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, all of the Company's obligations under this Indenture and the
Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or the Surviving Person, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction;
(iv) immediately after giving effect to such transaction on a pro
forma basis the Company, or the Surviving Person, as the case may be,
could Incur at least $1.00 of Indebtedness under the first paragraph of
Section 4.03; provided that this clause (iv) shall not apply to a
consolidation, merger or sale of all (but not less than all) of the assets
of the Company if all Liens and Indebtedness of the Company or the
Surviving Person, as the case may be, and its Restricted Subsidiaries
outstanding immediately after such transaction would have been permitted
(and all such Liens and Indebtedness, other than Liens and Indebtedness of
the Company and its Restricted Subsidiaries outstanding immediately prior
to the transaction, shall be deemed to have been Incurred) for all
purposes of this Indenture;
56
(v) it delivers to the Trustee an Officers' Certificate attaching the
arithmetic computations to demonstrate compliance with clauses (iii) and
(iv)) and an Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies
with this Section 5.01 and that all conditions precedent provided for
herein relating to such transaction have been complied with; and
(vi) each Guarantor, unless such Guarantor is the Person with which
the Company has entered into a transaction under this Section 5.01 shall
have by amendment to its Note Guarantee confirmed that its Note Guarantee
shall apply to the obligations of the Company or the Surviving Person in
accordance with the Notes and this Indenture;
provided, however, that clauses (ii), (iii) and (iv) above do not apply (a) if
in the good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose
of such transaction is to change the state of incorporation of the Company and
any such transaction shall not have as one of its purposes the evasion of the
foregoing limitations, or (b) to the consolidation or merger of the Company
with or into any Wholly Owned Restricted Subsidiary or the consolidation and
merger of a Wholly Owned Restricted Subsidiary with or into the Company.
The Company may not, directly or indirectly, lease all or substantially
all of its property and assets (as an entirety or substantially as an entirety
in one transaction or a series of related transactions) to any Person.
Each Guarantor (other than any Guarantor whose Note Guarantee is to be
released in accordance with the terms of this Indenture) will not, and the
Company will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
(i) the entity formed by or surviving any such consolidation or
merger (if other than the Guarantor) is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia;
(ii) such entity (if other than a Guarantor) assumes by supplemental
indenture all of the obligations of the Guarantor on its Note Guarantee;
and
(iii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger, or
any sale, conveyance, transfer or other disposition of all or substantially all
of the property and assets of the Company or any Guarantor in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company or any Guarantor is merged or to which
such sale, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or such Guarantor under this Indenture with the same effect as if such
successor Person had been named as the Company or such Guarantor herein.
57
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. The following events are defined as
"Events of Default" in this Indenture:
(a) default in the payment of principal of (or premium, if any, on) any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise, whether or not such payment is prohibited by Article
XI;
(b) default in the payment of interest on any Note when the same becomes
due and payable, and such default continues for a period of 30 days, whether or
not such payment is prohibited by Article XI;
(c) (i) default in the performance or breach of Section 5.01 or (ii) the
failure by the Company to make or consummate an Offer to Purchase in accordance
with Section 4.10 or Section 4.12;
(d) the Company or any Guarantor defaults in the performance of or
breaches any other covenant or agreement in this Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 60 consecutive days after written
notice specifying the default (and demanding that such default be remedied) by
the Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;
(e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Restricted Subsidiary having an outstanding principal amount
of $10 million or more in the aggregate for all such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created,
(A) an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (B) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance or indemnity
provided by a reputable and creditworthy Person) for the payment of money in
excess of $10 million in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or
retention, or in the case of indemnity, amounts excluded by baskets, caps,
thresholds or similar limitations, as not so covered) shall be rendered against
the Company, any Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary and shall not
be paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $10 million during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
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(g) a court having jurisdiction in the premises enters a decree or order
for (A) relief in respect of the Company, any Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company, any Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary or
for all or substantially all of the property and assets of the Company, any
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company, any Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(h) the Company, any Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company, any
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, or for all or
substantially all of the property and assets of the Company, any Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary or (C) effects any general assignment for
the benefit of creditors; or
(i) any Guarantor repudiates its obligations under its Note Guarantee or,
except as permitted by this Indenture, any Note Guarantee is determined to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event of
Default specified in clause (g) or (h) of Section 6.01 that occurs with respect
to the Company) occurs and is continuing under this Indenture, the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes, then
outstanding, by written notice to the Company (and to the Trustee if such
notice is given by the Holders), may, and the Trustee at the request of such
Holders shall, declare the principal of, premium, if any, and accrued interest
on the Notes to be immediately due and payable, unless there are any amounts
outstanding under the Credit Agreement, in which case the same shall become
immediately due and payable upon the first to occur of an acceleration under
the Credit Agreement or five business days after receipt by the Company and the
representative or other agent under the Credit Agreement (as defined therein)
of notice of such declaration (but only if such Event of Default is then
continuing). Upon a declaration of acceleration, such principal of, premium, if
any, and accrued interest shall be immediately due and payable. In the event of
a declaration of acceleration because an Event of Default set forth in Section
6.01(e) has occurred and is continuing, such declaration of acceleration shall
be automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to Section 6.01(e) shall be remedied or cured by the
Company or the relevant Restricted Subsidiary (or Restricted Subsidiaries) or
waived by the holders of the relevant Indebtedness within 60 days after the
declaration of acceleration with respect thereto. If
59
an Event of Default specified in clause (g) or (h) of Section 6.01 occurs with
respect to the Company, the principal of, premium, if any, and accrued interest
on the Notes then outstanding shall automatically become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
The Holders of at least a majority in principal amount of the outstanding
Notes by written notice to the Company and to the Trustee, may waive all past
defaults and rescind and annul a declaration of acceleration and its
consequences if (a) all existing Events of Default, other than the nonpayment
of the principal of, premium, if any, and interest on the Notes that have
become due solely by such declaration of acceleration, have been cured or
waived and (b) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, 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 even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07 and
9.02, the Holders of at least a majority in principal amount of the outstanding
Notes, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences, except a Default in the payment of principal of,
premium, if any, or interest on any Note as specified in clause (a) or (b) of
Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority in
aggregate 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 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,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders of
Notes not joining in the giving of such direction and may take any other action
it deems proper that is not inconsistent with any such direction received from
Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or pursue any other remedy
hereunder, unless:
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(i) the Holder has previously given the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
pursue such remedy;
(iii) such Holder or Holders offer the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06, the
Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture
or the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the principal of, premium, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent
of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c)
of Section 6.01 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or any
other obligor of the Notes for the whole amount of principal, premium, if any,
and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.07) and the Holders allowed in any judicial proceedings relative to the
Company (or any other obligor of the Notes), its creditors or its property and
shall be entitled
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and empowered to collect and receive any monies, securities or other property
payable or deliverable upon conversion or exchange of the Notes or upon any
such claims and to distribute the same, and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07. Nothing herein contained shall be deemed to empower the
Trustee to authorize or consent to, or accept or adopt on behalf of any Holder,
any plan of reorganization, arrangement, adjustment or composition affecting
the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article VI, subject to Article XI and Article XII, it shall pay out the
money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court 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 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to and limited by any such adverse
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Company, Trustee and
the Holders shall continue as though no such proceeding had been instituted.
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SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Notes in Section 2.09, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver
of any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article VI or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE VII
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it. Whether or not herein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee, or any other capacity the Trustee may
serve under the terms of this Indenture, shall be subject to the provisions of
this Article VII.
Except during the continuance of a Default, the Trustee will not be
liable, except for the performance of such duties as are specifically set forth
in this Indenture. If an Event of Default has occurred and is continuing, the
Trustee will use the same degree of care and skill in its exercise of the
rights and powers vested in it under this Indenture as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
(i) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper person;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 13.04. The Trustee
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shall not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion;
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction;
(v) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers, provided that the Trustee's conduct does not constitute
negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, financial statement, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled, at the
Company's sole cost and expense, to examine the books, records and
premises of the Company personally or by agent or attorney; and
(viii) the Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Notes unless either (1) a
Responsible Officer shall have actual knowledge of such Default or Event
of Default or (2) written notice of such Default or Event of Default shall
have been given to the Trustee by the Company, any Guarantor or by any
Holder of the Notes.
SECTION 7.03. 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 the Company or its Affiliates with the same rights it would
have if it were not the Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
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SECTION 7.05. Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to
any Responsible Officer of the Trustee, the Trustee shall mail to each Holder
in the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within 90 days after it occurs, unless such Default
or Event of Default has been cured; provided, however, that, except in the case
of a default in the payment of the principal of, premium, if any, or interest
on any Note, the Trustee shall be protected in withholding such notice if and
so long as the Board of Directors, the executive committee or a trust committee
of directors and/or a Responsible Officer of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
July 15, beginning with the July 15 following the date of this Indenture, the
Trustee shall mail to each Holder as provided in TIA Section 313(c) a brief
report dated as of such July 15, if required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Securities are listed on
any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing, from time to
time, for its services hereunder. The compensation of the Trustee shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by the Trustee without
negligence or bad faith on its part. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company and each of the Guarantors, jointly and severally, shall
indemnify the Trustee, its directors, officers, agents and employees for, and
hold it harmless against, any loss or liability, cost or expense incurred by it
without negligence or bad faith on its part in connection with the acceptance
or administration of this Indenture and its duties under this Indenture and the
Notes, including, without limitation, the costs and expenses of defending
itself against any claim or liability and of complying with any process served
upon it or any of its officers in connection with the exercise or performance
of any of its powers or duties under this Indenture and the Notes. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder, unless the Company is materially prejudiced
thereby. The Company shall defend the claim and the Trustee shall cooperate in
the defense provided, however, that the Trustee shall have the right to defend
such claim if, upon the advice of counsel, its interests may be prejudiced by
the conduct of such defense by the Company. Unless otherwise set forth herein,
the Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
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To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in clause (g) or (h) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
The provisions of this Section 7.07 shall survive the resignation or
removal of the Trustee and termination of this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign at any time by so notifying the Company in writing
at least 30 days prior to the date of the proposed resignation. The Holders of
a majority in principal amount of the outstanding Notes may remove the Trustee
by so notifying the Trustee in writing and may appoint a successor Trustee with
the consent of the Company. The Company may remove the Trustee if: (i) the
Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged
a bankrupt or an insolvent; (iii) a receiver or other public officer takes
charge of the Trustee or its property; or (iv) the Trustee becomes incapable of
acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the outstanding Notes may, at
the expense of the Company, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 7.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee
shall become effective and (iii) the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder. No successor
Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.
