Exhibit T3C
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MAGELLAN HEALTH SERVICES, INC.
9 3/8% SERIES A SENIOR NOTES DUE 2008
9 3/8% SERIES B SENIOR NOTES DUE 2008
INDENTURE
DATED AS OF __________, 2003
HSBC BANK USA,
TRUSTEE
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 Definitions and Incorporation by Reference.......................................................................1
SECTION 1.01. Definitions......................................................................1
SECTION 1.02. Other Definitions...............................................................13
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...............................13
SECTION 1.04. Rules of Construction...........................................................14
ARTICLE 2 The Notes.......................................................................................................14
SECTION 2.01. Form and Dating.................................................................14
SECTION 2.02. Execution and Authentication....................................................14
SECTION 2.03. Registrar and Paying Agent......................................................15
SECTION 2.04. Paying Agent To Hold Money in Trust.............................................15
SECTION 2.05. Noteholder Lists................................................................15
SECTION 2.06. Transfer and Exchange...........................................................15
SECTION 2.07. Replacement Notes...............................................................16
SECTION 2.08. Outstanding Notes...............................................................16
SECTION 2.09. Temporary Notes.................................................................17
SECTION 2.10. Cancellation....................................................................17
SECTION 2.11. Defaulted Interest..............................................................17
SECTION 2.12. CUSIP Numbers...................................................................17
ARTICLE 3 Redemption......................................................................................................17
SECTION 3.01. Notices to Trustee..............................................................17
SECTION 3.02. Selection of Notes To Be Redeemed...............................................17
SECTION 3.03. Notice of Redemption............................................................18
SECTION 3.04. Effect of Notice of Redemption..................................................18
SECTION 3.05. Deposit of Redemption Price.....................................................18
SECTION 3.06. Notes Redeemed in Part..........................................................18
ARTICLE 4 Covenants.......................................................................................................19
SECTION 4.01. Payment of Notes................................................................19
SECTION 4.02. Provisions of Reports and Other Information.....................................19
SECTION 4.03. Limitation on Additional Indebtedness...........................................19
SECTION 4.04. Limitation on Restricted Payments...............................................21
SECTION 4.05. Limitation on Payment Restrictions Affecting Restricted Subsidiaries............23
SECTION 4.06. Limitation on Use of Proceeds from Asset Sales..................................24
SECTION 4.07. Limitation on Transactions with Affiliates......................................26
SECTION 4.08. Change of Control...............................................................26
SECTION 4.09. Compliance Certificate..........................................................28
SECTION 4.10. Further Instruments and Acts....................................................28
SECTION 4.11. Limitation on Liens.............................................................28
SECTION 4.12. Limitation on Sale/Leaseback Transactions.......................................28
SECTION 4.13. Limitation on Layering Debt.....................................................29
SECTION 4.14. Future Subsidiary Guarantors....................................................29
ARTICLE 5 Successor Company...............................................................................................29
SECTION 5.01. Merger, Consolidation or Sale of Assets.........................................29
ARTICLE 6 Defaults and Remedies...........................................................................................30
SECTION 6.01. Events of Default...............................................................30
SECTION 6.02. Acceleration....................................................................31
SECTION 6.03. Other Remedies..................................................................31
SECTION 6.04. Waiver of Past Defaults.........................................................32
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SECTION 6.05. Control by Majority.............................................................32
SECTION 6.06. Limitation on Suits.............................................................32
SECTION 6.07. Rights of Holders to Receive Payment............................................32
SECTION 6.08. Collection Suit by Trustee......................................................32
SECTION 6.09. Trustee May File Proofs of Claim................................................32
SECTION 6.10. Priorities......................................................................33
SECTION 6.11. Undertaking for Costs...........................................................33
SECTION 6.12. Waiver of Stay or Extension Laws................................................33
ARTICLE 7 Trustee.........................................................................................................33
SECTION 7.01. Duties of Trustee...............................................................33
SECTION 7.02. Rights of Trustee...............................................................34
SECTION 7.03. Individual Rights of Trustee....................................................35
SECTION 7.04. Trustee's Disclaimer............................................................35
SECTION 7.05. Notice of Defaults..............................................................35
SECTION 7.06. Reports by Trustee to Holders...................................................35
SECTION 7.07. Compensation and Indemnity......................................................35
SECTION 7.08. Replacement of Trustee..........................................................36
SECTION 7.09. Successor Trustee by Merger.....................................................36
SECTION 7.10. Eligibility; Disqualification...................................................37
SECTION 7.11. Preferential Collection of Claims Against Company...............................37
ARTICLE 8 Discharge of Indenture; Defeasance..............................................................................37
SECTION 8.01. Discharge of Liability on Notes; Defeasance.....................................37
SECTION 8.02. Conditions to Defeasance........................................................37
SECTION 8.03. Application of Trust Money......................................................38
SECTION 8.04. Repayment to Company............................................................38
SECTION 8.05. Indemnity for Government Obligations............................................38
SECTION 8.06. Reinstatement...................................................................38
ARTICLE 9 Amendments......................................................................................................39
SECTION 9.01. Without Consent of Holders......................................................39
SECTION 9.02. With Consent of Holders.........................................................39
SECTION 9.03. Compliance with Trust Indenture Act.............................................40
SECTION 9.04. Revocation and Effect of Consents and Waivers...................................40
SECTION 9.05. Notation on or Exchange of Notes................................................40
SECTION 9.06. Trustee to Sign Amendments......................................................40
SECTION 9.07. Payment for Consent.............................................................40
ARTICLE 10 Miscellaneous..................................................................................................41
SECTION 10.01. Trust Indenture Act Controls....................................................41
SECTION 10.02. Notices.........................................................................41
SECTION 10.03. Communication by Holders with Other Holders.....................................41
SECTION 10.04. Certificate and Opinion as to Conditions Precedent..............................41
SECTION 10.05. Statements Required in Certificate or Opinion...................................42
SECTION 10.06. When Notes Disregarded..........................................................42
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar....................................42
SECTION 10.08. Legal Holidays..................................................................42
SECTION 10.09. GOVERNING LAW...................................................................42
SECTION 10.10. No Personal Liability of Directors, Officers, Employees and Stockholders........42
SECTION 10.11. Successors......................................................................43
SECTION 10.12. Multiple Originals..............................................................43
SECTION 10.13. Table of Contents; Headings.....................................................43
Appendix A - Provisions Relating to the Notes
Exhibit A - Form of Note
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CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
----------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.08; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06
314(a) 4.02; 4.09
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01
(b) 7.05; 10.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a)(last sentence) 10.06
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
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INDENTURE dated as of __________, 2003, between MAGELLAN
HEALTH SERVICES, INC., a Delaware corporation (the "Company"), and
HSBC Bank USA, a New York banking corporation and trust company, as
trustee (the "Trustee").
RECITALS OF THE COMPANY
A. The Company and certain of its subsidiaries filed for
reorganization under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court"); and
B. By order, dated _____________, 2003, the Bankruptcy Court
has confirmed the Company's Second Amended Joint Plan of Reorganization (the
"Plan") in accordance with section 1129 of the Bankruptcy Code and such Plan has
become effective as of _________, 2003; and
C. As part of the Plan, the Company has agreed, inter alia, to issue
(i) $___ million principal amount of 9 3/8% Series A Senior Notes due 2008 (the
"Series A Notes") to holders of the Company's outstanding 9 3/8% Senior Notes
due 2007 (the "Old Notes") in exchange for all of the Company's outstanding Old
Notes and obligations thereunder and (ii) $___ million principal amount of 9
3/8% Series B Senior Notes due 2008 (the "Series B Notes"; collectively, with
the Series A Notes referred to as the "Notes") to the holders of Other General
Unsecured Claims (Class 9) under the Plan and to Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
Capital.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the issuance of the
Notes to the Holders (as defined herein) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Notes, as
follows:
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Aetna Note" means the $45 million (plus an additional amount equal
to the aggregate amount of accrued and unpaid interest on $60 million Aetna
Claim (as defined in the Plan) from February 15, 2003 through the Effective
Date) note due December 31, 2005 (subject to partial extension) received by
Aetna, Inc. for the Aetna Claim pursuant to the Plan.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling", "controlled by",
and "under common control with") another Person if the controlling Person (a)
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of voting securities, by agreement or otherwise, or (b) owns, directly or
indirectly, 10% or more of any class of the issued and outstanding equity
securities of the controlled Person.
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-and-leaseback and including the sale or other
transfer of any Equity Interests in any Restricted Subsidiary or the issuance of
any Equity Interests in any Restricted Subsidiary) which results in proceeds
with a fair market value of $1 million or more. However, the following shall not
constitute an Asset Sale: (i) unless part of a disposition including other
assets or operations, (A) dispositions of Cash, Cash Equivalents and Investment
Grade Securities, (B) payments on or in respect of non-Cash proceeds of Asset
Sales, and (C) dispositions of Investments by foreign subsidiaries of the
Company in Cash and instruments or securities or in certificates of deposit (or
comparable instruments) with banks or similar institutions; (ii) the lease of
space in the ordinary course of business and in a manner consistent with either
past practices or the healthcare industry generally; or (iii) the issuance or
sale by the Company of any Equity Interests in the Company.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended); provided, however, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined without duplication in accordance with the definition
of Capital Lease Obligation.
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment (assuming the
exercise by the obligor of such Indebtedness of all unconditional (other than as
to the giving of notice) extension options of each such scheduled payment date)
of such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such principal payment by (ii) the
sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
which would at such time be so required to be capitalized on the balance sheet
in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock (including,
without limitation, common and preferred stock), excluding warrants, options or
similar instruments or other rights to acquire Capital Stock.
"Cash" means money or currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency,
instrumentality or sponsored corporation thereof which are rated at least A or
the equivalent thereof by Standard and Poor's Ratings Services ("S&P") or at
least A-2 or the equivalent thereof by Xxxxx'x Investor Services, Inc.
("Moody's") (or if at such time neither is issuing ratings, then a comparable
rating of another nationally recognized rating agency), and in each case having
maturities of not more than one year from the date of acquisition, (ii) time
deposits, certificates of deposit, Eurodollar time deposits, and overnight bank
deposits with any commercial bank of recognized standing, having capital and
surplus in excess of $250 million and the commercial paper of the holding
company of which is rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody's (or if at such time neither is
issuing ratings, then a comparable rating of another nationally recognized
rating agency), or, if no such commercial paper rating is available, a long-term
debt rating of at least A or the equivalent thereof by S&P or at least A-2 or
the equivalent thereof by Moody's (or if at such time neither is issuing
ratings, then a comparable rating of another nationally recognized rating
agency), (iii) repurchase obligations with a term of not more than 92 days for
underlying securities of the types described in clause (i) above entered into
with any commercial bank meeting the qualifications specified in clause (ii)
above, (iv) other investment instruments offered or sponsored by financial
institutions having capital and surplus in excess of $250 million and the
commercial paper of the holding company of which is rated at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), or, if no such commercial paper
rating is available, a long-term debt rating of at least A or the equivalent
thereof by S&P or at least A-2 or the equivalent thereof by Moody's (or if at
such time neither is issuing ratings, then a comparable rating of another
nationally recognized rating agency), (v) readily marketable direct obligations
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issued by any state of the United States of America or any political subdivision
thereof having one of the two highest rating categories obtainable from either
Moody's or S&P (or if at such time neither is issuing ratings, then a comparable
rating of another nationally recognized rating agency), (vi) commercial paper
rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the
equivalent thereof by Moody's (or if at such time neither is issuing ratings,
then a comparable rating of another nationally recognized rating agency), in
each case maturing within one year after the date of acquisition and (vii) other
money market investments with a weighted average maturity of less than one year
in an aggregate amount not to exceed $10 million at any time outstanding.