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If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of
TIA Section 310(b) may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. If at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 7.08, the Trustee shall resign immediately in the manner and
with the effect provided in this Section.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligation under Section 7.07 shall continue for the benefit of
the retiring Trustee.
Upon the Trustee's resignation or removal, the Company shall promptly pay
the Trustee all amounts owed by the Company to the Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein, provided such corporation shall be otherwise qualified and eligible
under this Article.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have a
combined capital and surplus of at least $25 million as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable federal or state supervising or examining authority. If at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 7.10, the Trustee shall resign immediately in the manner and
with the effect specified in this Article.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article VIII of this Indenture.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and
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thereafter repaid to the Company, as provided in Section 8.05) have been
delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder; or
(ii) (A) the Notes mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the
benefit of the Holders for that purpose, money or U.S. Government
Obligations sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay principal, premium, if, any,
and interest on the Notes to maturity or redemption, as the case may be,
and to pay all other sums payable by it hereunder, (C) no Default or Event
of Default with respect to the Notes shall have occurred and be continuing
on the date of such deposit, (D) such deposit will not result in a breach
or violation of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Company is a party or by which
it is bound and (E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations under
Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Notes are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.04, 8.05 and 8.06 shall survive. After any such irrevocable
deposit, the Trustee upon request shall acknowledge in writing the discharge of
the Company's obligations under the Notes and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the deposit referred to in clause
(A) of this Section 8.02, and the provisions of this Indenture will no longer
be in effect with respect to the Notes (except as set forth below in this
Section 8.02) and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same if:
(A) With reference to this Section 8.02, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.10) and conveyed
all right, title and interest to the Trustee for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust specifically
pledged to the Trustee for the benefit of the Holders as security for
payment of the principal of, or premium, if any, on the Notes and
dedicated solely to, the benefit of the Holders, in and to (1) money in an
amount, (2) U.S. Government Obligations that through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment
referred to
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in this clause (A), money in an amount or (3) a combination thereof in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if any,
and accrued interest on the outstanding Notes on the Stated Maturity of
such payments; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal, premium, if any, and
interest with respect to the Notes;
(B) The Company has delivered to the Trustee (1) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred, which Opinion of Counsel shall be based upon
(and accompanied by a copy of) a ruling of the Internal Revenue Service to
the same effect unless there has been a change in applicable federal
income tax law after the Closing Date such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned Opinion
of Counsel and (2) an Opinion of Counsel to the effect that the creation
of the defeasance trust does not violate the Investment Company Act of
1940 and that after the passage of 123 days following the deposit (except,
with respect to any trust funds for the account of any Holder who may be
deemed to be an "insider" for purposes of the United States Bankruptcy
Code, after one year following the deposit), the trust funds will not be
subject to the effect of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code
or Section 15 of the New York Debtor and Creditor Law in a case commenced
by or against the Company under either such statute, and either (I) the
trust funds will no longer remain the property of the Company (and
therefore will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) or (II) if a court were to rule under any such law in any case
or proceeding that the trust funds remained property of the Company, (a)
assuming such trust funds remained in the possession of the Trustee prior
to such court ruling to the extent not paid to the Holders, the Trustee
will hold, for the benefit of the Holders, a valid and perfected security
interest in such trust funds that is not avoidable in bankruptcy or
otherwise except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute and (b) the Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used in such case or proceeding;
(C) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have
occurred and be continuing on the date of such deposit or during the
period ending on the 123rd day after the date of such deposit, and such
deposit shall not result in a breach or violation of, or constitute a
default under, any other agreement or instrument (including, without
limitation, the Credit Agreement if
69
then in effect) to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound;
(D) the Company is not prohibited from making payments in respect of
the Notes by the provisions of Article XI;
(E) if the Notes are then listed on a national securities exchange,
the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
(F) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or
one-year) period referred to in clause (B)(2) of this Section 8.02, none of the
Company's obligations under this Indenture shall be discharged. Subsequent to
the end of such 123-day (or one year) period with respect to this Section 8.02,
the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 8.04, 8.05, 8.06 and the rights, powers, trusts, duties
and immunities of the Trustee hereunder and Articles XI and XII (with respect
to payments in respect of Senior Subordinated Obligations other than with the
assets held in trust as described in this Section 8.02) shall survive until the
Notes are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.04, 8.05 and 8.06 shall survive. If and when a ruling from the
Internal Revenue Service or an Opinion of Counsel referred to in clause (B)(1)
of this Section 8.02 is able to be provided specifically without regard to, and
not in reliance upon, the continuance of the Company's obligations under
Section 4.01, then the Company's obligations under such Section 4.01 shall
cease upon delivery to the Trustee of such ruling or Opinion of Counsel and
compliance with the other conditions precedent provided for herein relating to
the defeasance contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Covenants and Events of Default. The
Company may omit to comply with any term, provision or condition set forth in
clauses (iii) and (iv) of Section 5.01, Sections 4.03 through 4.11 and Section
10.03, and clause (c) of Section 6.01 with respect to clauses (iii) and (iv) of
Section 5.01, clauses (c) and (d) of Section 6.01 with respect to Sections 4.03
through 4.11 and Section 10.03, and clauses (e) and (f) of Section 6.01 shall
be deemed not to be Events of Default, in each case with respect to the
outstanding Notes if:
(A) with reference to this Section 8.03, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.10) and conveyed
all right, title and interest to the Trustee for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust,
70
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal of, premium, if any, and interest,
if any, on the Notes, and dedicated solely to, the benefit of the Holders,
in and to (1) money in an amount, (2) U.S. Government Obligations that,
through the payment of interest, premium, if any, and principal in respect
thereof in accordance with their terms, will provide, not later than one
day before the due date of any payment referred to in this clause (A),
money in an amount or (3) a combination thereof in an amount sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, without consideration of the reinvestment
of such interest and after payment of all federal, state and local taxes
or other charges and assessments in respect thereof payable by the
Trustee, the principal of, premium, if any, and interest on the
outstanding Notes on the Stated Maturity of such payments; provided that
the Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Notes;
(B) the Company has delivered to the Trustee (1) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and that after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Company
under either such statute, and either (I) the trust funds will no longer
remain the property of the Company (and therefore will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally) or (II) if a court
were to rule under any such law in any case or proceeding that the trust
funds remained property of the Company, (a) assuming such trust funds
remained in the possession of the Trustee prior to such court ruling to
the extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise except for the
effect of Section 552(b) of the United States Bankruptcy Code on interest
on the trust funds accruing after the commencement of a case under such
statute and (b) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used in such case or proceeding, and (2) 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 deposit and defeasance of
certain covenants and Events of Default and will be subject to federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit and defeasance had not
occurred;
(C) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default, shall
have occurred and be continuing on the date of such deposit or during the
period ending on the 123rd day after such date of such deposit, and such
deposit shall not result in a breach or violation of, or constitute a
default
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under, this Indenture or any other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(D) the Company is not prohibited from making payments in respect of
the Notes by the provisions of Article XI;
(E) if the Notes are then listed on a national securities exchange,
the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
(F) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.05, the
Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any excess money held by
them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided
that the Trustee or Paying Agent before being required to make any payment may
cause to be published at the expense of the Company once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Security Register)
notice that such money remains unclaimed and that after a date specified
therein (which shall be at least 30 days from the date of such publication or
mailing) any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company, Holders entitled to such money must
look to the Company for payment as general creditors unless an applicable law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, 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, the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as
the case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be; provided that, if the Company has made
any payment of principal of, premium, if any, or interest on any Notes because
of the reinstatement of its obligations, the Company shall be subrogated to
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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.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when authorized by
a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this Indenture;
provided that such amendments or supplements shall not adversely affect
the interests of the Holders in any material respect;
(2) to comply with Article V, Section 4.07 or Section 10.03;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(6) to provide for or confirm the issuance of additional Notes; or
(7) to make any change that, in the good faith opinion of the Board
of Directors as evidenced by a Board Resolution, does not materially and
adversely affect the rights of any Holder.
Notwithstanding anything to the contrary contained above, no amendment of,
or supplement or waiver to, this Indenture shall adversely affect the rights of
the holders of any Senior Indebtedness under Article XI or XII (including any
defined terms as used therein) without the consent of such holders of Senior
Indebtedness.
SECTION 9.02. With Consent of Holders. The Company, when authorized by its
Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
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(ii) reduce the principal amount of, or premium, if any, or interest
on, any Note;
(iii) change the optional redemption dates or optional redemption
prices of the Notes from that stated in Section 3.01;
(iv) change any place or currency of payment of principal of,
premium, if any, or interest on, any Note;
(v) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of redemption, on
or after the Redemption Date) on any Note;
(vi) reduce the percentage or principal amount of outstanding Notes
the consent of whose Holders is necessary to modify or amend this
Indenture or to waive compliance with certain provisions of or certain
Defaults under this Indenture;
(vii) waive a Default in the payment of principal of, premium, if
any, or interest on, any Note;
(viii) release any Guarantor from its Note Guarantee, except as
provided in this Indenture;
(ix) modify the subordination provisions in a manner adverse to the
Holders;
(x) following the occurrence of an Asset Sale, amend, change or
modify the obligation of the Company to make and consummate an Offer to
Purchase with respect to such Asset Sale in accordance with Section 4.10,
including amending, changing or modifying any definition relating thereto
in any manner materially adverse to the Holders of the Notes affected
thereby; or
(xi) following the occurrence of a Change of Control, amend, change
or modify the obligation of the Company to make and consummate an Offer to
Purchase with respect to such Change of Control in accordance with Section
4.12, including amending, changing or modifying any definition relating
thereto in any manner materially adverse to the Holders of the Notes
affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Notwithstanding anything to the contrary contained above, no amendment of,
or supplement or waiver to, this Indenture shall adversely affect the rights of
the holders of any Senior Indebtedness under Article XI or XII (including any
defined terms as used therein) without the consent of such holders of Senior
Indebtedness.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the
74
amendment, supplement or waiver. The Company will mail supplemental indentures
to Holders upon request. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of 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 consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in the second paragraph of
Section 9.02. In case of an amendment or waiver of the type described in the
second paragraph of Section 9.02, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder of a Note that
evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee. At the Company's expense, the
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation
on any Note thereafter authenticated. Alternatively, if the Company or the
Trustee so determines, the Company 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 issue a new Note, shall not affect the
validity and effect of such amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article IX is authorized or permitted by this
Indenture and that it will be valid and binding upon the Company. Subject to
the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Trustee may, but shall not be obligated to,
execute any such
75
amendment, supplement or waiver that affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE X
GUARANTEE OF NOTES
SECTION 10.01. Note Guarantee. Subject to the provisions of this Article
X, each of the Guarantors hereby, jointly and severally, fully and
unconditionally Guarantees to each Holder of Notes hereunder and to the Trustee
on behalf of the Holders: (i) the due and punctual payment of the principal of,
premium, if any, and interest on each Note, when and as the same shall become
due and payable, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal of, premium, if any, and
interest on the Notes, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee, all in accordance with the terms of such Note and this Indenture and
(ii) in the case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal, at
Stated Maturity, by acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in the next succeeding
paragraph.
Each Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Note Guarantee not constitute a fraudulent transfer
or conveyance for purposes of the United States Bankruptcy Code, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law. To effectuate the foregoing intention, the Holders and
such Guarantor hereby irrevocably agree that the obligations of such Guarantor
under its Note Guarantee shall be limited to the maximum amount as will, after
giving effect to all Senior Indebtedness of such Guarantor, all other
contingent and fixed liabilities of such Guarantor and any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Note Guarantee or pursuant to the
following paragraph, result in the obligations of such Guarantor under its Note
Guarantee not constituting such fraudulent transfer or conveyance.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Guarantor's obligations with
respect to its Note Guarantee. "Adjusted Net Assets" of such Guarantor at any
date shall mean the lesser of the amount by which (x) the fair value of the
property of such Guarantor exceeds the total amount of liabilities,
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including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date),
but excluding liabilities under the Note Guarantee, of such Guarantor at such
date and (y) the present fair salable value of the assets of such Guarantor at
such date exceeds the amount that will be required to pay the probable
liability of such Guarantor on its debts (after giving effect to all Senior
Indebtedness of such Guarantor, all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Note Guarantee of such Guarantor), excluding debt in
respect of its Note Guarantee, as they become absolute and matured. Such
contribution rights may only be exercised after all Senior Indebtedness of each
other Guarantor has been repaid in full in cash or cash equivalents.
Each of the Guarantors hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
debt evidenced thereby and all demands whatsoever, and covenants that this Note
Guarantee will not be discharged as to any such Note except by payment in full
of the principal thereof and interest thereon and as provided in Sections 8.01,
8.02 and 8.03. In the event of any declaration of acceleration of such
obligations as provided in Article VI, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purposes of this Article X. In addition, without limiting the foregoing
provisions, upon the effectiveness of an acceleration under Article VI, the
Trustee shall promptly make a demand for payment on the Notes under the Note
Guarantee provided for in this Article X.
The obligations of each Guarantor under its Note Guarantee are independent
of the obligations Guaranteed by such Guarantor hereunder, and a separate
action or actions may be brought and prosecuted by the Trustee on behalf of, or
by, the Holders, subject to the terms and conditions set forth in this
Indenture, against a Guarantor to enforce this Guarantee, irrespective of
whether any action is brought against the Company or whether the Company is
joined in any such action or actions.
If the Trustee or the Holder is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, receiver, liquidator,
trustee, sequestrator or other similar official acting in relation to Company
or such Guarantor, any amount paid to the Trustee or such Holder in respect of
a Note, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each of the Guarantors further agrees, to
the fullest extent that it may lawfully do so, that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, the maturity of the
obligations Guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition extant under any applicable bankruptcy law
preventing such acceleration in respect of the obligations Guaranteed hereby.
Each of the Guarantors hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company or any other
Guarantor that arise from the existence, payment, performance or enforcement of
its obligations under this Note Guarantee and this Indenture, including,
without limitation, any right of subrogation, reimbursement,
77
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Holders against the Company or any Guarantor or any
collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company or a Guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to a Guarantor in violation of the preceding sentence and
the principal of, premium, if any, and accrued interest on the Notes shall not
have been paid in full, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the
Holders, and shall forthwith be paid to the Trustee for the benefit of the
Holders to be credited and applied upon the principal of, premium, if any, and
accrued interest on the Notes. Each of the Guarantors acknowledges that it will
receive direct and indirect benefits from the issuance of the Notes pursuant to
this Indenture and that the waivers set forth in this Section 10.01 are
knowingly made in contemplation of such benefits.
The Note Guarantee set forth in this Section 10.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
SECTION 10.02. Obligations Unconditional. Nothing contained in this
Article X or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as among any Guarantor and the Holders of the Notes, the
obligation of such Guarantor, which is absolute and unconditional, upon failure
by the Company to pay to the Holders of the Notes the principal of, premium, if
any, and interest on the Notes as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of such Guarantor, nor shall
anything herein or therein prevent any Holder or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture.
Without limiting the foregoing, nothing contained in this Article X will
restrict the right of the Trustee or the Holders to take any action to declare
the Note Guarantee to be due and payable prior to the Stated Maturity of any
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder.
SECTION 10.03. Release of Note Guarantees. The Note Guarantee issued by
any Restricted Subsidiary will be automatically and unconditionally released
and discharged (i) upon any sale, exchange or transfer, to any Person not a
Subsidiary of the Company, of all of the Company's and each Restricted
Subsidiary's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is not prohibited by
this Indenture), (ii) upon the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary, in accordance with the terms of this Indenture or
(iii) if at any time at which the Credit Agreement shall be in effect such
Restricted Subsidiary shall not be required to be a guarantor under the Credit
Agreement (but only for so long as such Restricted Subsidiary is not so
required to be such a guarantor; upon any requirement that such Restricted
Subsidiary become a guarantor under the Credit Agreement, such Restricted
Subsidiary shall immediately provide a Note Guarantee pursuant to Section
4.07).
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ARTICLE XI
SUBORDINATION OF NOTES
SECTION 11.01. Agreement to Subordinate. The Company covenants and agrees,
and each Holder of the Notes, by its acceptance thereof, likewise covenants and
agrees, (i) that all Notes shall be issued subject to the provisions of this
Article XI, and each Person holding any Note, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that the
payment of all obligations on the Notes (including all Senior Subordinated
Obligations of the Company) by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or cash equivalents of all existing and future
Senior Indebtedness, including, without limitation, the Company's obligations
under the Credit Agreement and (ii) that the subordination is for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness,
and that each holder of Senior Indebtedness whether now outstanding or
hereafter created, incurred, assumed or guaranteed shall be deemed to have
acquired Senior Indebtedness in reliance upon the covenants and provisions
contained in this Indenture and the Notes.