"Change of Control" means (a) the sale, lease, transfer or other
disposition in one or more related transactions of all or substantially all of
the Company's assets, or the sale of substantially all of the Capital Stock or
assets of the Company's Subsidiaries that constitutes a sale of substantially
all of the Company's assets, to any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act), (b) the merger or consolidation of the
Company with or into another corporation, or the merger of another corporation
into the Company or any other transaction, with the effect, in any such case,
that the stockholders of the Company immediately prior to such transaction hold
50% or less of the total voting power entitled to vote in the election of
directors, managers or trustees of the surviving corporation or, in the case of
a triangular merger, the parent corporation of the surviving corporation
resulting from such merger, consolidation or such other transaction, (c) any
Person (except for the parent corporation of the surviving corporation in a
triangular merger) or group acquires beneficial ownership of a majority in
interest of the voting power or voting Capital Stock of the Company, or (d) the
liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Cash Interest Coverage Ratio" means the ratio of (i)
Consolidated Net Income plus the sum of Consolidated Interest Expense, income
tax expense, depreciation expense, amortization expense and other non-cash
charges of the Company and its Restricted Subsidiaries (to the extent such items
were deducted in computing Consolidated Net Income of the Company)
(collectively, "EBITDA") for the preceding four fiscal quarters to (ii) the
Consolidated Cash Interest Expense of the Company and its Restricted
Subsidiaries for the preceding four fiscal quarters; provided that (without
duplication): (A) if the Company or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays or redeems any Indebtedness subsequent to the
commencement of the period for which the Consolidated Cash Interest Coverage
Ratio is being calculated but prior to the event for which the calculation of
the Consolidated Cash Interest Coverage Ratio is made or if the transaction
giving rise to the need to calculate the Consolidated Cash Interest Coverage
Ratio is an incurrence, assumption, Guarantee, repayment or redemption of
Indebtedness, then the Consolidated Cash Interest Coverage Ratio will be
calculated giving pro forma effect to any such incurrence, assumption,
Guarantee, repayment or redemption of Indebtedness, as if the same had occurred
at the beginning of the applicable period, (B) if the Company or any Restricted
Subsidiary shall have made any Material Asset Sale subsequent to the
commencement of the period for which the Consolidated Cash Interest Coverage
Ratio is being calculated but prior to the event for which the calculation of
the Consolidated Cash Interest Coverage Ratio is made, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets that are the subject of such Material Asset Sale for
such period or increased by an amount equal to the EBITDA (if negative) directly
attributable thereto for such period, and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated Interest Expense
for such period directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Material Asset Sale (or, if the Equity Interests of any Restricted
Subsidiary are sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (C) if the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
Investment or acquisition of assets constitutes all or substantially all of an
operating unit of a business subsequent to the commencement of the period for
which the Consolidated Cash Interest Coverage Ratio is being calculated but
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prior to the event for which the calculation of the Consolidated Cash Interest
Coverage Ratio is made, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including the
incurrence, assumption, Guarantee, repayment or redemption of any Indebtedness
and any pro forma expense and cost reductions that are directly attributable to
such transaction), as if such Investment or acquisition occurred at the
beginning of the applicable period and (D) if subsequent to the commencement of
the period for which the Consolidated Cash Interest Coverage Ratio is being
calculated but prior to the event for which the calculation of the Consolidated
Cash Interest Coverage Ratio is made any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Material
Asset Sale or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (B) or (C) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Material Asset Sale, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is given for a transaction, the pro forma calculation
shall be made in good faith by a responsible financial or accounting officer of
the Company. In making such calculations on a pro forma basis, interest
attributable to Indebtedness bearing a floating interest rate shall be computed
as if the rate in effect on the date of computation had been the applicable rate
for the entire period.
"Consolidated Cash Interest Expense" of any Person means, for any
period for which the determination thereof is to be made, the Consolidated
Interest Expense of such Person less, to the extent incurred, assumed or
Guaranteed by such Person and its Subsidiaries in such period and included in
such Consolidated Interest Expense, (i) deferred financing costs and (ii) other
noncash interest expense; provided, however, that amortization of original issue
discount shall be included in Consolidated Cash Interest Expense.
"Consolidated Interest Expense" of any Person means, for any period
for which the determination thereof is to be made, the total interest expense of
such Person and its consolidated Restricted Subsidiaries, plus, without
duplication, to the extent incurred, assumed or Guaranteed by such Person and
its Subsidiaries in such period but not included in such interest expense,
(A)(i) all commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing, (ii) all but the
principal component of rentals in respect of Capital Lease Obligations, paid,
accrued or scheduled to be paid or accrued by such Person during such period,
(iii) capitalized interest, (iv) amortization of original issue discount and
deferred financing costs, (v) noncash interest expense, (vi) interest accruing
on any Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by such Person or any of its Restricted Subsidiaries; provided that
payment of such amounts by the Company or any Restricted Subsidiary is being
made to, or is sought by, the holders of such Indebtedness pursuant to such
guarantee, (vii) net costs (benefits) associated with Hedging Obligations
relating to interest rate protection (including amortization of fees), (viii)
Preferred Stock dividends in respect of all Preferred Stock of the Subsidiaries
of such Person and Redeemable Stock of such Person held by Persons other than
such Person or a Wholly-owned Subsidiary of such Person, and (ix) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than such Person) in connection with Indebtedness incurred,
assumed or Guaranteed by such plan or trust, all as determined in accordance
with GAAP, less (B) interest expense of the type described in clause (A) above
attributable to Unrestricted Subsidiaries of such Person to the extent the
related Indebtedness is not Guaranteed or paid by such Person or any Restricted
Subsidiary of such Person.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP, plus
the sum of the amount allocated to excess reorganization value, employee stock
ownership plan expense and consolidated stock option expense (to the extent such
items were taken into account in computing the Net Income of such Person and its
Subsidiaries); provided, however, that:
(i) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or distributions actually paid in Cash to the referent
Person or its Restricted Subsidiaries;
(ii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
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(iii) the cumulative effect of a change in accounting
principles shall be excluded; and
(iv) any net income (loss) of any Restricted Subsidiary of
such Person if such Restricted Subsidiary of such Person is subject
to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted Subsidiary,
directly or indirectly, to such Person that violate Section 4.05
(without giving effect to clause (6) thereof with respect to any
Indebtedness) shall be excluded, except that (A) such Person's equity
in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of Cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend or otherwise (subject, in the case of a
dividend or distribution that could have been made to another
Restricted Subsidiary, to the limitation contained in this clause)
and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income.
Notwithstanding the foregoing, for the purposes of Section 4.04 only,
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances or other transfers of assets or other amounts from or in
respect of Unrestricted Subsidiaries to such Person or a Restricted Subsidiary
of such Person to the extent such dividends, repayments or transfers or other
amounts increase the amount of Restricted Payments permitted pursuant to Section
4.04(a)(2)(F).
"Credit Agreement" means (a) the New Facilities or the Exit Financing
providing for up to $95,000,000.00 in revolving credit loans and letter of
credit obligations and up to $91,245,237 of term loans, and (b) each note,
guaranty, mortgage, pledge agreement, security agreement, indemnity, subrogation
and contribution agreement, and other instruments and documents from time to
time entered into pursuant to or in respect of the New Facilities or the Exit
Financing, as each such note, guaranty, mortgage, pledge agreement, security
agreement, indemnity, subrogation and contribution agreement and other
instruments and documents may be amended, restated or supplemented, from time to
time, in whole or in part.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Deposit Account" means a demand, savings, passbook, money market or
like account with or sponsored by a commercial bank, financial institution,
investment bank or brokerage firm, savings and loan association or like
organization or a government securities dealer, other than an account evidenced
by a negotiable certificate of deposit.
"Disinterested Director" means, with respect to any specific
transaction, any director of the Company that does not have a direct or indirect
interest (other than any interest resulting solely from such director's
ownership of Equity Interests in the Company) in such transaction.
"Domestic Subsidiary" means a Restricted Subsidiary of the Company
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.
"Effective Date" means the Effective Date as defined in the Plan.
"Equity Interests" means (a) Capital Stock, warrants, options or
similar instruments or other rights to acquire Capital Stock (but excluding any
debt security which is convertible into, or exchangeable for, Capital Stock),
and (b) limited and general partnership interests, interests in limited
liability companies, joint venture interests and other ownership interests in
any Person.
"Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act or a private primary offering of common stock of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
5
"Exit Financing" means Exit Financing as defined in the Plan.
"Foreign Subsidiary" means a Restricted Subsidiary of the Company
that is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, as in effect on the Effective Date.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and 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 arrangements to keep-well, to purchase assets,
goods, securities or services, 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, however, 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.
"Healthcare Service Business" means a business, the majority of whose
revenues are derived from providing or arranging to provide or administering,
managing or monitoring healthcare services or any business or activity that is
reasonably similar thereto or a reasonable extension, development or expansion
thereof or ancillary thereto.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange or interest rates.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means to create, issue, assume, guarantee, incur or otherwise
become directly or indirectly liable with respect to any Indebtedness. The term
"Incurrence" when used as a noun shall have a correlative meaning.
"Indebtedness" of any Person means, without duplication at the date
of determination thereof:
(i) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money (including in respect
of obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments) or for the deferred purchase price of
property or services (other than (a) trade payables on terms of 365
days or less incurred in the ordinary course of business and (b)
deferred earn-out and other performance-based payment obligations
incurred in connection with acquisitions of Healthcare Service
Businesses), all as determined in accordance with GAAP;
(ii) all Capital Lease Obligations and Attributable Debt of
such Person;
(iii) all Guarantees of such Person in respect of
Indebtedness of others;
(iv) the aggregate amount of all unreimbursed drawings in
respect of letters of credit or other similar instruments issued for
the account of such Person (less the amount of Cash, Cash Equivalents
or Investment Grade Securities on deposit securing reimbursement
obligations in respect of such letters of credit or similar
instruments);
(v) all indebtedness, obligations or other liabilities of
such Person or of others for borrowed money secured by a Lien on any
property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person;
6
(vi) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Redeemable Stock and, with respect to any Subsidiary of the Company,
any Preferred Stock (but excluding, in each case, any accrued
dividends); and
(vii) to the extent not otherwise included in this
definition actual (rather than notional) liabilities under Hedging
Obligations of such Person;
provided, however, that all or any portion of Indebtedness that becomes the
subject of a defeasance (whether a "legal" defeasance or a "covenant" or "in
substance" defeasance) shall, at all times that such defeasance remains in
effect, cease to be treated as Indebtedness for purposes of this Indenture.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Insurance Subsidiary" means, with respect to the Company, (a) so
long as they are Restricted Subsidiaries of the Company, Golden Isle Assurance
Company and Plymouth Insurance Company, Ltd., each a corporation organized under
the laws of Bermuda, and their respective successors and assigns, and (b) any
other Restricted Subsidiaries of the Company that are authorized or admitted to
carry on or transact one or more aspects of the business of selling, issuing or
underwriting insurance in any jurisdiction and are regulated by the insurance
departments or similar regulatory authorities of such jurisdiction or of the
jurisdictions where they are domiciled or primarily doing business.
"Investment" means, when used with respect to any Person, any direct
or indirect advance, loan or other extension of credit (other than the creation
of receivables in the ordinary course of business) or capital contribution by
such Person (by means of transfers of cash or property (other than Equity
Interests in the Company) to others or payments for property or services for the
account or use of others, or otherwise) to any other Person, or any direct or
indirect purchase or other acquisition by such Person of a beneficial interest
in capital stock, bonds, notes, debentures or other securities issued by any
other Person, or any Guarantee by such Person of the Indebtedness of any other
Person (in which case such Guarantee shall be deemed an Investment in such other
Person in an amount equal to the aggregate amount of Indebtedness so
guaranteed). For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in the case of property with a fair market value of up to $15 million,
as determined in good faith by a responsible financial officer of the Company,
and in the case of property with a fair market value in excess of $15 million,
as determined in good faith by the Board of Directors.
"Investment Grade Securities" means: (i) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (other than Cash Equivalents), (ii) debt
securities or debt instruments with a rating of BBB- or higher by S&P, Baa3 or
higher by Xxxxx'x or Class (2) or higher by NAIC or the equivalent of such
rating by such rating organization, or, if no rating of S&P, Xxxxx'x or NAIC
then exists, the equivalent of such rating by any other nationally recognized
securities rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Company and its Subsidiaries, and (iii)
investments in any fund that invests exclusively in investments of the type
described in clauses (i) and (ii) which fund may also hold immaterial amounts of
Cash or Cash Equivalents pending investment and/or distribution.
"Lien" means any mortgage, pledge, security interest, charge,
hypothecation, collateral assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), or security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement, other than
notice or precautionary filings not perfecting a security interest, under the
Uniform Commercial Code or comparable law of any jurisdiction, domestic or
foreign, in respect of any of the foregoing).
7
"Material Asset Sale" means any Asset Sale exceeding $25 million of
all or substantially all of an operating unit of a business.
"NAIC" means National Association of Insurance Commissioners.
"Net Cash Proceeds" means, 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 the interest, component thereof) when received in the
form of Cash or Cash Equivalents (except to the extent such obligations are
financed or sold with recourse to the Company or any Restricted Subsidiary of
the Company), casualty loss insurance proceeds, condemnation awards 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
related to such Asset Sale, (ii) provision for all taxes as a result of such
Asset Sale without regard to the consolidated results of operations of the
Company and its 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, (A) in the case of a sale of all of the Equity Interests in any
Restricted Subsidiary, is a direct obligation of such Restricted Subsidiary or
(B) is secured by the asset subject to such sale or was incurred to finance the
acquisition or construction of, improvements on, or operations related to, the
assets subject to such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary of the Company as a reserve against any
liabilities associated with such Asset Sale (such reserves, however, to be
counted as Net Cash Proceeds once released from reserve), including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, any gain
or loss, together with any related provision for taxes on such gain or loss,
realized in connection with any Asset Sale (including, without limitation,
dispositions pursuant to Sale/Leaseback Transactions) not in the ordinary course
of business, and excluding any extraordinary, unusual, non-recurring or similar
type of gain or loss, together with any related provision for taxes.
"New Facilities" means the New Facilities as defined in the Plan.
"New Management Incentive Program" means a stock option plan for
certain of the Company's employees which provides for options to acquire shares
of common stock representing up to 10% of the common stock of the Company on the
terms and conditions established by the compensation committee of the Board of
Directors and as allowed by the Plan.
"Non-Recourse Indebtedness" shall mean any Indebtedness of the
Company or any of its Restricted Subsidiaries if the holder of such Indebtedness
has no recourse, direct or indirect, absolute or contingent, to the general
assets of the Company or any of its Restricted Subsidiaries.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Permitted Asset Swap" means any one or more transactions in which
the Company or any of its Restricted Subsidiaries exchanges assets for
consideration consisting of Equity Interests in or assets of a Person engaged in
a Healthcare Service Business, or assets of a Person the Company or any of its
Restricted Subsidiaries intends to use in a Healthcare Service Business, and, to
the extent necessary to equalize the value of the assets being exchanged, cash;
provided that cash does not exceed 30% of the sum of the amount of the cash and
the fair market value of the Equity Interests or assets received or given by the
Company and its Restricted Subsidiaries in such transaction.
8
"Permitted Investments" means (a) any Investment in the Company, any
Restricted Subsidiary or any Permitted Joint Venture of the Company or of a
Restricted Subsidiary that in each case is a Healthcare Service Business; (b)
any Investment in Cash and Cash Equivalents or Investment Grade Securities; (c)
any Investment by the Company or any Restricted Subsidiary of the Company in a
Person that is engaged in the Healthcare Service Business if as a result of such
Investment (i) such Person becomes a Restricted Subsidiary or a Permitted Joint
Venture of the Company or of a Restricted Subsidiary or (ii) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary or a
Permitted Joint Venture of the Company or of a Restricted Subsidiary; (d) any
Investment in securities or other assets not constituting Cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to
Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(e) any Investment existing on the Effective Date; (f) any transaction to the
extent it constitutes an Investment that is permitted by and made in accordance
with Section 4.07(b)(ii); (g) any Investment in Healthcare Service Businesses
having an aggregate fair market value, taken together with all other Investments
made pursuant to this clause (g) that are at that time outstanding, not to
exceed 5% of Total Assets of the Company at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); (h) any Investment by
Restricted Subsidiaries in other Restricted Subsidiaries and Investments by
Subsidiaries of the Company that are not Restricted Subsidiaries in Subsidiaries
of the Company that are not Restricted Subsidiaries; (i) advances to employees
in the ordinary course of business not in excess of $2 million outstanding at
any one time; (j) any Investment acquired by the Company or any of its
Restricted Subsidiaries (i) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable or (ii) as a
result of a foreclosure by the Company or any of its Restricted Subsidiaries
with respect to any secured Investment or other transfer of title with respect
to any secured Investment in default; (k) Hedging Obligations; (l) Investments
the payment for which consists exclusively of Equity Interests (other than
Redeemable Stock) of the Company; (m) Investments made in connection with
Permitted Asset Swaps; and (n) additional Investments having an aggregate fair
market value, taken together with all other Investments made pursuant to this
clause (n) that are at that time outstanding, not to exceed $15 million at the
time of such Investment (with fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value).
"Permitted Joint Venture" means, with respect to any Person: (i) any
corporation, association, limited liability company or other business entity
(other than a partnership) (A) of which 50% or more of the total voting power of
shares of Capital Stock or other Equity Interests entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time of determination owned or
controlled, directly or indirectly, by such Person or one or more of the
Restricted Subsidiaries of that Person or a combination thereof and (B) which is
either managed or controlled by such Person or any of its Restricted
Subsidiaries and (ii) any partnership of which (x) 50% or more of the general or
limited partnership interests are owned or controlled, directly or indirectly,
by such Person or one or more of the Restricted Subsidiaries of that Person or a
combination thereof and (y) which is either managed or controlled by such Person
or any of its Restricted Subsidiaries, and which in the case of each of clauses
(i) and (ii) is engaged in a Healthcare Service Business.
"Permitted Liens" means, with respect to the Company or any
Restricted Subsidiary: (i) Liens on property or assets of the Company and its
Restricted Subsidiaries existing on the Effective Date (excluding Liens
permitted by clause (ii) hereof); (ii) any Lien created pursuant to any loan
document under the Credit Agreement and Liens to secure the Aetna Note and any
other Indebtedness permitted pursuant to clauses (i) and (xi) of Section 4.03(b)
(to the extent incurred under the Credit Agreement), and with respect to both
such clauses (i) and (xi) of Section 4.03(b) replacements, refinancings,
refundings, and substitute facility or facilities thereof, in whole or in part,
and additional facility or facilities) to the extent permitted by such clause
(i) or (iv) of Section 4.03(b), as applicable; (iii) any Lien existing on any
property or asset prior to the acquisition thereof by the Company or any of its
Subsidiaries (including any acquisition by means of a merger or consolidation
with or into the Company or any of its Subsidiaries), provided that (A) such
Lien is not created in contemplation of or in connection with such acquisition
and (B) such Lien does not apply or extend to any other property or assets of
the Company or any of its Subsidiaries (other than assets and property affixed
or appurtenant thereto); (iv) Liens for taxes not yet due or which are being
contested in good faith or Liens for unpaid local or state taxes that are not in
the aggregate material; (v) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
9
business and securing obligations that are not in the aggregate material; (vi)
pledges and deposits made in the ordinary course of business in compliance with
workmen's compensation, unemployment insurance or other social security laws or
regulations; (vii) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (viii) zoning restrictions, easements,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of the Company and its Restricted Subsidiaries taken as a whole;
(ix) purchase money security interests in real property, improvements thereto or
equipment hereafter acquired (or, in the case of improvements, constructed) by
the Company or any of its Restricted Subsidiaries, provided that (A) such
security interests secure Indebtedness permitted by Section 4.03, (B) such
security interests and the Indebtedness secured thereby is created within 270
days after such acquisition (or construction), (C) the Indebtedness secured
thereby does not exceed the fair market value of such real property,
improvements or equipment at the time of such acquisition (or construction) and
(D) such security interests do not apply to any other property or assets of the
Company or any of its Subsidiaries; (x) Liens securing Indebtedness or other
obligations of a Subsidiary of the Company owing to the Company or a Subsidiary
of the Company; (xi) any Lien incurred in connection with any Indebtedness
permitted to be incurred pursuant to Section 4.03(b)(vii); (xii) Liens to secure
any Refinancing (or successive Refinancings) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (i),
(iii), (ix) and (xi); provided, however, that: (A) such new Lien shall be
limited to all or part of the same property that secured the prior Lien (plus
improvements or additions to or on such property) at the time of such
Refinancing and (B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of: (x) the outstanding principal
amount or, if greater, committed amount of the Indebtedness secured by Liens
described under clauses (i), (iii), (ix) or (xi) at the time the prior Lien
became a Permitted Lien under this Indenture and (y) an amount necessary to pay
any fees and expenses, including premiums, related to such Refinancings; (xiii)
bankers' liens and Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business consistent with past practices
in connection with title insurance, purchase agreements, judgment liens (if
released, bonded or stayed within 60 days) and leases and subleases; (xiv)
prejudgment liens in respect of property of a Foreign Subsidiary of the Company
that are incurred in connection with a claim or action against such Foreign
Subsidiary before a court or tribunal outside of the United States, provided
that such liens do not, individually or in the aggregate, have a material
adverse effect on the business, assets, operations, prospects or condition,
financial or otherwise, of the Company and its Restricted Subsidiaries taken as
a whole; (xv) Liens on the assets of the Insurance Subsidiaries securing self
insurance and reinsurance obligations and letters of credit or bonds issued in
support of such self insurance and reinsurance obligations, provided that the
assets subject to such Liens shall only be assets of the Insurance Subsidiaries;
(xvi) Liens securing Hedging Obligations so long as such Hedging Obligations
relate to Indebtedness that is, and is permitted under the Indenture to be,
secured; (xvii) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of the Company or any of
its Restricted Subsidiaries in the ordinary course of its business; (xviii)
Liens not otherwise permitted by the foregoing clauses (i) through (xvii)
securing any Indebtedness or other obligations, provided that the aggregate
principal amount of such Indebtedness and other obligations secured by Liens
permitted by this clause (xviii) shall not exceed $30 million at any time
outstanding.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company,
limited liability company, trust, unincorporated organization or government or
other agency or political subdivision thereof or other entity of any kind.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note that is due or overdue at the relevant
time.
"Prior Purchase Money Obligations" means purchase money obligations
relating to property acquired by the Company or any of its Restricted
Subsidiaries in the ordinary course of business that existed prior to the
10
acquisition of such property by the Company or any of its Restricted
Subsidiaries and that impose restrictions of the nature described in Section
4.05 on the property so acquired.
"Redeemable Stock" means any Equity Interest which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), or upon the happening of any event: (i) matures or
is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is convertible or exchangeable for Indebtedness or Redeemable Stock or
(iii) is redeemable at the option of the holder thereof, in whole or in part, in
each case on or prior to four months after the stated maturity of the Notes.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, replace, substitute, repay, prepay, redeem, defease or
retire, or to issue other Indebtedness in exchange or replacement for, in whole
or in part, such Indebtedness. "Refinanced" and "Refinancing" shall have
correlative meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement as defined in the Plan.
"Restricted Subsidiary" means each of the Subsidiaries of the Company
that has not been designated an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person, other than leases between the Company and
a Wholly-owned Subsidiary or between Wholly-owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (such interest on Senior Indebtedness, wherever referred to in this
Indenture, is deemed to include interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law in accordance with and
at the rate (including any rate applicable upon any default or event of default,
to the extent lawful) specified in any document evidencing the Senior
Indebtedness, whether or not the claim for such interest is allowed as a claim
after such filing in any proceeding under such bankruptcy law) and other amounts
(including, but not limited to, fees, expenses, reimbursement obligations in
respect of letters of credit and indemnities) due or payable from time to time
on or in connection with any Indebtedness of the Company unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be junior in right of payment to the Notes.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (a) any Indebtedness or obligation that is contractually
subordinated in right of payment to any other Indebtedness or obligation of the
Company, (b) any obligations with respect to any Capital Stock, (c) any
Indebtedness Incurred in violation of this Indenture, except where at the time
of such Incurrence, a responsible financial officer of the Company has delivered
a certification as to its compliance at such time with Section 4.03(a), and the
holder of such Indebtedness or its trustee, agent or representative is not aware
of facts or circumstances such that such Person could not rely in good faith on
such certification, (d) any obligation of the Company to any Subsidiary, (e) any
liability for Federal, state, local or other taxes owed or owing by the Company
or (f) any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities).
"Stated Maturity" means, with respect to any Indebtedness, the date
or dates specified in such Indebtedness as the fixed date or dates on which the
payment of principal of such Indebtedness is due and payable, including pursuant
to any mandatory redemption provision, it being understood that if an issue of
Indebtedness has more than one fixed date on which the payment of principal is
due and payable, each such fixed date shall be a separate Stated Maturity with
respect to the principal amount of Indebtedness due on such date.
11
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Effective Date or thereafter incurred, assumed or
Guaranteed) that is subordinate or junior in right of payment to the Notes
pursuant to a written agreement.
"Subsidiary" means with respect to any Person, (i) any corporation,
association, limited liability company or other business entity (other than a
partnership) of which more than 50% of the total voting power of the Equity
Interests entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination thereof, (ii)
any partnership of which more than 50% of the general or limited partnership
interests are owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination thereof and
(iii) any Permitted Joint Venture of such Person.
"Subsidiary Guarantee" means any Guarantee of the Notes made by a
Restricted Subsidiary pursuant to Section 4.14.
"Subsidiary Guarantor" means a Restricted Subsidiary that executes
and delivers a Subsidiary Guarantee.