SECTION 11.02. Liquidation; Dissolution; Bankruptcy. (a) Except with
respect to the money, securities or proceeds held in an irrevocable trust for
the termination or defeasance and discharge of this Indenture in accordance
with Article VIII hereof, as long as all of the conditions to deposit into such
trust were satisfied at the time of such deposit, upon any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating
to the Company or its property, whether voluntary or involuntary, all amounts
due or to become due upon all Senior Indebtedness (including any interest
accruing subsequent to the filing of a petition for bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) shall first be paid in full
in cash or cash equivalents, before any payment or distribution of any kind or
character is made on account of any Senior Subordinated Obligations, or for the
acquisition of any of the Notes for cash, property, securities or otherwise or
any distribution with respect to the Notes, whether of cash, property,
securities or otherwise. Before any payment may be made by, or on behalf of,
the Company on any Senior Subordinated Obligations (other than with the money,
securities or proceeds held under any defeasance trust established in
accordance with this Indenture, as long as all of the conditions to deposit
into such trust were satisfied at the time of such deposit) upon any such
dissolution, winding up, liquidation or reorganization, all Senior Indebtedness
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) must be
paid in full in cash or cash equivalents.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
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recovered by, or paid over to, such receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person, the Senior Indebtedness or
part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred. To the extent
that the obligation to repay any Senior Indebtedness is declared to be
fraudulent, invalid, or otherwise set aside under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then the obligation so
declared fraudulent, invalid or otherwise set aside (and all other amounts that
would come due with respect thereto had such obligation not been so affected)
shall be deemed to be reinstated and outstanding as Senior Indebtedness for all
purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property, securities or otherwise, to which the Holders of the
Notes or the Trustee on behalf of the Holders of the Notes would be entitled,
but for Section 11.02(a) or Section 11.02(b), shall be made by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution for the Holders of the Notes
or the Trustee prior to payment in full in cash or cash equivalents of all
Senior Indebtedness, such payment or distribution shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (proportionately to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
(d) The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in
Article V hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 11.02 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assume
the Company's obligations hereunder in accordance with Article V.
SECTION 11.03. Default on Designated Senior Indebtedness. (a) No direct or
indirect payment by or on behalf of the Company of Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with Sections 8.01, 8.02 or 8.03, as
long as all of the conditions to deposit into such trust were satisfied at the
time of such deposit), whether pursuant to the terms of the Notes or upon
acceleration or otherwise shall be made if, at the time of such payment, there
exists a default in the payment of all or any portion of the obligations on any
Senior Indebtedness of the Company and such default shall not have been cured
or waived or the benefits of this sentence waived by or on behalf of the
holders of such Senior Indebtedness. In addition, during the continuance of any
other event of default with respect to any Designated Senior Indebtedness
pursuant to which the maturity thereof may be accelerated, upon receipt by the
Trustee of written notice from the trustee or other representative for the
holders of such Designated Senior Indebtedness (or the holders of at least a
majority in principal amount of such Designated Senior Indebtedness then
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outstanding), no payment of Senior Subordinated Obligations (other than with
the money, securities or proceeds held under any defeasance trust established
in accordance with Sections 8.01, 8.02 or 8.03, as long as all of the
conditions to deposit into such trust were satisfied at the time of such
deposit) may be made by or on behalf of the Company upon or in respect of the
Notes for a period (a "Payment Blockage Period") commencing on the date of
receipt of such notice and ending 179 days thereafter (unless, in each case,
such Payment Blockage Period shall be terminated by written notice to the
Trustee from such trustee of, or other representative for, such holders or by
payment in full in cash or cash equivalents of such Designated Senior
Indebtedness (and any other Designated Senior Indebtedness with an event of
default then permitting acceleration) or all events of default with respect to
all Designated Senior Indebtedness then outstanding have been cured or waived).
Not more than one Payment Blockage Period may be commenced with respect to the
Notes during any period of 360 consecutive days. Notwithstanding anything in
the Indenture to the contrary, there must be 180 consecutive days in any
360-day period in which no Payment Blockage Period is in effect. No event of
default that existed or was continuing (it being acknowledged that any
subsequent action or any breach of any financial covenants for a period
commencing after the date of delivery of such initial payment blockage notice
that would, in either case, give rise to an event of default pursuant to any
provision under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose) on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or shall
be made, the basis for the commencement of a second Payment Blockage Period by
the representative for, or the holders of, such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by
Section 11.03(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness
(proportionately to such holders on the basis of the respective amount of
Senior Indebtedness held by such holders) or their respective representatives,
as their respective interests may appear. The Trustee shall be entitled to rely
on information regarding amounts then due and owing on the Senior Indebtedness,
if any, received from the holders of Senior Indebtedness (or their
representatives) or, if such information is not received from such holders or
their representatives, from the Company and only amounts included in the
information provided to the Trustee shall be paid to the holders of Senior
Indebtedness.
Nothing contained in this Article XI shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
provided that all Senior Indebtedness thereafter due or declared to be due
shall first be paid in full in cash or cash equivalents before the Holders are
entitled to receive any payment of any kind or character with respect to
Obligations on any Senior Subordinated Obligations.
SECTION 11.04. Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration (although the failure to
give any such notice shall not affect the subordination provisions of this
Article XI).
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SECTION 11.05. Notice by Company. The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of Senior Subordinated
Obligations pursuant to the provisions of this Article XI (although the failure
to give any such notice shall not affect the subordination provisions of this
Article XI). Regardless of anything to the contrary contained in this Article
XI or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Indebtedness or of any other facts which would prohibit the making
of any payment to or by the Trustee unless and until the Trustee shall have
received notice in writing from the Company, or from a holder of Senior
Indebtedness or a representative therefor and, prior to the receipt of any such
written notice, the Trustee shall be entitled to assume (in the absence of
actual knowledge to the contrary) that no such facts exist.
SECTION 11.06 Subrogation. (a) Subject to the payment in full in cash or
cash equivalents of all Senior Indebtedness, the Holders of the Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the Notes shall be paid in full;
and, for the purposes of such subrogation, no such payments or distributions to
the holders of the Senior Indebtedness by or on behalf of the Company or by or
on behalf of the Holders by virtue of this Article XI which otherwise would
have been made to the Holders shall, as between the Company and the Holders of
the Notes, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article XI
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XI shall have been
applied, pursuant to the provisions of this Article XI, to the payment of all
amounts payable under Senior Indebtedness, then in such case, the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount required to make payment in full, in cash or cash
equivalents, of such Senior Indebtedness of such holders.
SECTION 11.07. Relative Rights. Nothing contained in this Article XI or
elsewhere in this Indenture or in the Notes is intended to or shall impair, as
between the Company and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of and interest
on the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
XI of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any payment or distribution of assets or securities of the Company referred to
in this Article XI, the Trustee, subject to the provisions of Sections 7.01 and
7.02, and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which any liquidation, dissolution,
winding-up or reorganization proceedings are pending, or a
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certificate of the receiver, trustee in bankruptcy, liquidating trustee or
agent or other Person making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XI. Nothing in this Article XI shall apply to the claims of, or
payments to, the Trustee in its capacity as such under or pursuant to Section
7.07. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any evidence
is required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XI, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 11.08. Subordination May Not Be Impaired by Company. (a) No
right of any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act by any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section
11.08, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article XI or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner,
place, terms or time of payment of, or renew or alter, Senior Indebtedness or
any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (3)
release any Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 11.09. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their representative (if
any).
Upon any payment or distribution of assets of the Company referred to in
this Article XI, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon
any certificate of such representative or of
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the liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XI.
SECTION 11.10. Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article XI or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the Notes,
unless the Trustee shall have received at its Corporate Trust Office at least
one Business Day prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article XI (although the receipt of such payment shall otherwise be
subject to the applicable provisions of this Article XI). Only the Company, a
holder of Senior Indebtedness, or a representative of such holder may give the
notice. Nothing in this Article XI shall impair the claims of, or payments to,
the Trustee in its capacity as such under or pursuant to Section 7.07. Nothing
in this Section 11.10 is intended to or shall relieve any Holder of Notes from
the obligations imposed under Sections 11.02 or 11.03 with respect to
distributions received (whether from the Trustee or otherwise) in violation of
the provisions hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 11.11. Authorization to Effect Subordination. Each Holder of the
Notes by such Holder's acceptance thereof authorizes and expressly directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effect the subordination provisions contained in this Article
XI, and appoints the Trustee such Holder's attorney-in-fact for such purpose,
including, in the event of any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of the Company tending towards liquidation or reorganization of the business
and assets of the Company, the immediate filing of a claim for the unpaid
balance of such Holder's Notes in the form required in said proceedings and
cause said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in any proceeding referred to in Section
6.09 prior to 30 days before the expiration of the time to file such claim or
claims, then any of the holders of the Senior Indebtedness or their
representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed
to authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their representative to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 11.12. Amendments. The provisions of this Article XI (including
all defined terms used herein) shall not be amended or modified without the
written consent of the holders of Senior Indebtedness to the extent required by
Section 9.01 or 9.02 as the case may be.
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ARTICLE XII
SUBORDINATION OF NOTE GUARANTEES
SECTION 12.01. Agreement to Subordinate. Each Guarantor covenants and
agrees, and each Holder of the Notes, by its acceptance thereof, likewise
covenants and agrees, (i) that each Note Guarantee shall be issued, and made,
subject to the provisions of this Article XII, and each Person holding any
Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all obligations on the Note
Guarantees (including all Senior Subordinated Obligations of each Guarantor) by
each Guarantor shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in
cash or cash equivalents of all existing and future Senior Indebtedness,
including, without limitation, each Guarantor's obligations under or with
respect to the Credit Agreement and (ii) that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness, and that each holder of Senior Indebtedness whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Indebtedness in reliance upon the covenants and
provisions contained in this Indenture and the Note Guarantees.