"Total Assets" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as shown on
the most recent balance sheet of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 X.X.X.xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means: (i) any Subsidiary of the Company
which at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary of the Company (including any Subsidiary and any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Equity Interests or Indebtedness (other than any
Indebtedness incurred in connection with services performed in the ordinary
course of business by such Subsidiary for the Company or any of its Restricted
Subsidiaries) of, or owns, or holds any Lien on, any property of, the Company or
any Restricted Subsidiary of the Company, provided that (a) any Unrestricted
Subsidiary must be an entity of which shares of the Capital Stock or other
Equity Interests (including partnership interests) entitled to cast at least a
majority of the votes that may be cast by all shares or Equity Interests having
ordinary voting power for the election of directors or other governing body are
owned, directly or indirectly, by the Company, (b) such designation complies
with Section 4.04 and (c) each of (I) the Subsidiary to be designated and (II)
its Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness pursuant to Section 4.03(a) and (y) no Default shall have occurred
and be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
12
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" means, with respect to any Person, any class or series
of Capital Stock of such Person that is ordinarily entitled to vote in the
election of directors thereof at a meeting of stockholders called for such
purpose, without the occurrence of any additional event or contingency.
"Wholly-owned Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which 95% or more of the outstanding Equity
Interests of such Restricted Subsidiary are owned by such Person (either
directly or indirectly through Wholly-owned Subsidiaries).
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
---- ------------------
"Acceleration Notice" 6.02
"Affiliate Transaction" 4.07(a)
"Bankruptcy Law" 6.01
"Blockage Notice" 10.03
"Change of Control Offer" 4.08(a)
"Change of Control Payment Date" 4.08(b)
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Event of Default" 6.01
"Excess Proceeds" 4.06(a)
"Excess Proceeds Offer" 4.06(a)
"Excess Proceeds Offer Payment Date" 4.06(b)
"Excess Proceeds Purchase Price" 4.06(a)
"Guaranteed Indebtedness" 4.14
"legal defeasance option" 8.01(b)
"Legal Holiday" 10.08
"Paying Agent" 2.03
"protected purchaser" 2.07
"Refinancing Indebtedness" 4.03(b)
"Registrar" 2.03
"Restricted Payments" 4.04(a)
"Successor Company" 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder or Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
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All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater.
ARTICLE 2
The Notes
SECTION 2.01. Form and Dating. Provisions relating to the Notes are
set forth in the Appendix, which is hereby incorporated in and expressly made a
part of this Indenture. The Notes and the Trustee's certificate of
authentication shall each be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement shall be in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication.
SECTION 2.02. Execution and Authentication. One or more Officers
shall sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery Notes
as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to the Company. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
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reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.03. 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") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent, and the term "Registrar" includes
any co-registrars. The Company initially appoints the Trustee as (i) Registrar
and Paying Agent in connection with the Notes, and (ii) the Securities Custodian
(as defined in the Appendix) with respect to the Global Notes (as defined in the
Appendix).
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate
the terms of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of the
name and address of any such agent. If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any
of its domestically organized Wholly-owned Subsidiaries may act as Paying Agent
or Registrar.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
that no such removal shall become effective until (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) above. The Registrar or Paying Agent may resign at
any time upon written notice; provided, however, that the Trustee may resign as
Paying Agent or Registrar only if the Trustee also resigns as Trustee in
accordance with Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to 11:00
a.m. on each due date of the principal of, premium, if any, and interest on any
Note, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Noteholders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, or interest on the Notes
and shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary of the Company acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in
writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Noteholders.
SECTION 2.06. Transfer and Exchange. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer. When a Note is presented to the Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(a)(l) of the Uniform Commercial
Code are met. When Notes are presented to the Registrar with a request to
exchange them for an equal aggregate principal amount of Notes of the same
series of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Notes at the Registrar's request. Upon any transfer or exchange, the Xxxxxxxxx
00
and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes required by law or
permitted by this Indenture.
The Company shall not be required to make and the Registrar need not
register transfers or exchanges of Notes selected for redemption (except, in the
case of Notes to be redeemed in part, the portion thereof not to be redeemed) or
any Notes for a period of 15 days before a selection of Notes to be redeemed.
Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent or the Registrar may deem and
treat the Person in whose name a Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and none of the Company, the Trustee, the Paying Agent or the
Registrar shall be affected by notice to the contrary.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interest in such Global Note may be effected
only through a book-entry system maintained by (i) the Holder of such Global
Note (or its agent) or (ii) any Holder of a beneficial interest in such Global
Note, and that ownership of a beneficial interest in such Global Note shall be
required to be reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. Replacement Notes. If a mutilated Note is surrendered
to the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note of the same series if the Holder (i) notifies
the Company or the Trustee within a reasonable time after he has notice of such
loss, destruction or wrongful taking and the Registrar has not registered a
transfer prior to receiving such notification, (ii) makes such request to the
Company or the Trustee prior to the Note being acquired by a protected purchaser
as defined in Section 8-303 of the Uniform Commercial Code (a "protected
purchaser") and (iii) satisfies any other reasonable requirements of the Trustee
and the Company including, without limitation, the requirements of Section 8-405
of the Uniform Commercial Code. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the reasonable judgment of
the Trustee and the Company to protect the Company, the Trustee, the Paying
Agent and the Registrar from any loss that any of them may suffer if a Note is
replaced. The Company and the Trustee may charge the Holder for their expenses
in replacing a Note. In the event any such mutilated, lost, destroyed or
wrongfully taken Note has become or is about to become due and payable, 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.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.08. Outstanding Notes. Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal, premium, if any, and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, and the Paying Agent is not prohibited from paying such money to the
Noteholders on that date pursuant to the terms of this Indenture, then on and
after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
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SECTION 2.09. Temporary Notes. In the event that Definitive Notes (as
defined in the Appendix) are to be issued under the terms of this Indenture,
until such Definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate Definitive Notes
and deliver them in exchange for temporary Notes upon surrender of such
temporary Notes at the office or agency of the Company, without charge to the
Holder.
SECTION 2.10. Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. 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 and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of canceled Notes in accordance with its
customary procedures or deliver canceled Notes to the Company pursuant to
written direction by an Officer. The Company may not issue new Notes to replace
Notes it has redeemed, paid or delivered to the Trustee for cancellation. The
Trustee shall not authenticate Notes in place of canceled Notes other than
pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the Persons who are
Noteholders on a subsequent special record date. The Company shall fix or cause
to be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Noteholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee in
writing of the redemption date, the principal amount of Notes to be redeemed and
the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 35 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the Notes
are to be redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record date shall be not
fewer than 15 days after the date of notice to the Trustee. Any such notice may
be canceled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Notes To Be Redeemed. If less than all of
the Notes are to be redeemed at any time, selection of the Notes for redemption
shall be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange, on a pro rata
basis. The Trustee shall make the selection from outstanding Notes not
previously called for redemption. The Trustee may select for redemption portions
of the principal of Notes that have denominations larger than $1,000. Notes and
portions of them the Trustee selects shall be in amounts of $1,000 or a whole
multiple of $1,000. 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 promptly of the Notes or portions of Notes to be
redeemed.
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SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Notes, the Company shall mail a
notice of redemption by first-class mail to each Holder of Notes to be redeemed
at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the
particular Notes to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes pursuant to which the Notes
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Notes being
redeemed; and
(9) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued interest and premium, if any, to the redemption date;
provided, however, that if the redemption date is after a regular record date
and on or prior to the interest payment date, the accrued interest and premium,
if any, shall be payable to the Noteholder of the redeemed Notes registered on
the relevant record date. Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
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 of Notes called
for redemption that have been delivered by the Company to the Trustee for
cancellation. On and after the redemption date, interest shall cease to accrue
on Notes or portions thereof called for redemption so long as the Company has
deposited with the Paying Agent funds sufficient to pay the principal of, and
premium, if any, plus accrued and unpaid interest on the Notes to be redeemed.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
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ARTICLE 4
Covenants
SECTION 4.01. Payment of Notes(b) . The Company shall promptly pay
the principal of and premium (if any) and interest and on the Notes on the dates
and in the manner provided in the Notes and in this Indenture. Principal,
premium (if any) and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal, premium (if any) and interest
then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Noteholders on that date pursuant to
the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. With respect to
the Notes the term interest shall be deemed to include liquidated damages, if
any, payable under the Registration Rights Agreement.
SECTION 4.02. Provisions of Reports and Other Information. At all
times while any Note is outstanding, the Company shall timely file with the SEC
and provide a copy to the Trustee and to each Noteholder, and, upon request, any
beneficial owner of Notes without cost, all such reports and other information
as required by Section 13 or 15(d) of the Exchange Act, including, without
limitation, Forms 10-K, 10-Q and 8-K. Upon request without cost, the Company
shall also provide Noteholders and beneficial owners of Notes copies of all
Officers' Certificates delivered to the Trustee under this Indenture. At such
time as the Company is not subject to the reporting requirements of the Exchange
Act, promptly after the same would be required to be filed with the SEC if the
Company then were subject to Section 13 or 15(d) of the Exchange Act, the
Company shall file with the Trustee and supply to each Holder and, upon request,
to any beneficial owner of Notes and any prospective purchaser of Notes, without
cost, copies of its financial statements and certain other reports or
information comparable to that which the Company would have been required to
report pursuant to Sections 13 and 15(d) of the Exchange Act, including, without
limitation, the information that would be required by Forms 10-K, 10-Q and 8-K.
The Company also shall comply with the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Additional Indebtedness(a) . (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to create or Incur any Indebtedness; provided, however,
the Company may Incur Indebtedness if, after giving pro forma effect to the
Incurrence of such Indebtedness and the application of any of the proceeds
therefrom to repay Indebtedness, the Consolidated Cash Interest Coverage Ratio
of the Company for the four most recent consecutive fiscal quarters for which
financial statements are available prior to the date such additional
Indebtedness is Incurred shall be at least 2.5 to 1.00. Any Indebtedness or
Capital Stock of a Person existing at the time such Person becomes a Subsidiary
of the Company (whether by merger, consolidation, acquisition or otherwise)
shall be deemed to be Incurred by such Person at the time it becomes a
Subsidiary of the Company.
(b) Notwithstanding Section 4.03(a), the Company and its Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness (including Guarantees) under the Credit
Agreement and any replacements, refundings, refinancings with banks
or other financial institutions and substitute facility or facilities
thereof with banks or other financial institutions, in whole or in
part, and additional letters of credit only facility or facilities
and any replacement with banks or other financial institutions of the
revolving credit facilities only in an aggregate principal amount not
to exceed $186,245,237 provided (i) such Indebtedness consisting of
revolving credit loans and letters of credit or other similar
instruments outstanding (with letters of credit deemed to have a
principal amount equal to the maximum potential liability of the
Company and its Subsidiaries thereunder) shall not at any time exceed
$95,000,000 million in aggregate outstanding principal amount and
(ii) such Indebtedness consisting of term loans shall not at any time
exceed the amount of term loans outstanding under the Credit
Agreement on the Effective Date less the aggregate amount of all
repayments of term loans under the Credit Agreement that have been
made by or on behalf of the Company or any of its Subsidiaries on or
after the Effective Date, exclusive of refinancings and refundings.
In no event shall any Indebtedness incurred under this clause (i) be
in the form of, or refunded, refinanced, substituted or replaced,
19
whether directly or indirectly through the use of a special purpose
entity or otherwise, with, any Indebtedness that is issued pursuant
to Rule 144A or Regulation S of the Securities Act or is registered
or is anticipated to be registered with the SEC;
(ii) Indebtedness of the Company and its Restricted
Subsidiaries, which Indebtedness was in existence on the Effective
Date (excluding Indebtedness permitted by clause (i) above or clause
(iii) below);
(iii) Indebtedness represented by the Aetna Note and the
Notes;
(iv) Indebtedness of the Company and its Restricted
Subsidiaries Incurred in exchange for, or the proceeds of which are
used to Refinance, in whole or in part, Indebtedness (subject to the
following proviso, "Refinancing Indebtedness") permitted by clauses
(ii) and (iii) of this Section 4.03(b); provided, however, that: (A)
the principal amount of such Refinancing Indebtedness shall not
exceed the principal amount of Indebtedness (including unused
commitments) so Refinanced (plus costs of issuance), (B) such
Refinancing Indebtedness ranks, relative to the Notes, no more senior
than the Indebtedness being Refinanced thereby, (C) such Refinancing
Indebtedness bears interest at a market rate, (D) such Refinancing
Indebtedness: (1) shall have an Average Life equal to or greater than
the Average Life of the Indebtedness being Refinanced and (2) shall
not have a Stated Maturity prior to the Stated Maturity of the
Indebtedness being Refinanced, (E) such Refinancing Indebtedness
shall not include: (x) Indebtedness of a Restricted Subsidiary (other
than Refinancing Indebtedness the proceeds of which are used to
Refinance Indebtedness that was Guaranteed by such Restricted
Subsidiary) that refinances Indebtedness of the Company or (y)
Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary;
(v) Indebtedness of the Company or any Restricted
Subsidiary to any Restricted Subsidiary or to the Company; provided,
however, that, any subsequent issuance or transfer of any Capital
Stock or any other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a
Restricted Subsidiary) shall be deemed, in each case, to constitute
the Incurrence of such Indebtedness by the issuer thereof;
(vi) Indebtedness arising from Guarantees, letters of
credit, and bid, performance or surety bonds or similar bonds or
instruments securing any obligations of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business, which
Guarantees, letters of credit, bonds or similar instruments do not
secure other Indebtedness;
(vii) (A) Indebtedness (including Capital Lease
Obligations) Incurred by the Company or any of its Restricted
Subsidiaries to finance the purchase, lease or improvement of
property (real or personal) (whether through the direct purchase,
lease or improvement of assets or purchase of the Equity Interests of
any Person owning such assets), and (B) Attributable Debt of the
Company or any of its Restricted Subsidiaries; provided that the
aggregate principal amount of Indebtedness outstanding under clauses
(A) and (B) does not exceed 5% of Total Assets of the Company at the
time of any Incurrence thereof (including any Refinancing
Indebtedness with respect thereto);
(viii) Non-Recourse Indebtedness Incurred in connection
with the acquisition of real and/or personal property by the Company
or its Restricted Subsidiaries; provided that such Indebtedness was
in existence prior to the time of such acquisition and was not
Incurred by the Person from whom such property was acquired in
contemplation of such acquisition or in order to provide all or any
portion of the funds or credit support utilized to consummate such
acquisition;
(ix) Guarantees of any Indebtedness of a Restricted
Subsidiary otherwise permitted under this Section 4.03;
(x) Indebtedness under Hedging Obligations entered into
for bona fide hedging purposes of the Company and not for speculative
purposes; provided, however, that such Hedging Obligations do not
20
increase the Indebtedness of the Company outstanding at any time
other than as a result of fluctuations in foreign currency exchange
rates or interest rates, as applicable, or by reason of fees,
indemnities and compensation payable thereunder; and
(xi) Indebtedness other than that permitted pursuant to
clauses (i) through (x) of this Section 4.03(b); provided that the
aggregate outstanding amount of the Indebtedness permitted does not
at any time exceed $10 million.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any of its Restricted Subsidiaries, directly or
indirectly, to: (i) declare or pay any dividend or make any distribution on or
in respect of the Company's or any of its Restricted Subsidiaries' Capital Stock
or other Equity Interests, including any such payment in connection with any
merger or consolidation (other than dividends or distributions payable to the
Company or any of its Restricted Subsidiaries or payable in shares of Capital
Stock or other Equity Interests of the Company other than Redeemable Stock);
(ii) purchase, repurchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any of its Subsidiaries from any Person
(other than from the Company or any of its Restricted Subsidiaries); (iii)
purchase, repurchase, redeem, prepay, defease or otherwise acquire or retire for
value (A) any Subordinated Obligations prior to scheduled maturity, repayment or
sinking fund payment or (B) any Indebtedness of any Unrestricted Subsidiary; or
(iv) make any Investment other than a Permitted Investment (the foregoing
actions set forth in clauses (i) through (iv) being referred to as "Restricted
Payments"), if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default or Event of Default shall have occurred and
be continuing or shall occur as a consequence thereof; or
(2) such Restricted Payment (the amount so expended, if
other than in cash and if greater than $20 million, to be determined
in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a resolution of the Board of Directors),
together with the aggregate of all other Restricted Payments made on
or after the Effective Date, exceeds the sum of:
(A) $5 million;
(B) 50% of the Consolidated Net Income of the
Company accrued on a cumulative basis for the period
beginning on the first day of the first quarter following
the Effective Date and ending on the last day of the last
month immediately preceding the month in which such
Restricted Payment occurs (or, if aggregate cumulative
Consolidated Net Income for such period is a deficit,
minus 100% of such deficit);
(C) 100% of the aggregate net cash proceeds
received by the Company after the Effective Date from the
issuance or sale of Capital Stock or other Equity
Interests of the Company (other than such Capital Stock or
other Equity Interests issued or sold to a Subsidiary of
the Company or an employee stock ownership plan or similar
trust established by the Company or any of its
Subsidiaries and other than Redeemable Stock);
(D) the aggregate net cash proceeds received
after the Effective Date by the Company from the issuance
or sale of debt securities of the Company that have
subsequently been converted into or exchanged for Capital
Stock or other Equity Interests of the Company (other than
Redeemable Stock) plus the aggregate net cash proceeds
received by the Company at the time of such conversion or
exchange less the amount of any cash or other property
distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange;
(E) 100% of the aggregate net cash proceeds
received by the Company after the Effective Date upon the
exercise of options, warrants or similar instruments or
21
rights (whether issued prior to or after the Effective
Date) to purchase the Company's Capital Stock (other than
Redeemable Stock); and
(F) 100% of the aggregate net cash proceeds
received by the Company or any Restricted Subsidiary after
the Effective Date from (i) the sale or other disposition
of Investments (other than Permitted Investments) made by
the Company and its Restricted Subsidiaries in an
Unrestricted Subsidiary or (ii) a dividend from, or the
sale of the stock of, an Unrestricted Subsidiary; or
(3) the Company would not be permitted to Incur $1.00 of
additional Indebtedness pursuant to Section 4.03(a).
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the payment of any dividend within 60 days
after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture;
(ii) the acquisition or retirement of Capital Stock of the Company
held by any future, present or former employee, director or consultant of the
Company or any Subsidiary of the Company pursuant to the New Management
Incentive Program or any other management or employee equity, stock option or
benefit plan or any other agreement in an aggregate amount not to exceed $5
million in any fiscal year;
(iii) the acquisition by the Company or any of its Restricted
Subsidiaries of Equity Interests of the Company or such Restricted Subsidiary,
if the exclusive consideration for such acquisition is the issuance by the
Company or such Restricted Subsidiary of its Equity Interests (other than
Redeemable Stock);
(iv) the redemption, repurchase, acquisition or retirement of
Indebtedness of the Company or its Restricted Subsidiaries being concurrently
Refinanced by Refinancing Indebtedness permitted under Section 4.03;
(v) the purchase, repayment, redemption, prepayment, defeasance,
acquisition or retirement of any Indebtedness, if the exclusive consideration
therefor is the issuance by the Company of its Equity Interests (other than
Redeemable Stock);
(vi) the redemption, repurchase, acquisition or retirement of Equity
Interests in a Permitted Joint Venture of the Company or of a Restricted
Subsidiary, provided that (A) if the Company or any of its Restricted
Subsidiaries incurs Indebtedness in connection with such redemption, repurchase,
acquisition or retirement, after giving effect to such incurrence and such
redemption, repurchase, acquisition or retirement, the Company could Incur $1.00
of additional Indebtedness pursuant to Section 4.03(a) and (B) no Default or
Event of Default has occurred and is continuing or would result therefrom;
(vii) dividend payments to the holders of interests in Permitted
Joint Ventures of the Company or of a Restricted Subsidiary, ratably in
accordance with their respective Equity Interests or, if not ratably, then in
accordance with the priorities set forth in the respective organizational
documents for, and agreements among holders of Equity Interests in, such
Permitted Joint Ventures;
(viii) the acquisition or retirement of options, warrants and similar
instruments and rights upon the exercise thereof;
(ix) any purchase, redemption or other acquisition of Equity
Interests of a Healthcare Service Business which is required by applicable law,
regulation, rule, order, approval, license, permit or similar restriction (in
each case issued by a governmental authority) to be purchased, redeemed or
otherwise acquired by the Company or one of its Restricted Subsidiaries;
22
(x) the acquisition or retirement for value of any Equity
Interests of the Company, or the making of any Investments in any
Subsidiaries or joint ventures of the Company which previously
constituted a part of the Company's provider and healthcare
franchising segment, consisting of loans, advances or other
extensions of credit, in any case as acquired, retired or made as
part of the consideration for the sale by the Company of Equity
Interests in any such Subsidiaries or joint ventures and related
transactions, where the aggregate value of such Equity Interests of
the Company and the aggregate amount of such Investments made after
the Effective Date do not collectively exceed a total of [$____]
million; or
(xi) other Restricted Payments (excluding Investments that
were Restricted Payments when made but are no longer outstanding at
the time of determination of Restricted Payments permitted by this
clause (xi), but not excluding Investments made in accordance with
this clause (xi) that are subsequently sold or otherwise disposed of,
to the extent such sale or other disposition increases the amount of
Restricted Payments permitted to be made in accordance with Section
4.04(a)(2)(F)) made after the Effective Date in an aggregate amount
not to exceed $15 million.
(c) The Company shall deliver to the Trustee within 60 days after the
end of each of the Company's first three fiscal quarters (and 120 days after the
end of the Company's fiscal year) in which a Restricted Payment is made under
Section 4.04(a), an Officers' Certificate setting forth each Restricted Payment
made in such fiscal quarter, stating that each such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
Section 4.04 were computed, which calculations may be based on the Company's
financial statements included in filings required under the Exchange Act for
such quarter or such year. For purposes of calculating the aggregate amount of
Restricted Payments that are permitted under Section 4.04(a)(2), the amounts
expended for Restricted Payments permitted under clauses (ii) through (xi) of
Section 4.04(b) shall be excluded.
SECTION 4.05. Limitation on Payment Restrictions Affecting Restricted
Subsidiaries. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, from and after the Effective Date, directly or indirectly,
create or otherwise cause or permit to exist or become effective or enter into
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to: (i) pay dividends or make any other distributions on
its Equity Interests, the Equity Interests of any of its Restricted Subsidiaries
or on any other interest or participation in, or measured by, its profits, which
interest or participation is owned by the Company or any of its Restricted
Subsidiaries; (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries; (iii) make loans or advances to the Company or any of
its Restricted Subsidiaries; or (iv) sell, lease or transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries
except, in each case, for such encumbrances or restrictions existing under or by
reason of:
(1) applicable law, regulation, rule, order,
approval, license, permit or similar restriction, in each
case issued by a governmental authority;
(2) this Indenture and the Notes;
(3) contractual encumbrances or restrictions in
effect on the Effective Date, including, without
limitation, pursuant to the Credit Agreement and any
replacements, refundings, refinancings and substitute
facility or facilities thereof, in whole or in part, and
additional facility or facilities thereof and their
related documentation;
(4) in the case of clause (iv) of this Section
4.05, by reason of customary non-assignment or subletting
provisions in leases entered into in the ordinary course
of business;
(5) Prior Purchase Money Obligations;
(6) Indebtedness or Capital Stock of Restricted
Subsidiaries that have been or are acquired by or merged
with or into the Company or any of its Restricted
Subsidiaries after the Effective Date; provided that such
Indebtedness or Capital Stock was or is in existence prior
to the time of such acquisition or merger and was not
incurred, assumed or issued by the Person so acquired or
merged in contemplation of such acquisition or merger or
to provide all or any portion of the funds or credit
23
support utilized to consummate such acquisition or merger;
provided further that such restrictions only apply to such
Restricted Subsidiary and its Subsidiaries;
(7) contracts for the sale of assets not
otherwise prohibited by this Indenture, including without
limitation customary restrictions with respect to a
Subsidiary pursuant to an agreement that has been entered
into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary;
(8) in the case of clause (iv) of this Section
4.05, Secured Indebtedness otherwise permitted to be
Incurred pursuant to Section 4.03 and Section 4.11 that
limits the right of the debtor to sell, lease, transfer or
otherwise dispose of the assets securing such
Indebtedness;
(9) customary provisions contained in leases or
other agreements entered into in the ordinary course of
business or in Indebtedness permitted to be incurred
pursuant to Section 4.03, in each case which do not limit
the ability of any Restricted Subsidiary to take any of
the actions described in clauses (i) through (iv) of this
Section 4.05 with respect to a material amount of
dividends, distributions, Indebtedness, loans, advances or
sales, leases or transfers of properties or assets, as
applicable;
(10) provisions in joint venture agreements and
other similar agreements in each case related to Permitted
Joint Ventures of the Company or of a Restricted
Subsidiary that are materially similar to customary
provisions entered into by parties to joint ventures in
the Healthcare Service Business at the time of such joint
venture or similar agreement;
(11) restrictions on cash or other deposits or
net worth or similar type restrictions imposed by
customers under contracts entered into in the ordinary
course of business; and
(12) any encumbrances or restrictions imposed
by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations
referred to in clauses (1) through (11) of this Section
4.05, in whole or in part, provided that such amendments,
modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are
not materially more restrictive with respect to such
dividend and other payment restrictions than those
contained in the dividend or other payment restrictions
prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or
refinancing.
SECTION 4.06. Limitation on Use of Proceeds from Asset Sales.