SECTION 12.02. Liquidation; Dissolution; Bankruptcy. (a) Except with
respect to the money, securities or proceeds held in an irrevocable trust for
the termination or defeasance and discharge of this Indenture in accordance
with Article VIII hereof, as long as all of the conditions to deposit into such
trust were satisfied at the time of such deposit, upon any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to such Guarantor or its property, whether voluntary or
involuntary, all amounts due or to become due upon all Senior Indebtedness
(including any interest accruing subsequent to the filing of a petition for
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) shall
first be paid in full in cash or cash equivalents, before any payment or
distribution of any kind or character is made on account of any Senior
Subordinated Obligations, or for the acquisition of any of the Notes for cash,
property, securities or otherwise or any distribution with respect to the
Notes, whether of cash, property, securities or otherwise. Before any payment
may be made by, or on behalf of, any Guarantor on any Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with this Indenture, as long as all
of the conditions to deposit into such trust were satisfied at the time of such
deposit) upon any such dissolution, winding up, liquidation or reorganization,
all Senior Indebtedness (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) must be paid in full in cash or cash equivalents.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of any Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy,
85
insolvency, receivership, fraudulent conveyance or similar law, then, if such
payment is recovered by, or paid over to, such receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person, the Senior Indebtedness or
part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred. To the extent
that the obligation to repay any Senior Indebtedness is declared to be
fraudulent, invalid, or otherwise set aside under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then the obligation so
declared fraudulent, invalid or otherwise set aside (and all other amounts that
would come due with respect thereto had such obligation not been so affected)
shall be deemed to be reinstated and outstanding as Senior Indebtedness for all
purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of any Guarantor of any kind or character,
whether in cash, property, securities or otherwise, to which the Holders of the
Notes or the Trustee on behalf of the Holders of the Notes would be entitled,
but for Section 12.02(a) or Section 12.02(b), shall be made by any Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution for the Holders of the Notes
or the Trustee prior to payment in full in cash or cash equivalents of all
Senior Indebtedness, such payment or distribution shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (proportionately to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
(d) The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another corporation or the liquidation or dissolution of a
Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article V hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 12.02 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assume
the respective Guarantor's obligations hereunder in accordance with Article V.
SECTION 12.03. Default on Designated Senior Indebtedness. (a) No direct or
indirect payment by or on behalf of any Guarantor of Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with Sections 8.01, 8.02 or 8.03, as
long as all of the conditions to deposit into such trust were satisfied at the
time of such deposit), whether pursuant to the terms of the Notes or any Note
Guarantee or upon acceleration or otherwise shall be made if, at the time of
such payment, there exists a default in the payment of all or any portion of
the obligations on any Senior Indebtedness and such default shall not have been
cured or waived or the benefits of this sentence waived by or on behalf of the
holders of such Senior Indebtedness. In addition, no payment of Senior
Subordinated Obligations (other than with the money, securities or proceeds
held under any defeasance trust established in accordance with Sections 8.01,
8.02 or 8.03, as long as all of the conditions to deposit into such trust were
satisfied at the time of such deposit)
86
may be made by or on behalf of any Guarantor upon or in respect of the Notes
during any Payment Blockage Period (unless, in each case, such Payment Blockage
Period shall be terminated by written notice to the Trustee from such trustee
of, or other representative for, the holders of the Designated Senior
Indebtedness in respect of which such Payment Blockage Period was commenced or
by payment in full in cash or cash equivalents of such Designated Senior
Indebtedness (and any other Designated Senior Indebtedness with an event of
default then permitting acceleration) or all events of default with respect to
all Designated Senior Indebtedness then outstanding have been cured or waived).
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by
Section 12.03(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness
(proportionately to such holders on the basis of the respective amount of
Senior Indebtedness held by such holders) or their respective representatives,
as their respective interests may appear. The Trustee shall be entitled to rely
on information regarding amounts then due and owing on the Senior Indebtedness,
if any, received from the holders of Senior Indebtedness (or their
representatives) or, if such information is not received from such holders or
their representatives, from the Company and only amounts included in the
information provided to the Trustee shall be paid to the holders of Senior
Indebtedness.
Nothing contained in this Article XII shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
provided that all Senior Indebtedness thereafter due or declared to be due
shall first be paid in full in cash or cash equivalents before the Holders are
entitled to receive any payment of any kind or character with respect to any
Senior Subordinated Obligations.
SECTION 12.04. Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration (although the failure to
give any such notice shall not affect the subordination provisions of this
Article XII).
SECTION 12.05. Notice by Company or Guarantors. The Company or the
respective Guarantor shall give prompt written notice to the Trustee of any
fact known to the Company or any Guarantor which would prohibit the making of
any payment to or by the Trustee in respect of Senior Subordinated Obligations
pursuant to the provisions of this Article XII (although the failure to give
any such notice shall not affect the subordination provisions of this Article
XII). Regardless of anything to the contrary contained in this Article XII or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Indebtedness or
a representative therefor and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist.
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SECTION 12.06 Subrogation. (a) Subject to the payment in full in cash or
cash equivalents of all Senior Indebtedness, the Holders of the Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of any Guarantor
applicable to the Senior Indebtedness until the Notes shall be paid in full;
and, for the purposes of such subrogation, no such payments or distributions to
the holders of the Senior Indebtedness by or on behalf of any Guarantor or by
or on behalf of the Holders by virtue of this Article XII which otherwise would
have been made to the Holders shall, as between the respective Guarantor and
the Holders of the Notes, be deemed to be a payment by the respective Guarantor
to or on account of the Senior Indebtedness, it being understood that the
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of all
amounts payable under Senior Indebtedness, then in such case, the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount required to make payment in full, in cash or cash
equivalents, of such Senior Indebtedness of such holders.
SECTION 12.07. Relative Rights. Nothing contained in this Article XII or
elsewhere in this Indenture or in the Notes is intended to or shall impair, as
between the Guarantors and the Holders, the obligation of each Guarantor, which
is absolute and unconditional, to pay to the Holders all obligations pursuant
to its Note Guarantee in accordance with the terms thereof, or is intended to
or shall affect the relative rights of the Holders and creditors of the
Guarantors other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of Senior Indebtedness in respect of cash, property or securities of any
Guarantor received upon the exercise of any such remedy. Upon any payment or
distribution of assets or securities of any Guarantor referred to in this
Article XII, the Trustee, subject to the provisions of Sections 7.01 and 7.02,
and the Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any liquidation, dissolution,
winding-up or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other Person
making any payment or distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Guarantors, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XII. Nothing in this Article XII shall apply to the claims of, or payments to,
the Trustee in its capacity as such under or pursuant to Section 7.07. The
Trustee shall be entitled to rely on the delivery to it of a written notice by
a Person representing himself or itself to be a holder of any Senior
Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
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In the event that the Trustee determines in good faith that any evidence
is required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XII, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 12.08. Subordination May Not Be Impaired by any Guarantor. (a) No
right of any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Guarantor or by any
act or failure to act by any such holder, or by any non-compliance by any
Guarantor with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this Section
12.08, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article XII or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner,
place, terms or time of payment of, or renew or alter, Senior Indebtedness or
any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (3)
release any Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against
any Guarantor and any other Person.
SECTION 12.09. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their representative (if
any).
Upon any payment or distribution of assets of any Guarantor referred to in
this Article XII, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the respective Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII.
SECTION 12.10. Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article XII or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the Notes,
unless the Trustee shall have received at its Corporate Trust Office at least
one Business Day prior to the date of such payment written notice of facts that
would
89
cause the payment of any Obligations with respect to the Notes to violate this
Article XII (although the receipt of such payment shall otherwise be subject to
the applicable provisions of this Article XII). Only the Company, a holder of
Senior Indebtedness, or a representative of such holder may give the notice.
Nothing in this Article XII shall impair the claims of, or payments to, the
Trustee in its capacity as such under or pursuant to Section 7.07. Nothing in
this Section 12.10 is intended to or shall relieve any Holder of Notes from the
obligations imposed under Sections 12.02 or 12.03 with respect to distributions
received (whether from the Trustee or otherwise) in violation of the provisions
hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 12.11. Authorization to Effect Subordination. Each Holder of the
Notes by such Holder's acceptance thereof authorizes and expressly directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effect the subordination provisions contained in this Article
XII, and appoints the Trustee such Holder's attorney-in-fact for such purpose,
including, in the event of any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of any Guarantor tending towards liquidation or reorganization of the business
and assets of any Guarantor, the immediate filing of a claim for the unpaid
balance of such Holder's Notes in the form required in said proceedings and
cause said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in any proceeding referred to in Section
6.09 prior to 30 days before the expiration of the time to file such claim or
claims, then any of the holders of the Senior Indebtedness or their
representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed
to authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their representative to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 12.12. Amendments. The provisions of this Article XII (including
all defined terms used herein) shall not be amended or modified without the
written consent of the holders of Senior Indebtedness to the extent required by
Section 9.01 or 9.02, as the case may be.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act of 1939. Prior to the effectiveness of
the Registration Statement, this Indenture shall incorporate and be governed by
the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA. After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that
are required to be a part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
90
SECTION 13.02. Notices. Any notice, request or communication shall be
sufficiently given if in writing and delivered in person, mailed by first-class
mail or sent by telecopier transmission addressed as follows:
if to the Company:
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
if to the Trustee:
Bank One Trust Company, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it at
its address as it appears on the Security Register by first-class mail and
shall be sufficiently given to the Holder if so mailed within the time
prescribed. Any notice or communication shall also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Copies of
any such communication or notice to a Holder shall also be mailed to the
Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder as provided herein
or any defect in any such notice or communication shall not affect its
sufficiency with respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, and except as otherwise provided in
this Indenture, if a notice or communication is mailed in the manner provided
in this Section 13.02, it is duly given, whether or not the addressee receives
it.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
91
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
SECTION 13.03. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate 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
(ii) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 13.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, the
person has made such examination or investigation as is necessary to
enable the person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
92
SECTION 13.06. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note shall not be a Business Day, then payment of principal of,
premium, if any, or interest on such Note, as the case may be, need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date, Payment Date or
Redemption Date, or at the Stated Maturity or date of maturity of such Note;
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date
of maturity, as the case may be.