(a) The Company and its Restricted Subsidiaries shall not, directly
or indirectly, consummate any Asset Sale with or to any Person other than the
Company or a Restricted Subsidiary, unless: (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of any such
Asset Sale at least equal to the fair market value of the asset sold or
otherwise disposed of, (ii) at least 70% of the net proceeds from such Asset
Sale are received in Cash at closing (unless (A) such Asset Sale is a lease, or
(B) such Asset Sale is in connection with the creation of, Investment in, or
issuance or sale of Equity Interests by, a Permitted Joint Venture of the
Company or of a Restricted Subsidiary or other Permitted Investment) and (iii)
with respect to any Asset Sale involving the Equity Interest of any Restricted
Subsidiary (unless such Restricted Subsidiary is, or as a result of such Asset
Sale would be, a Permitted Joint Venture of the Company or of a Restricted
Subsidiary or other Permitted Investment), the Company shall sell all of the
Equity Interests of such Restricted Subsidiary it owns. Within 365 days after
the receipt of Net Cash Proceeds in respect of any Asset Sale, the Company must
use all such Net Cash Proceeds either to invest in properties and assets used in
a Healthcare Service Business (including, without limitation, a capital
investment in any Person which becomes a Restricted Subsidiary) or to reduce the
Senior Indebtedness or the Aetna Note or Indebtedness of a Restricted
Subsidiary; provided that when any non-Cash proceeds are liquidated, such
proceeds (to the extent they are Net Cash Proceeds) will be deemed to be Net
Cash Proceeds at that time. When the aggregate amount of Excess Proceeds (as
defined below) exceeds $20 million, the Company shall make an offer (the "Excess
Proceeds Offer") to apply the Excess Proceeds to repurchase the Notes at a
purchase price equal to 100% of the principal amount of such Notes, plus accrued
24
and unpaid interest to the date of purchase (the "Excess Proceeds Purchase
Price"), in accordance with the terms contemplated in Section 4.06(b). If the
Company is required to do so by the terms of any other Indebtedness, the Excess
Proceeds Offer may be made ratably to purchase the Notes and other Senior
Indebtedness from the Company on the terms contemplated by such other Senior
Indebtedness. To the extent that the aggregate principal amount of the Notes
(plus accrued interest thereon) (and, if applicable, other Senior Indebtedness)
tendered pursuant to the Excess Proceeds Offer is less than the Excess Proceeds,
the Company may use such deficiency, or a portion thereof, for general corporate
purposes. If the aggregate principal amount of the Notes surrendered by Holders
thereof (and, if applicable, other Senior Indebtedness surrendered by holders
thereof) exceeds the amount of Excess Proceeds, the Company shall select the
Notes to be purchased in accordance with the procedures (including prorating in
the event of oversubscription) described under Sections 4.06(b), 4.06(c) and
4.06(d). "Excess Proceeds" shall mean any Net Cash Proceeds from an Asset Sale
that is not invested or used to reduce the Senior Indebtedness, the Aetna Note
or Indebtedness of a Restricted Subsidiary as provided in the second sentence of
this paragraph. Notwithstanding the foregoing, any Asset Sale which results in
Net Cash Proceeds of less than $5 million and all Asset Sales (including any
Asset Sale which results in Net Cash Proceeds of less than $5 million) in any
twelve consecutive-month period which result in Net Cash Proceeds of less than
$10 million in the aggregate shall not be subject to the requirement of Section
4.06(a)(ii).
(b) Within 10 days following the occurrence of an event which
mandates an Excess Proceeds Offer under Section 4.06(a), the Company shall mail
a notice (along with any other instructions determined by the Company,
consistent with this Section 4.06, that a Holder must follow in order to have
its Notes purchased) to the Trustee and to each Holder stating:
(1) that the Excess Proceeds Offer is being
made pursuant to this Section 4.06 and that all Notes
tendered and not subsequently withdrawn will be accepted
for payment and paid for by the Company;
(2) the Excess Proceeds Purchase Price and the
purchase date (which shall not be less than 30 days nor
more than 60 days after the date such notice is mailed)
(the "Excess Proceeds Offer Payment Date");
(3) that any Note not tendered shall continue
to accrue interest and shall continue to be governed by
the terms of this Indenture in all respects;
(4) that, unless the Company defaults in the
payment thereof, all Notes accepted for payment pursuant
to the Excess Proceeds Offer shall cease to accrue
interest on and after the Excess Proceeds Offer Payment
Date;
(5) that Holders electing to have any Notes
purchased pursuant to an Excess Proceeds Offer will be
required to surrender the Notes to be purchased to the
Paying Agent at the address specified in the notice prior
to the close of business on the Business Day next
preceding the respective Excess Proceeds Offer Payment
Date;
(6) that Holders will be entitled to withdraw
their election on the terms and conditions set forth in
such notice; and
(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
such new Note issued shall be in a principal amount of
$1,000 or integral multiples thereof.
(c) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Paying Agent
at the address specified in the notice prior to the close of business on the
Business Day next preceding the Excess Proceeds Offer Payment Date. Holders
shall be entitled to withdraw their election if the Trustee or the Company
receives not later than one Business Day prior to the purchase date a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note which was delivered for purchase by the Holder
25
and a statement that such Holder is withdrawing his election to have such Note
purchased. If on the Excess Proceeds Offer Payment Date the aggregate principal
amount of Notes and, if applicable, any other Senior Indebtedness included in
the Excess Proceeds Offer surrendered by holders thereof exceeds the Exceeds
Proceeds, the Company shall select the Notes and, if applicable, other Senior
Indebtedness to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Company so that only Notes and other Senior
Indebtedness in denominations of $1,000, or integral multiples thereof, shall be
purchased).
(d) On (or, in the case of clause (ii) of this Section 4.06(d), at
the Company's election, before) the Excess Proceeds Offer Payment Date, the
Company shall (i) accept for payment all Notes or portions thereof tendered and
not theretofore withdrawn and which are selected for repurchase pursuant to the
Excess Proceeds Offer, (ii) deposit with the Paying Agent immediately available
funds sufficient to pay the Excess Proceeds Purchase Price of all Notes or
portions thereof accepted for payment, and (iii) deliver or cause to be
delivered to the Trustee all Notes so tendered, together with an Officers'
Certificate specifying the Notes or portions thereof tendered to the Company or
the Paying Agent. The Paying Agent shall promptly mail or deliver to each holder
of Notes so tendered payment in an amount equal to the Excess Proceeds Purchase
Price for such Notes, and the Trustee shall promptly authenticate and mail or
deliver to such Holder one or more certificates evidencing new Notes equal in
aggregate principal amount to any unpurchased portion of the Notes surrendered;
provided that each such new Note shall be in a principal amount of $1,000 or
integral multiples thereof.
(e) The Company shall comply with the requirements of Regulation 14E
and Rule 13e-4 (other than the filing requirements of such rule) under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes pursuant to an Excess Proceeds Offer. To the extent that
the provisions of any such securities laws or regulations conflict with
provisions of this Section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or conduct any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction"): (i) on terms that are materially less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained at the time of such transaction in arm's-length dealings with a Person
who is not such an Affiliate and (ii) that, in the event such Affiliate
Transaction involves an aggregate amount in excess of $15 million, is not in
writing and has not been approved by a majority of the Disinterested Directors.
In addition, if such Affiliate Transaction involves an amount in excess of $30
million, a fairness opinion must be provided by a nationally recognized
appraisal or investment banking firm.
(b) The provisions of Section 4.07(a) shall not prohibit: (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii)
loans or advances to employees in the ordinary course of business in accordance
with past practices of the Company, but in any event not to exceed $2 million in
the aggregate outstanding at any one time, (iv) the payment of reasonable fees
to directors of the Company and its Subsidiaries who are not employees of the
Company or its Subsidiaries, (v) any transaction between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries or (vi)arrangements in
existence as of the Effective Date with Persons that employ staff providers and
which provide service exclusively on behalf of the Company and its Subsidiaries,
which arrangements are not material to the Company and its Subsidiaries taken as
a whole.
SECTION 4.08. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase all or any part of such
Holder's Notes (the "Change of Control Offer") at a purchase price in cash equal
to 101% of the aggregate principal amount thereof and premium, if any, plus
accrued and unpaid interest to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest and premium,
26
if any, due on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.08(b); provided, however, that notwithstanding the
occurrence of a Change in Control, the Company shall not be obligated to
purchase the Notes pursuant to this Section 4.08 in the event that it has
exercised its right to redeem all the Notes under paragraph 5 of the Notes. In
the event that at the time of such Change of Control the terms of any
Indebtedness restrict or prohibit the repurchase of Notes pursuant to this
Section 4.08, then prior to the mailing of the notice to Holders provided for in
Section 4.08(b), the Company shall (i) repay in full all such Indebtedness or
offer to repay in full all such Indebtedness and repay the Indebtedness of each
lender who has accepted such offer or, (ii) (x) obtain any requisite consent
under the agreements governing such Indebtedness to permit the repurchase of
Notes as provided for in this Section 4.08 or (y) deliver to the Trustee an
Officers' Certificate stating that no such consent is required.
(b) Within 10 days following any Change of Control (except as
provided in the proviso to the first sentence of Section 4.08(a)), the Company
shall mail a notice (along with any other instructions determined by the
Company, consistent with this Section 4.08, that a Holder must follow in order
to have its Notes purchased) to the Trustee and to each Holder stating:
(1) that the Change of Control Offer is being
made pursuant to Section 4.08 of this Indenture and that
all Notes tendered and not subsequently withdrawn shall be
accepted for payment and paid for by the Company;
(2) the purchase price and the purchase date
(which shall not be less than 30 days nor more than 60
days after the date such notice is mailed) (the "Change of
Control Payment Date");
(3) that any Note not tendered shall continue
to accrue interest and shall continue to be governed by
the terms of this Indenture in all respects;
(4) that, unless the Company defaults in the
payment thereof, all Notes accepted for payment pursuant
to the Change of Control Offer shall cease to accrue
interest on and after the Change of Control Payment Date;
(5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be
required to surrender the Notes to be purchased to the
Paying Agent at the address specified in the notice prior
to the close of business on the Business Day next
preceding the Change of Control Payment Date;
(6) that Holders shall be entitled to withdraw
their election on the terms and conditions set forth in
such notice;
(7) that Holders whose Notes are being
purchased only in part shall be issued new Notes equal in
principal amount to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each
such new Note issued shall be in a principal amount of
$1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts as
determined by the Company regarding such Change of
Control.
(c) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Paying Agent
at the address specified in the notice prior to the close of business on the
Business Day next preceding the Change of Control Payment Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not
later than one Business Day prior to the purchase date a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note which was delivered for purchase by the Holder and
a statement that such Holder is withdrawing his election to have such Note
purchased.
27
(d) On (or, in the case of clause (ii) of this Section 4.08(d), at
the Company's election, before) the Change of Control Payment Date, the Company
shall (i) accept for payment all Notes or portions thereof tendered and not
theretofore withdrawn, pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent immediately available funds sufficient to pay the purchase
price of all Notes or portions thereof accepted for payment, and (iii) deliver
or cause to be delivered to the Trustee all Notes so tendered, together with an
Officers' Certificate specifying the Notes or portions thereof tendered to the
Company or the Paying Agent. The Paying Agent shall promptly mail or deliver to
each Holder of Notes so tendered payment in an amount equal to the purchase
price for such Notes, and the Trustee shall promptly authenticate and mail or
deliver to such Holder one or more certificates evidencing new Notes equal in
aggregate principal amount to any unpurchased portion of the Notes surrendered;
provided that each such new Note shall be in a principal amount of $1,000 or
integral multiples thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(e) Notwithstanding the foregoing provisions of this Section, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in Section
4.08(b) applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply with the requirements of Regulation 14E
and Rule 13e-4 (other than the filing requirements of such rule) under the
Exchange Act, and any other securities laws and regulations thereunder that are
applicable in connection with the repurchase of the Notes resulting from a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Limitation on Liens. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien, other than Permitted Liens,
on any of their respective assets, now owned or hereafter acquired, securing any
Indebtedness, unless the Notes are equally and ratably secured; provided that if
the Indebtedness which is secured is by its terms expressly subordinate or
junior in right of payment to the Notes, the Lien securing such subordinate or
junior Indebtedness shall be subordinate and junior to the Lien securing the
Notes with the same relative priority as such subordinated or junior
Indebtedness shall have with respect to the Notes.
SECTION 4.12. Limitation on Sale/Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless: (i) the Company
or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the Notes
pursuant to Section 4.11, (ii) the net proceeds received by the Company or such
Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at
least equal to the fair market value of such property and (iii) the transfer of
such property is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.06.
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SECTION 4.13. Future Subsidiary Guarantors. The Company may not
permit any Restricted Subsidiary, directly or indirectly, to guarantee any
Indebtedness of the Company other than the Credit Agreement ("Guaranteed
Indebtedness") unless (i) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to the Indenture providing for a Subsidiary
Guarantee of payment of the Notes by such Restricted Subsidiary and (ii) such
Restricted Subsidiary waives and will not in any manner whatsoever claim or take
the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted Subsidiary under its
Subsidiary Guarantee. If the Guaranteed Indebtedness is pari passu with the
Notes, then the guarantee of such Guaranteed Indebtedness shall be pari passu
with or subordinated to the Subsidiary Guarantee; and if the Guaranteed
Indebtedness is subordinated to the Notes, then the guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary Guarantee at least to the
extent that all Guaranteed Indebtedness is subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon the release or discharge of the
guarantee which resulted in the creation of such Restricted Subsidiary's
Subsidiary Guarantee, except a discharge or release by, or as a result of,
payment under such guarantee.
ARTICLE 5
Successor Company
SECTION 5.01. Merger, Consolidation or Sale of Assets.
(a) The Company shall not consolidate with, merge with or into, or
transfer all or substantially all of its assets (in one transaction or a series
of related transactions) to, any Person or permit any party to merge with or
into it unless:
(i) the Company shall be the continuing Person, or the
Person (if other than the Company) (the "Successor Company") formed
by such consolidation or into or with which the Company is merged or
to which the properties and assets of the Company are transferred
shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia and
shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of
the obligations of the Company under the Notes and this Indenture and
this Indenture remains in full force and effect;
(ii) immediately before and immediately after giving
effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Company, the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been
incurred by the Company, the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Event of Default or
Default shall have occurred and be continuing;
(iii) except in the case of a merger of the Company with a
Wholly-owned Subsidiary (which does not have assets or liabilities in
excess of $1 million) of a newly-formed holding company for the sole
purpose of forming a holding company structure, the Company or the
Successor Company, as applicable, could, after giving pro forma
effect to such transaction, Incur $1.00 of Indebtedness pursuant to
Section 4.03(a); and
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Indenture (provided that the
Opinion of Counsel will not be required to cover compliance with any
financial tests or financial covenants).
(b) Notwithstanding clauses (ii) and (iii) of Section 5.01(a), (a)
any Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Company or another Restricted
Subsidiary and (b) the Company may merge with an Affiliate incorporated solely
for the purpose of reincorporating the Company in another jurisdiction.
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(c) The Successor Company shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture, and
the predecessor Company in the case of a conveyance, transfer or lease of all or
substantially all its assets shall be released from all obligations under this
Indenture, including, without limitation, any obligation to pay the principal of
and interest on the Notes.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of
interest on any Note when the same becomes due and payable
and such default continues for a period of 30 days;
(2) the Company (i) defaults in the payment of
the principal of any Note when the same becomes due and
payable at its Stated Maturity, upon redemption, upon
acceleration or otherwise or (ii) fails to redeem or
purchase Notes when required pursuant to this Indenture or
the Notes;
(3) the Company fails to comply with Section
5.01;
(4) the Company fails to comply in any respect
with any of its agreements in the Notes or this Indenture
(other than those referred to in (1), (2) or (3) above)
and such failure continues for 30 days after receipt of
the notice specified in the penultimate paragraph of this
Section 6.01;
(5) default under any mortgage, indenture or
instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness of the
Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries) whether such Indebtedness is
now existing or hereafter created, which default results
from the failure to pay any such Indebtedness at its
stated final maturity or results in the acceleration of
such Indebtedness prior to its stated final maturity and
the aggregate principal amount of such Indebtedness is at
least $20 million, or the principal amount of such
Indebtedness, together with the principal amount of any
other such Indebtedness the maturity of which has been
accelerated, aggregates $35 million or more;
(6) the Company or any Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an
order for relief against it in an involuntary
case;
(C) consents to the appointment of a
Custodian of it or for any substantial part of
its property; or
(D) makes a general assignment for
the benefit of its creditors; or takes any
comparable action under any foreign laws
relating to insolvency;
(7) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the
Company or any Restricted Subsidiary in an
involuntary case;
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(B) appoints a Custodian of the
Company or any Restricted Subsidiary or for any
substantial part of its property; or
(C) orders the winding up or
liquidation of the Company or any Restricted
Subsidiary;
or any similar relief is granted under any foreign laws,
and in each case the order or decree remains unstayed and
in effect for 60 days; or
(8) the Company or any Restricted Subsidiary
fails to pay final judgments aggregating in excess of $20
million which judgments are not paid, discharged or stayed
within 60 days after their entry.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must be in writing and specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
becoming aware of the occurrence thereof, written notice in the form of an
Officers' Certificate of any Event of Default and any event which with the
giving of notice or the lapse of time would become an Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(6) or (7) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% of the principal amount of the Notes then outstanding,
by written notice to the Company (and to the Trustee if such notice is given by
such Holders) (the "Acceleration Notice"), may, and the Trustee at the request
of such Holders shall, declare all unpaid principal of, and accrued interest on,
such Notes to be due and payable immediately. Upon a declaration of
acceleration, such principal and accrued interest shall be due and payable. If
an Event of Default specified in Section 6.01(6) or (7) with respect to the
Company occurs, all unpaid principal of and accrued interest on the Notes then
outstanding shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Company, the Trustee or any
Holder. The Holders of a majority of the aggregate principal amount of the Notes
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of, premium, if any, and 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. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
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SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the outstanding Notes by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except (i) a
Default in the payment of the principal of or interest on a Note or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Noteholder affected. When a Default or Event of
Default is waived, it is cured and ceases to exist, but no waiver shall extend
to any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Noteholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification by
the Noteholders satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal or interest when due, no Noteholder may pursue any
remedy with respect to this Indenture or the Notes unless:
(1) the Holder gives to the Trustee written
notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal
amount of the Notes outstanding make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
security or indemnity reasonably satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the
request within 30 days after receipt thereof and the offer
of security or indemnity; and
(5) during such 30-day period the Holders of a
majority of the aggregate principal amount of the
outstanding Notes do not give the Trustee a direction
which is inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, premium, if any, and interest on the Notes held by such
Holder, on or after the respective due dates expressed in the Notes, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Company, any Subsidiary, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and may become a
member, voting or nonvoting, of any committee of creditors appointed in any such
judicial proceedings. Any Custodian in any such judicial proceeding is hereby
32
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Noteholders for amounts due and unpaid on the
Notes for principal, premium, if any, and interest,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively;
and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Noteholder and the Company a notice that states
the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall 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 wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth
in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
33
Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with
respect to any action it takes or omits to take in good
faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel (provided that the Opinion of
Counsel will not be required to cover compliance with any financial tests or
financial covenants). The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
34
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Notes at the time
outstanding, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, upon reasonable notice to the Company and
during normal business hours.
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 Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default or an Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to each Noteholder notice of the Default or Event of Default within 90 days
after it becomes known to the Trustee, unless such Default or Event of Default
has been cured or waived. Except in the case of a Default or an Event of Default
in the payment of principal of or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of the Noteholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each February 1 beginning with the February 1 following the
date of this Indenture, and in any event prior to April 1 in each year, the
Trustee shall mail to each Noteholder a brief report dated as of February 1 that
complies with Section 313(a) of the TIA. The Trustee shall also comply with
Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder including the reasonable costs and expenses
of enforcing this Indenture against the Company (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of the powers or duties hereunder. The Trustee shall notify
the Company of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company of its indemnity obligations hereunder.
The Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the Company's expense in the defense. Such indemnified
parties may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel; provided, however, that the Company shall not be
required to pay such fees and expenses if it assumes such indemnified parties'
defense and, in such indemnified parties' reasonable judgment, there is no
conflict of interest between the Company and such parties in connection with
such defense. The Company need not reimburse any expense or indemnify against
any loss, liability or expense incurred by an indemnified party through such
party's own willful misconduct, negligence or bad faith.
35
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of, premium, if any, and interest on particular Notes.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(6) or (7) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Notes may remove the Trustee by so notifying the Trustee and may appoint
a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section
7.10;
(2) the Trustee is adjudged bankrupt or
insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Notes and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force that
certificates of the Trustee are provided anywhere in the Notes or in this
Indenture.
36
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding
Notes (other than Notes replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Notes have become due and payable, whether at maturity or
as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds or U.S.
Government Obligations on which payment of principal, premium, if applicable,
and interest when due will be sufficient to pay at maturity or upon redemption
all outstanding Notes, including interest thereon to maturity or such redemption
date (other than Notes replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
that the conditions precedent to satisfaction and discharge have been satisfied
(provided that the Opinion of Counsel will not be required to cover compliance
with any financial tests or financial covenants) and at the cost and expense of
the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all of its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 5.01 and the operation of
Sections 6.01(3), 6.01(4), 6.01(5), 6.01(6) (with respect only to Restricted
Subsidiaries of the Company), 6.01(7) (with respect only to Restricted
Subsidiaries of the Company) and 6.01(8) ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.01(3),
6.01(4), 6.01(5), 6.01(6) (with respect to Restricted Subsidiaries of the
Company only), 6.01(7) (with respect to Restricted Subsidiaries of the Company
only) or 6.01(8).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in
this Article 8 shall survive until the Notes have been paid in full. Thereafter,
the Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust
with the Trustee, for the benefit of the Holders, cash in
U.S. Dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as shall be
37
sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal
of, premium, if any, and interest on the outstanding Notes
on the stated maturity of such principal or installment of
interest or upon redemption;
(2) the Company shall have delivered to the
Trustee an Opinion of Counsel stating that the Holders of
the outstanding Notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such
defeasance and shall be subject to Federal income tax on
the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not
occurred, which such opinion, in the case of legal
defeasance, shall also state that (A) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling to such effect or (B)
since the Effective Date there has been a change in the
applicable Federal income tax laws or regulations to such
effect or (C) there exists controlling precedent to such
effect;
(3) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit;
(4) such defeasance shall not result in a
breach or violation of or constitute a default under any
material agreement or instrument to which the Company is a
party or by which it is bound; and
(5) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent to
such defeasance have been satisfied.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and premium, if applicable, and interest on the
Notes.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Noteholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 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 this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; provided, however, that, if the Company has made
any payment of interest on, premium, if any, or principal of any Notes because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
38
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Notes without notice to or consent
of any Noteholder:
(1) to cure any ambiguity, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for certificated or
uncertificated Notes (provided that the uncertificated
Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B)
of the Code);
(4) to add guarantees with respect to the Notes
or to secure the Notes;
(5) to add to the covenants of the Company for
the benefit of the Holders or to surrender any right or
power herein conferred upon the Company;
(6) to comply with any requirements of the SEC
in connection with qualifying, or maintaining the
qualification of, this Indenture under the TIA; or
(7) to make any change that does not adversely
affect the rights of any Noteholder.
After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Notes without notice to any
Noteholder but with the written consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange for the Notes). However, without the
consent of each Noteholder affected, an amendment may not:
(1) reduce the percentage of the principal
amount of the Notes whose Holders must consent to an
amendment, supplement or waiver;
(2) change the Stated Maturity or the time or
currency of payment of the principal, or any interest on
or reduce the rate of interest on or principal of any Note
or alter the redemption provisions with respect thereto;
(3) impair the right of any Holder to institute
suit for the enforcement of any payment on or with respect
to such Holder's Notes;
(4) waive a default in the payment of the
principal of or interest on any Note;
(5) make any change to the provisions of this
Indenture relating to the Excess Proceeds Offer;
(6) make any change to Section 9.07 of this
Indenture; or
(7) make any change in Section 6.04 or 6.07 or
the second sentence of this Section 9.02.
39
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Noteholder. An amendment or waiver becomes effective once both
(i) the requisite number of consents have been received by the Company or the
Trustee and (ii) such amendment or waiver has been executed by the Company and
the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
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 to issue a new Note
shall not affect the validity of such amendment.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Company enforceable against it
in accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof (including Section 9.03).
SECTION 9.07. Payment for Consent. Neither the Company nor any of its
Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to obtaining any consent, waiver or amendment of, or
direction in respect of, any of the terms or provisions of this Indenture or the
Notes, unless such consideration is offered or agreed to be paid, and paid, to
all Holders which so consent, waive, agree or direct in the time frame set forth
in solicitation documents relating to such consent, waiver, agreement or
direction.
40
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.
SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Magellan Health Services, Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention of: Chief Financial Officer
with a copy to:
Xxxx Xxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention of: Xxxxxx Xxxxxxxx
if to the Trustee:
HSBC Bank USA
[ISSUER SERVICES
000 XXXXX XXXXXX
XXX XXXX, XX 00000-0000
ATTENTION OF: XXXXX XXXXXX]
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 Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it; except that notices or
communications to the Trustee shall be effective only upon receipt.
SECTION 10.03. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA ss. 312(b) with other Noteholders
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 ss.