SECTION 13.07. Governing Law. This Indenture, the Notes and the Note
Guarantees shall be governed by the laws of the State of New York. The Trustee,
the Company and the Holders agree to submit to the jurisdiction of the courts
of the State of New York in any action or proceeding arising out of or relating
to this Indenture or the Notes.
SECTION 13.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.09. No Recourse Against Others. No recourse for the payment of
the principal of, premium, if any, or interest on any of the Notes or Note
Guarantees, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
contained in this Indenture or in any of the Notes, or because of the creation
of any Indebtedness represented thereby, shall be had against any incorporator
or against any past, present or future partner, stockholder, other
equityholder, officer, director, employee or controlling person, as such, of
the Company, any Guarantor or of any successor Person, either directly or
through the Company, any Guarantor or any successor Person, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes
and the Note Guarantees.
SECTION 13.10. Successors. All agreements of the Company in this Indenture
and the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 13.12. Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 13.13. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been
93
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms and provisions
hereof.
94
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer and Treasurer
GUARANTORS:
VHS ACQUISITION CORPORATION
VHS OF PHOENIX, INC.
VHS OUTPATIENT CLINICS, INC.
VHS OF ARROWHEAD, INC.
PLEASANT PROPERTIES, INC.
VHS OF SOUTH PHOENIX, INC.
VHS IMAGING CENTERS, INC.
VHS OF ANAHEIM, INC.
VHS OF ORANGE COUNTY, INC.
VHS HOLDING COMPANY, INC.
VHS OF HUNTINGTON BEACH, INC.
VHS OF ILLINOIS, INC.
XXXXXXX HEALTH PROVIDERS, INC.
XXXXXXX MANAGEMENT SERVICES, INC.
MIDWEST CLAIMS PROCESSING, INC.
PROS TEMPORARY STAFFING, INC.
WATERMARK PHYSICIAN SERVICES, INC.
VHS GENESIS LAB, INC.
XXXXXXX MEDICAL RECORDS, INC.
VANGUARD HEALTH MANAGEMENT, INC.
TRINITY MEDCARE, INC.
V-II ACQUISITION CO., INC.
VANGUARD HEALTH FINANCIAL COMPANY, INC.
VHS OF RANCOCAS, INC.,
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer & Treasurer
Duly authorized to sign on behalf of
each of the foregoing entities
95
GUARANTORS (Cont.):
VHS ACQUISITION SUBSIDIARY NUMBER 1, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 2, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 3, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 4, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 5, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 6, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 7, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 8, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 9, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 10, INC.,
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer & Treasurer
Duly authorized to sign on behalf of
each of the foregoing entities
THE ANAHEIM VHS LIMITED PARTNERSHIP
By: VHS of Anaheim, Inc., its General
Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer &
Treasurer
THE HUNTINGTON BEACH VHS LIMITED PARTNERSHIP
By: VHS of Huntington Beach, Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer & Treasurer
96
GUARANTORS (Cont.):
HEALTHCARE COMPLIANCE, L.L.C.
By: Vanguard Health Management, Inc., its
Member
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer &
Treasurer
THE VHS ARIZONA IMAGING CENTERS LIMITED
PARTNERSHIP
By: VHS Imaging Centers, Inc., its General
Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer &
Treasurer
BANK ONE TRUST COMPANY, N.A.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Officer
97
Exhibit A
[APPLICABLE LEGENDS]
[FACE OF NOTE]
VANGUARD HEALTH SYSTEMS, INC.
9-3/4% Senior Subordinated Note due 2011
[CUSIP: 000000XX0]1
[CUSIP: X0000XXX0
ISIN: USU9216KAA17]2
No. _____
VANGUARD HEALTH SYSTEMS, INC. a Delaware corporation (the "Company,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to _____________, or its registered
assigns, the principal sum of ____________ dollars ($____) on August 1, 2011.
Interest Payment Dates: February 1 and August 1, commencing February
1, 2002.
Regular Record Dates: January 15 and July 15.
The Guarantors (which term is defined in the Indenture hereinafter
referred to) have jointly and severally, fully and unconditionally guaranteed
on a senior subordinated basis the payment of principal of, premium, if any,
and interest on the Notes.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
---------
1 Include in Notes other than Regulation S Global Notes or Regulation
S Physical Notes.
2 Include in Regulation S Global Notes and Regulation S Physical
Notes.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
VANGUARD HEALTH SYSTEMS, INC.
By:
-----------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 9-3/4% Senior Subordinated Notes due 2011 described in the
within-mentioned Indenture.
Date: [________, ____]
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By:
-----------------------------------
Authorized Signer
A-2
[REVERSE SIDE OF NOTE]
VANGUARD HEALTH SYSTEMS, INC.
9-3/4% Senior Subordinated Note due 2011
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. Principal and Interest.
The Company will pay the principal of this Note on August 1, 2011.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of
the Notes at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
February 1, 2002.
If (a) neither a registration statement with respect to an exchange
offer for the Notes ("Exchange Offer Registration Statement") under the
Securities Act nor a shelf registration statement (the "Shelf Registration
Statement") under the Securities Act with respect to resales of the Notes is
declared effective by the United States Securities and Exchange Commission (the
"SEC"), on or before January 26, 2002 in accordance with the terms of the
Registration Rights Agreement dated July 30, 2001 among the Company, each of
the Guarantors and Xxxxxx Xxxxxxx & Co. Incorporated, Banc of America
Securities LLC, Credit Suisse First Boston Corporation, UBS Warburg LLC and
First Union Securities, Inc. (the "Registration Rights Agreement"), (b)
Vanguard has not consummated a registered exchange offer ("Registered Exchange
Offer") on or before February 26, 2002 in accordance with the terms of the
Registration Rights Agreement, or (c) a Shelf Registration Statement has become
effective and thereafter is interfered with by any stop order, injunction, or
other order or requirement of the SEC or any other governmental agency or court
(other than interference in respect of such Shelf Registration Statement
resulting from a requirement of the SEC that a new applicable Registration
Statement be filed as a result of the addition of Guarantors subsequent to the
effectiveness of such Shelf Registration Statement, but only to the extent that
the period of any resulting suspension of the use of such Shelf Registration
Statement pursuant to the penultimate paragraph of Section 3 of the
Registration Rights Agreement, taken together with all other such suspensions
during any 365 day period, does not exceed the limitations expressed in the
last sentence thereof) (each such event referred to in clauses (a) through (c)
above, a "Registration Default"), then the annual interest rate borne by the
Notes shall be immediately increased by 0.5% from the rate shown above until
the earlier of (i) the date that all Registration Defaults have been cured and
(ii) all of the Notes cease to be "Registrable Securities" (as that term is
defined in the Registration Rights Agreement). The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 30, 2001;
provided that, if there is no
A-3
existing default in the payment of interest and this Note is authenticated
between a Regular Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each February 1 and August
1, commencing February 1, 2002 to the persons who are Holders (as reflected in
the Security Register at the close of business on the January 15 or July 15
immediately preceding the Interest Payment Date), in each case, even if the
Note is cancelled on registration of transfer or registration of exchange after
such record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after August 1, 2011.
The Company will pay principal, premium, if any, and as provided
above, interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. However, the Company may
pay principal, premium, if any, and interest by its check payable in such
money. It may mail an interest check to a Holder's registered address (as
reflected in the Security Register). If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
The Notes may be exchanged or transferred at the office or agency of
the Company in the Borough of Manhattan, the City of New York. Initially, Bank
One Trust Company, N.A., a national banking corporation, 00 Xxxx Xxxxxx, 0xx
Xxxxx, Window 2, New York, New York, 10005 will serve as such office. If you
give the Company wire transfer instructions, the Company will pay all
principal, premium and interest on your Notes in accordance with your
instructions. If the Company is not given wire transfer instructions, payments
of principal, premium and interest will be made at the office or agency of the
paying agent which will initially be the Trustee, unless the Company elects to
make interest payments by check mailed to the Holders.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of July 30,
2001 (the "Indenture"), among the Company, each of the Guarantors and Bank One
Trust Company, N.A., as trustee (the "Trustee"). The terms of the Notes include
those stated in the Indenture and those
A-4
made part of the Indenture by reference to the Trust Indenture Act. The Notes
are subject to all such terms, and Holders are referred to the Indenture and
the Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the
terms of this Note and the terms of the Indenture, the terms of the Indenture
shall control.
The Notes are unsecured senior subordinated obligations of the
Company.
The Company may, subject to Article IV of the Indenture and
applicable law, issue additional Notes under the Indenture.
5. Optional Redemption.
The Notes are redeemable, at the Company's option, in whole or in
part, at any time or from time to time, on or after August 1, 2006 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's last address, as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
that is prior to the Redemption Date to receive interest due on an Interest
Payment Date), if redeemed during the 12-month period commencing August 1 of
the years set forth below:
Redemption
Year Price
------------------------------------ ----------
2006................................ 104.875%
2007................................ 103.250%
2008................................ 101.625%
2009 and thereafter................. 100.000%
In addition, at any time prior to August 1, 2004, the Company may
redeem up to 35% of the aggregate principal amount of the Notes with the Net
Cash Proceeds of one or more sales of Capital Stock of the Company (other than
Disqualified Stock) at a Redemption Price (expressed as a percentage of
principal amount) of 109.750%, plus accrued and unpaid interest to the
Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest
due on an Interest Payment Date); provided that (i) at least 65% of the
aggregate principal amount of Notes originally issued on the Closing Date
remains outstanding after each such redemption and (ii) notice of such
redemption is mailed within 90 days after each such sale of Capital Stock.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
X-0
0. Xxxxxxxxxx upon Change of Control.
Within 30 days after the occurrence of a Change of Control, the
Company must commence and consummate an offer to purchase (the "Offer to
Purchase") all of the Notes then outstanding, at purchase price equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any, to
the date of purchase (the "Payment Date").
The Company will not be required to make an Offer to Purchase if a
third party makes an offer to purchase the Notes in the manner, at the times
and at the price otherwise in compliance with the Indenture and purchases all
of the Notes validly tendered and not withdrawn.
Prior to the commencement (or mailing) of the Offer to Purchase, but
in any event within 30 days following the occurrence of a Change of Control,
the Company must either (a) repay in full and terminate all commitments under
Indebtedness under the Credit Agreement and all other Senior Indebtedness the
terms of which require repayment upon a Change of Control or offer to repay in
full and terminate all commitments under all Indebtedness under the Credit
Agreement and all other such Senior Indebtedness and to repay the Indebtedness
owed to, and terminate all commitments of, each lender which has accepted such
offer; or (b) obtain the requisite consents under the Credit Agreement and all
other Senior Indebtedness to permit the repurchase of the Notes as provided
above.
7. Offer to Purchase in connection with Asset Sales.
If, as of the last day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
Section 4.10 of the Indenture totals at least $10 million, the Company must
commence, not later than 30 days after such date, and consummate an Offer to
Purchase from the Holders (and if required by the terms of any Pari Passu
Indebtedness, from the holders thereof), on a pro rata basis, an aggregate
principal amount of Notes (and Pari Passu Indebtedness) equal to the Excess
Proceeds on such date, at a purchase price equal to 100% of their principal
amount, plus accrued interest (if any) to the Payment Date.
8. Mandatory Redemption.
Except as described in paragraphs 6 and 7 above, the Company is not
required to make mandatory redemption of, or sinking fund payments with respect
to, the Notes.
9. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder
may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need
not register the transfer or exchange of any Notes for a period of 15 days
before the day of mailing of a notice of redemption of Notes selected for
redemption.
A-6
10. Persons Deemed Owners.
The person in whose name a Note is registered (the "Holder") shall be
treated as the owner of a Note for all purposes.
11. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain provisions thereof, and (b) to the Stated Maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented by the Company and the Trustee with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency in the Indenture and make
any change that does not materially and adversely affect the rights of any
Holder.
14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur
additional Indebtedness, make Restricted Payments, suffer to exist restrictions
on the ability of Restricted Subsidiaries to make certain payments to the
Company, issue Capital Stock of Restricted Subsidiaries, Guarantee
Indebtedness, engage in transactions with Affiliates, suffer to exist or incur
Liens, use the proceeds from Asset Sales, or merge, consolidate or transfer
substantially all of its assets. Within 120 days after the end of the fiscal
year, the Company shall deliver to the Trustee an Officers' Certificate stating
whether or not the signers thereof know of any Default or Event of Default
under such restrictive covenants.
15. Successor Persons.
When a successor person or other entity assumes all the obligations
of its predecessor under the Notes and the Indenture in accordance with Section
5.01 of the Indenture, the successor person shall succeed to and be substituted
for the predecessor person.
A-7
16. Subordination.
The Notes and the Note Guarantees thereof by the Guarantors are
subordinated pursuant to the provisions of Article XI and Article XII of the
Indenture
17. Defaults and Remedies.
Any of the following events constitutes an "Event of Default" under
the Indenture:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise, whether or not such payment is prohibited by Article
XI of the Indenture;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days,
whether or not such payment is prohibited by Article XI of the Indenture;
(c) (i) (A) The merger or consolidation of the Company or any
Subsidiary Guarantor or (B) the transfer of all or substantially all of the
assets and property of the Company or any Subsidiary Guarantor in breach of
Section 5.01 or (ii) the failure by the Company to make or consummate an Offer
to Purchase in accordance with Section 4.10 or Section 4.12 of the Indenture;
(d) the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement in the Indenture or
under the Notes (other than a default specified in clause (a), (b) or (c)
above) and such default or breach continues for a period of 60 consecutive days
after written notice specifying the default (and demanding that such default be
remedied) by the Trustee or the Holders of 25% or more in aggregate principal
amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Restricted Subsidiary having an outstanding principal
amount of $10 million or more in the aggregate for all such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created,
(A) an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (B) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance or
indemnity provided by a reputable and creditworthy person) for the payment of
money in excess of $10 million in the aggregate for all such final judgments or
orders against all such Persons (treating any deductibles, self-insurance or
retention, or in the case of indemnity, amounts excluded by baskets, caps,
thresholds or similar limitations, as not so covered) shall be rendered against
the Company, any Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary and shall not
be paid or discharged, and there
A-8
shall be any period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company, any Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company, any Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary or
for all or substantially all of the property and assets of the Company, any
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company, any Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(h) the Company, any Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary (A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company,
any Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, or for all or
substantially all of the property and assets of the Company, any Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary or (C) effects any general assignment for
the benefit of creditors; or
(i) any Subsidiary Guarantor repudiates its obligations under its
Note Guarantee or, except as permitted by the Indenture, any Note Guarantee is
determined to be unenforceable or invalid or shall for any reason cease to be
in full force and effect.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may, and at the direction of the Holders
of at least 25% in aggregate principal amount of the Notes then outstanding the
Trustee shall, declare all the Notes to be due and payable unless there are any
amounts outstanding under the Credit Agreement, in which case the same shall
become immediately due and payable upon the first to occur of an acceleration
under the Credit Agreement or five business days after receipt by the Company
and the representative or other agent under the Credit Agreement (as defined
therein) of notice of such declaration (but only if such Event of Default is
then continuing). Upon a declaration of acceleration, such principal of,
premium, if any, and accrued interest shall be immediately due and payable. In
the event of a declaration of acceleration because an Event of Default set
forth in clause (e) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default shall be cured or waived
A-9
within 60 days after the declaration of acceleration with respect thereto. If a
bankruptcy or insolvency default with respect to the Company occurs, the Notes
automatically become immediately due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of at least a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
18. Guarantee.
The Company's obligations under the Notes are fully and
unconditionally guaranteed on a senior subordinated basis, jointly and
severally, by the Guarantors.
19. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become owner or pledgee of Notes and may otherwise deal with the
Company, the Guarantors or their Affiliates as if it were not the Trustee.
20. No Recourse Against Others.
No incorporator or any past, present or future partner, stockholder,
other equityholder, officer, director, employee or controlling person, as such,
of the Company, any Guarantor or of any successor Person shall have any
liability for any obligations of the Company or any Guarantor under the Notes,
the Note Guarantees or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes and the Note Guarantees.
21. Authentication.
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
22. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to Vanguard Health
Systems, Inc; 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxxxx 00000,
Attention: Chief Financial Officer.
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
----------------------------------
Please print or typewrite name and address including zip code of assignee
----------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _______________________ attorney to transfer said Note on the books
of the Company with full power of substitution in the premises.
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[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL NOTES
OTHER THAN EXCHANGE NOTES, TEMPORARY REGULATION S
GLOBAL NOTES AND UNLEGENDED PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ](a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ](b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date: ____________________ _____________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
A-12
Signature Guarantee: _______________________
Signature must be guaranteed by a participant in a recognized
signature guaranty medallion program or other signature guarantor acceptable to
the Trustee.
TO BE COMPLETED BY PURCHASER IF (a) 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 the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date: ____________________ ______________________________________________
NOTICE: To be executed by an executive officer
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.10 or 4.12 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or 4.12 of the Indenture, state the principal amount:
$________________
Date: ________________
Your Signature: ___________________________________
(Sign exactly as your name appears on the other side
of this 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.
A-14
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE3
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Physical Note, or exchanges of a part of
another Global Note or Physical Note for an interest in this Global Note, have
been made:
Principal Amount of Signature of
Amount of increase this Global Note authorized
Amount of decrease in Principal following such signatory of
in Principal Amount Amount of this decrease (or Trustee or Note
Date of Exchange of this Global Note Global Note increase) Custodian
--------------------- ------------------- ------------------ ------------------- ---------------
---------
3 Include only if Note is issued in Global Form.
A-15
Exhibit B
Form of Certificate
--------, ----
Bank One Trust Company, N.A.
[________]
Attention: Corporate Trust Department
Re: Vanguard Health Systems, Inc. (the "Company") 9-3/4% Senior
Subordinated Notes due 2011 (the "Notes")
Dear Sirs:
This letter relates to U.S. $ __________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.02 of
the Indenture dated as of July 30, 2001 (the "Indenture") relating to the
Notes, we hereby certify that we are (or we will hold such securities on behalf
of) a person outside the United States to whom the Notes could be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
principal amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
-----------------------------------
Authorized Signature
B-1
Exhibit C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
----------, ----
Bank One Trust Company, N.A.
[________]
Attention: Corporate Trust Department
Re: Vanguard Health Systems, Inc. (the "Company") 9-3/4% Senior
Subordinated Notes due 2011 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $_______________
aggregate principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
July 30, 2001 (the "Indenture") relating to the Notes and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Notes except in compliance with such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes within the time period referred to in Rule
144(k) of the Securities Act, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act
to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
and, if such transfer is in respect of an aggregate principal amount of less
than $100,000, an Opinion of Counsel acceptable to the Company that such
transfer is in compliance with the Securities Act, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act or
(E) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes from
us a notice advising such purchaser that resales of the Notes are restricted as
stated herein.
3. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as either you or the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
C-1
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By:
-------------------------------------
Authorized Signature
C-2
Exhibit D
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
Bank One Trust Company, N.A.
[________]
Attention: Corporate Trust Department
Re: Vanguard Health Systems, Inc. (the "Company") 9-3/4% Senior
Subordinated Notes due 2011 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933 and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
--------------------------------------
Authorized Signature
D-1
Exhibit E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
____________, among ___________, a __________ (the "Guaranteeing Subsidiary"),
a subsidiary of Vanguard Health Systems, Inc. (or its permitted successor), a
Delaware corporation (the "Company"), the other Guarantors (as defined in the
Indenture referred to herein) and Bank One Trust Company, N.A., as trustee
under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee the
indenture (as amended, the "Indenture"), dated as of July 30, 2001, providing
for the issuance of an aggregate principal amount of up to $300,000,000 of
9-3/4% Senior Subordinated Notes due 2011 (the "Notes");
WHEREAS, Section 4.07 of the Indenture provides that the Guaranteeing
Subsidiary shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee
all of the Company's obligations under the Notes and the Indenture on the terms
and conditions set forth herein and therein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized
to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary, the Company and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms; Conflict. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture. In the
event of any inconsistency between the terms of this Supplemental Indenture and
the Indenture, the terms of the Indenture shall control.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) To jointly and severally Guarantee to each Holder of Notes under the
Indenture and to the Trustee on behalf of the Holders:
(i) the due and punctual payment of the principal of, premium, if
any, and interest on each Note when and as the same shall become
due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the
overdue principal of, premium, if any, and interest on the
Notes, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the
Holders or the Trustee, all in accordance with the terms the
Notes and the Indenture; and
E-1
(ii) in the case of any extension of time of payment or renewal of
any Notes or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, at Stated Maturity, by
acceleration or otherwise, subject to the limitations set forth
in Section 10.01 of the Indenture.
(b) The obligations hereunder are absolute and unconditional, and nothing
contained herein, or in the Indenture or in the Notes (i) is intended
to or shall impair, as among any Guarantor and the Holders of the
Notes, the obligations of the Guaranteeing Subsidiary, upon failure
by the Company, to pay to the Holders of the Notes the principal of,
premium, if any, and interest on the Notes as and when the same shall
become due and payable in accordance with their terms, or (ii) is
intended to or shall affect the relative rights of the Holders and
creditors of such Guarantor, nor shall anything herein or therein
prevent any Holder or the Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under the
Indenture.
Without limiting the foregoing, nothing contained herein, or in the
Indenture or in the Notes, will restrict the right of the Trustee or
the Holders to take any action to declare the Note Guarantee to be
due and payable prior to the Stated Maturity of any Notes pursuant to
Section 6.02 of the Indenture or to pursue any rights or remedies
thereunder.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first
against the Company, the benefit of discussion, protest or notice
with respect to any such Note or debt evidenced thereby and all
demands whatsoever.
(d) This Note Guarantee shall not be discharged as to any Note except by
payment in full of the principal thereof, premium, if any, and
interest thereon and as provided in Sections 8.01, 8.02 and 8.03.
(e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, any Guarantor, or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in
relation to the Company or such Guarantor, any amount paid to the
Trustee or such Holder in respect of a Note, this Note Guarantee, to
the extent theretofore discharged, shall be reinstated in full force
and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.
E-2
(g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article VI of the
Indenture for the purposes of this Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y)
in the event of any declaration of acceleration of such obligations
as provided in Article VI of the Indenture, such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor to the extent provided in the Indenture.
3. Subordination of Guarantee. The Note Guarantee shall be subordinated
pursuant to, and in accordance with the terms and provisions of Article XII of
the Indenture, which are deemed incorporated by reference herein.
4. Execution and Delivery. The Note Guarantee shall not be valid or become
obligatory for any purpose with respect to a Note until the certificate of
authentication on such Note shall have been signed by or on behalf of the
Trustee.
5. Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms. The
Guaranteeing Subsidiary may not sell or otherwise dispose of all or
substantially all of its assets, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another corporation,
Person or entity whether or not affiliated with such Guarantor except in
accordance with the provisions set forth in the Indenture, including, without
limitation, Section 5.01 of the Indenture.
6. Releases. The Note Guarantee of the Guaranteeing Subsidiary will be released
in accordance with the provisions set forth in the Indenture, including,
without limitation, Section 10.3 of the Indenture.
7. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
8. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity, legality or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
E-3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
[GUARANTEEING SUBSIDIARY]
By:
--------------------------------------------------
Name:
Title:
VANGUARD HEALTH SYSTEMS, INC.
By:
--------------------------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, N.A, as Trustee
By:
--------------------------------------------------
Name:
Title:
E-4
Exhibit F
SENIOR SUBORDINATED NOTE GUARANTEE
For value received, the undersigned (including any successor Person
under the Indenture (as hereinafter defined)) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in, and subject to the
provisions of, the Indenture dated as of July 30, 2001 (the "Indenture")
between Vanguard Health Systems, Inc. (the "Company"), the guarantors named
therein (the "Guarantors") and Bank One Trust Company, N.A., as trustee (the
"Trustee"), (a) the due and punctual payment by the Company of the principal
of, premium, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment by the Company of interest on overdue principal of and
premium, if any, and, to the extent permitted by law, interest on, the Notes
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms of such Note and
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
by the Company in full when due or performed in accordance with the terms of
the extension or renewal, at Stated Maturity, by acceleration or otherwise.
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to this Note Guarantee and the Indenture are expressly set
forth in Article X of the Indenture. The obligations of the undersigned
pursuant to this Note Guarantee are subordinated to all Senior Indebtedness of
the undersigned on the terms set forth in Article XII of the Indenture.
Reference is hereby made to the Indenture for the precise terms of this Note
Guarantee. Each Holder of a Note, by accepting the same, agrees to and shall be
bound by such provisions.
No incorporator or any past, present or future partner, stockholder,
other equityholder, officer, director, employee or controlling person, as such,
of any Guarantor or any successor Person shall have any liability for any
obligations under this Senior Subordinated Note Guarantee by reason of such
person's status as incorporator, partner, stockholder, other equityholder,
officer, director, employee or controlling person of a Guarantor. Each Holder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and this
Senior Subordinated Guarantee.
Each Holder of a Note by accepting a Note agrees that any Guarantor
named below shall have no liability with respect to its Guarantee if such
Guarantor otherwise is not liable in respect of its Guarantee in accordance
with the terms of the Indenture.
The Note Guarantee shall not be valid or become obligatory for any
purpose with respect to a Note until the certificate of authentication on such
Note shall have been signed by or on behalf of the Trustee.
The terms of the Indenture, including, without limitation, Articles X
and XII of the Indenture, are incorporated herein by reference. Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
unless otherwise indicated.
F-1
IN WITNESS WHEREOF, the undersigned have caused this Senior
Subordinated Note Guarantee to be duly executed as of [________ __, 20__].
VHS ACQUISITION CORPORATION
VHS OF PHOENIX, INC.
VHS OUTPATIENT CLINICS, INC.
VHS OF ARROWHEAD, INC.
PLEASANT PROPERTIES, INC.
VHS OF SOUTH PHOENIX, INC.
VHS IMAGING CENTERS, INC.
VHS OF ANAHEIM, INC.
VHS OF ORANGE COUNTY, INC.
VHS HOLDING COMPANY, INC.
VHS OF HUNTINGTON BEACH, INC.
VHS OF ILLINOIS, INC.
XXXXXXX HEALTH PROVIDERS, INC.
XXXXXXX MANAGEMENT SERVICES, INC.
MIDWEST CLAIMS PROCESSING, INC.
PROS TEMPORARY STAFFING, INC.
WATERMARK PHYSICIAN SERVICES, INC.
VHS GENESIS LAB, INC.
XXXXXXX MEDICAL RECORDS, INC.
VANGUARD HEALTH MANAGEMENT, INC.
TRINITY MEDCARE, INC.
V-II ACQUISITION CO., INC.
VANGUARD HEALTH FINANCIAL COMPANY, INC.
VHS OF RANCOCAS, INC.,
By:
------------------------------------
Name:
Title:
Duly authorized to sign on behalf of
each of the foregoing entities
F-2
VHS ACQUISITION SUBSIDIARY NUMBER 1, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 2, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 3, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 4, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 5, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 6, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 7, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 8, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 9, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 10, INC.,
By:
------------------------------------
Name:
Title:
Duly authorized to sign on behalf of
each of the foregoing entities
THE ANAHEIM VHS LIMITED PARTNERSHIP
By: VHS of Anaheim, Inc., its General
Partner
By:
------------------------------------
Name:
Title:
THE HUNTINGTON BEACH VHS LIMITED
PARTNERSHIP
By: VHS of Huntington Beach, Inc., its
General Partner
By:
------------------------------------
Name:
Title:
F-3
HEALTHCARE COMPLIANCE, L.L.C.
By: Vanguard Health Management, Inc., its
Member
By:
------------------------------------
Name:
Title:
THE VHS ARIZONA IMAGING CENTERS LIMITED
PARTNERSHIP
By: VHS Imaging Centers, Inc., its General
Partner
By:
------------------------------------
Name:
Title:
F-4