312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
41
(1) an Officers' Certificate in form and
substance reasonably satisfactory to the Trustee stating
that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in
the opinion of such counsel, all such conditions precedent
(provided that the Opinion of Counsel will not be required
to cover compliance with any financial tests or financial
covenants) have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of such
individual, he has made such examination or investigation
as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the
opinion of such individual, such covenant or condition has
been complied with.
SECTION 10.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned shall be so disregarded. Subject to
the foregoing, only Notes outstanding at the time shall be considered in any
such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Noteholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 10.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 10.10. No Personal Liability of Directors, Officers,
Employees and Stockholders. No director, officer, employee or stockholder of the
Company shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of such obligations or their creation. Each Noteholder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
42
SECTION 10.11. 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 successors.
SECTION 10.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 10.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
43
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
MAGELLAN HEALTH SERVICES, INC.
By:
---------------------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President &
Chief Financial Officer
HSBC BANK USA, as Trustee,
By:
---------------------------------------------
Name:
Title:
44
APPENDIX A
PROVISIONS RELATING TO NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A capitalized terms used but not
defined herein shall have the meanings given to such terms in the Indenture. In
addition, the following terms shall have the meanings indicated below:
"Definitive Note" means a certificated Note (bearing a restricted
securities legend if the transfer of such Note is restricted by applicable law)
that does not include the Global Notes Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Global Notes Legend" means the legend set forth under that caption
in Exhibit A to this Indenture.
"Securities Custodian" means the custodian with respect to a Global
Note (as appointed by the Depositary) or any successor person thereto, who shall
initially be the Trustee.
1.2 Other Definitions
TERM DEFINED IN SECTION
---- ------------------
"Agent Members" 2.1(b)
"Global Notes" 2.1(a)
2. The Notes
2.1 Title of the Notes
There shall be (i) a series of Notes designated as the "9 3/8 %
Series A Senior Notes due 2008" (the "Series A Notes") and (ii) a series of
Notes designated as the "9 3/8% Series B Senior Notes due 2008" (the "Series B
Notes").
2.2 Form and Dating
Upon their original issuance, Notes shall be issued in the form of
one or more global notes ("Global Notes") registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as Securities
Custodian for DTC, for credit by DTC to the respective accounts of beneficial
owners of the Notes represented thereby (or such other accounts as they may
direct). The Series A Notes and the Series B Notes shall be identical, and have
different CUSIP Numbers, and shall otherwise constitute one series for purposes
of this Indenture, including Articles 3, 6 and 9 hereof except that the two
series may differ with respect to their transferability under the Securities
Act.
(a) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Notes Legend
thereon and the "Schedule of Increases or Decreases in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
45
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 of the Indenture.
Except as set forth in Section 2.06 of the Indenture, the Global
Notes may be transferred, in whole and not in part, only to another nominee of
the Depositary or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Note deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in
accordance with this Section 2.1(b) and pursuant to an
order of the Company, authenticate and deliver initially
one or more Global Notes that (a) shall be registered in
the name of the Depositary for such Global Note or Global
Notes or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to
such Depositary's instructions or held by the Trustee as
Securities Custodian.
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 by the Trustee as Securities 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 of such Depositary governing the
exercise of the rights of a holder of a beneficial interest
in any Global Note.
(c) Definitive Notes. Except as provided in Section 2.3 or 2.4,
owners of beneficial interests in Global Notes will not be entitled to receive
physical delivery of certificated Notes.
2.3 Authentication. The Trustee shall authenticate and make available
for delivery upon a written order of the Company signed by two Officers Notes
for original issue on the date hereof in an aggregate principal amount of up to
$______ of Series A Notes and aggregate principal amount of up to $______ of
Series B Notes. Such order shall specify the amount of the Notes to be
authenticated, whether the Notes are Series A Notes or Series B Notes, and the
date on which the original issue of Notes is to be authenticated. The aggregate
principal amount of Notes of any series outstanding at any time may not exceed
the aggregate amount of Notes authorized for issuance by the Company pursuant to
one or more authentication orders except as provided in Section 2.07 of the
Indenture. At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with an order signed by two officers for
the authentication and delivery of such Notes; and the Trustee in accordance
with the order shall authenticate and make available for delivery such Notes as
provided in this Indenture and not otherwise.
2.4 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with the Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Note
shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Note or
another Global Note of the same series and such account shall be credited in
accordance with such order with a beneficial interest in the applicable Global
Note and the account of the Person making the transfer shall be debited by an
amount equal to the beneficial interest in the Global Note being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Note to a beneficial interest in another
Global Note of the same series, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of
46
the Global Note to which such interest is being transferred in an
amount equal to the principal amount of the interest to be so
transferred, and the Registrar shall reflect on its books and records
the date and a corresponding decrease in the principal amount of
Global Note from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Note
may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary
or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(b) Legend. Each Global Note shall bear a legend in substantially the
following form:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Each Definitive Note will also bear the following additional legend:
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
(c) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive
Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be
returned by the Depositary to the Trustee for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for Definitive Notes,
transferred in exchange for an interest in another Global Note, redeemed,
repurchased or canceled, the principal amount of Notes represented by such
Global Note shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Note) with respect to such Global Note, by the Trustee or the Securities
Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate, Definitive
Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Section 3.06, 4.06,
4.08 and 9.05 of the Indenture).
47
(iii) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent or
the Registrar may deem and treat the Person in whose name a Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for
all other purposes whatsoever, whether or not such Note is overdue,
and none of the Company, the Trustee, the Paying Agent or the
Registrar shall be affected by notice to the contrary.
(iv) All Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as
the Notes surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Note, a member of, or a
participant in the Depositary or any other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Notes or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary)
of any notice (including any notice of redemption or repurchase) or
the payment of any amount, under or with respect to such Notes. All
notices and communications to be given to the Holders and all
payments to be made to Holders under the Notes shall be given or made
only to the registered Holders (which shall be the Depositary or its
nominee in the case of a Global Note).
The rights of beneficial owners in any Global Note shall be
exercised only through the Depositary subject to the applicable rules
and procedures of the Depositary. The Trustee may rely and shall be
fully protected in relying upon information furnished by the
Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions
on transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants, members or
beneficial owners in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
2.5 Definitive Notes
(a) A Global Note deposited with the Depositary or with the Trustee
as Securities Custodian pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.3 and (i)
the Depositary notifies the Company that it is unwilling or unable to continue
as a Depositary for such Global Note or if at any time the Depositary ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice or
after the Company becomes aware of such cessation, or (ii) an Event of Default
has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations of the same series. Any
portion of a Global Note transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
(c) Subject to the provisions of Section 2.4(b), 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.
48
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Notes in fully registered form
without interest coupons.
49
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO 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
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend](1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
-----------------
(1) Include this additional legend for the Series B Notes as needed.
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.](2)
--------------------
(2) Include this additional legend for each Definitive Note.
No. $_____
9 3/8% Series [A] [B] Senior Notes due 2008
CUSIP No. _____
MAGELLAN HEALTH SERVICES, INC., a Delaware corporation, promises to
pay to Cede & Co., or registered assigns, the principal sum [of Dollars] [listed
on the Schedule of Increases or Decreases in Global Note attached hereto](3) on
November 15, 2008.
Interest Payment Dates: May 15 and November 15.
Record Dates:_______ May 1 and November 1.
-------------------
(3) Use the bracketed language for a Global Note.
Additional provisions of this Note are set forth on the other side of this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
MAGELLAN HEALTH SERVICES, INC.
By:
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President &
Chief Financial Officer
[CORPORATE SEAL]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
HSBC BANK USA,
as Trustee, certifies that this is one of the
Notes referred to in the Indenture.
By:
------------------------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF NOTE]
9 3/8% NOTE DUE 2008
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture (as defined).
1. Interest
(a) MAGELLAN HEALTH SERVICES, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above semiannually in
arrears on May 15 and November 15 of each year, commencing on November 15, 2003.
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 the Effective 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
at the rate borne by the Notes plus 1% per annum, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the May 1 or November 1 next preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal, premium, if any, and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of the
Notes represented by a Global Note (including principal, premium, if any, and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company, through the
Paying Agent, will make all payments in respect of a certificated Note
(including principal, premium, if any, and interest), by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
the Notes may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Notes, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, HSBC Bank USA, a New York banking corporation and trust
company (the "Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly-owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of the
Effective Date (the "Indenture"), between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Capitalized
terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all terms and provisions of
the Indenture, and Noteholders are referred to the Indenture and the TIA for a
statement of those terms.
The Notes are unsecured obligations of the Company issuable in two
series consisting of 9 3/8% Series A Senior Notes due 2008 limited to
$__________ aggregate principal amount at any one time outstanding and
consisting of 9 3/8% Series B Notes due 2008 limited to $___________ aggregate
principal amount at any time outstanding (subject, in each case, to Section 2.07
of the Indenture). This Note is one of the 9 3/8% Series [A] [B] Senior Notes
due 2008. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens, enter into sale and leaseback transactions and make asset sales. The
Indenture also imposes limitations on the ability of the Company to consolidate
or merge with or into any other Person or convey, transfer or lease all or
substantially all of the property of the Company.
5. Optional Redemption
Except as set forth in the following paragraph, the Notes will not be
redeemable at the option of the Company prior to November 15, 2006. The Notes
will be redeemable at the option of the Company on or after such date, in whole
or in part, upon not less than 30 nor more than 60 days prior notice, at the
following redemption prices (expressed as percentages of principal amount), plus
accrued and unpaid interest (if any) to the applicable redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if redeemed during the
12-month period beginning on November 15 of the years set forth below:
Year Redemption Prices
---- -----------------
2006 104.688%
2007 102.344%
In addition, at any time and from time to time prior to November 15,
2005, the Company may, at its option, redeem up to 35% of the original aggregate
principal amount of Notes at a redemption price (expressed as a percentage of
the principal amount) of 109.375%, plus accrued and unpaid interest thereon, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), with the net cash proceeds of one or more Equity Offerings; provided that
at least 65% of such original aggregate principal amount of Notes remains
outstanding immediately after the occurrence of such redemption; and provided,
further, that such redemption shall occur within 60 days of the date of the
closing of any such Equity Offering. Any such redemption shall be made upon not
less than 30 nor more than 60 days notice mailed to each Holder of Notes being
redeemed and otherwise in accordance with the procedures set forth in the
Indenture.
6. Sinking Fund
The Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his or her registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Notes (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Notes (or such portions thereof) called for redemption.
8. Repurchase of Notes at the Option of Holders
(a) Upon a Change of Control, any Holder of Notes will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Notes of such Holder at a purchase
price equal to 101% of the principal amount of the Notes to be repurchased plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
purchase) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or any Restricted Subsidiary consummates an Asset
Sale, the Company shall promptly commence a pro rata offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets (an "Excess
Proceeds Offer") pursuant to Section 4.06 of the Indenture to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, thereon, to the date of purchase in accordance with the
procedures set forth in the Indenture. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds
allocated for repurchase of Notes, the Trustee shall select the Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive an Excess Proceeds Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. Upon any transfer or exchange, the Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) or to transfer or
exchange any Notes for a period of 15 days prior to a selection of Notes to be
redeemed.
10. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Notes and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, premium, if any, and interest on the Notes to redemption or
maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended or supplemented without prior notice to
any Noteholder but with the written consent of the Holders of at least a
majority in principal amount of the outstanding Notes and (ii) any default or
compliance with any provision may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of Notes, the Company and the Trustee may amend or supplement the
Indenture or the Notes (i) to cure any ambiguity, defect or inconsistency; (ii)
to comply with Article 5 of the Indenture; (iii) to provide for certificated or
uncertificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code); (iv) to add Guarantees with respect to the Notes or to secure the Notes;
(v) to add additional covenants for the benefit of the Holders or to surrender
rights and powers conferred on the Company; (vi) to comply with the requirements
of the SEC in connection with the qualification of the Indenture or the Trustee
under the TIA; or (vii) to make any change that does not adversely affect the
rights of any Noteholder.
14. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding,
subject to certain limitations, may declare all the Notes to be immediately due
and payable. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Notes being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power under the Indenture.
The Holders of a majority in aggregate principal amount of the Notes, by written
notice to the Trustee and the Company, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and
Stockholders
No director, officer, employee or stockholder of the Company shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Noteholder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
18. Abbreviation
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
-------------------------- --------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The
following increases or decreases in this Global Note have been made:
Date of Exchange Amount of decrease in Amount of Increase in Principal amount of this Signature of authorized
Amount of Principal this Principal Amount of this Global Note following signatory of Trustee or
Global Note Global Note such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[ ] Section 4.08 [ ] Section 4.06
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
(must be an integral multiple of $1,000):
$
Date: Your Signature:
---------------------- -----------------------------
(Sign exactly as your name
appears on the other side of
the Note)
Signature Guarantee:
----------------------------------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee
