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XXXXX HEALTHCARE CORPORATION
_____________________________
$320,000,000
6% EXCHANGEABLE SUBORDINATED NOTES due 2005
_____________________________
_____________________________
INDENTURE
Dated as of January 10, 1996
_____________________________
_____________________________
THE BANK OF NEW YORK
_____________________________
as Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions............................................ 1
Section 1.02. Other Definitions...................................... 8
Section 1.03. Incorporation by Reference of TIA...................... 9
Section 1.04. Rules of Construction.................................. 9
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
Section 2.01. Form and Dating........................................ 10
Section 2.02. Execution and Authentication........................... 10
Section 2.03. Registrar and Paying Agent............................. 11
Section 2.04. Paying Agent to Hold Money in Trust.................... 11
Section 2.05. Holder Lists........................................... 12
Section 2.06. Transfer and Exchange.................................. 12
Section 2.07. Replacement Securities................................. 13
Section 2.08. Outstanding Securities................................. 13
Section 2.09. Treasury Securities.................................... 13
Section 2.10. Temporary Securities................................... 14
Section 2.11. Cancellation........................................... 14
Section 2.12. Defaulted Interest..................................... 14
Section 2.13. Record Date............................................ 15
Section 2.14. CUSIP Number........................................... 15
ARTICLE 3
COVENANTS
Section 3.01. Payment of Securities.................................. 15
Section 3.02. Maintenance of Office or Agency........................ 16
Section 3.03. Commission Reports..................................... 16
Section 3.04. Compliance Certificate................................. 18
Section 3.05. Taxes.................................................. 19
Section 3.06. Stay, Extension and Usury Laws......................... 19
Section 3.07. Change of Control...................................... 19
Section 3.08. Corporate Existence.................................... 21
ARTICLE 4
SUCCESSORS
Section 4.01. Limitations On Mergers, Consolidations or
Sales of Assets........................................ 22
Section 4.02. Successor Corporation Substituted...................... 23
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default...................................... 23
Section 5.02. Acceleration........................................... 26
Section 5.03. Other Remedies......................................... 27
Section 5.04. Waiver of Past Defaults................................ 27
Section 5.05. Control by Majority.................................... 27
Section 5.06. Limitation on Suits.................................... 28
Section 5.07. Rights of Holders to Receive Payment................... 28
Section 5.08. Collection Suit by Trustee............................. 28
Section 5.09. Trustee May File Proofs of Claim....................... 29
Section 5.10. Priorities............................................. 29
Section 5.11. Undertaking for Costs.................................. 30
ARTICLE 6
TRUSTEE
Section 6.01. Duties of Trustee...................................... 30
Section 6.02. Rights of Trustee...................................... 32
Section 6.03. Individual Rights of Trustee........................... 32
Section 6.04. Trustee's Disclaimer................................... 32
Section 6.05. Notice of Defaults..................................... 33
Section 6.06. Reports by Trustee to Holders.......................... 33
Section 6.07. Compensation and Indemnity............................. 33
Section 6.08. Replacement of Trustee................................. 34
Section 6.09. Successor Trustee or Agent by Merger, etc.............. 35
Section 6.10. Eligibility; Disqualification.......................... 36
Section 6.11. Preferential Collection of Claims Against Company...... 36
ARTICLE 7
AMENDMENT, SUPPLEMENT AND WAIVER
Section 7.01. Without Consent of Holders............................. 36
Section 7.02. With Consent of Holders................................ 37
Section 7.03. Compliance with TIA.................................... 38
Section 7.04. Revocation and Effect of Consents...................... 38
Section 7.05. Notation on or Exchange of Securities.................. 39
Section 7.06. Trustee to Sign Amendments, etc........................ 39
ii
ARTICLE 8 Page
MISCELLANEOUS
Section 8.01. TIA Controls........................................... 40
Section 8.02. Notices................................................ 40
Section 8.03. Communication by Holders with Other Holders............ 41
Section 8.04. Certificate and Opinion as to Conditions Precedent..... 41
Section 8.05. Statements Required in Certificate or Opinion.......... 42
Section 8.06. Rules by Trustee and Agents............................ 42
Section 8.07. Legal Holidays......................................... 42
Section 8.08. No Personal Liability of Directors, Officers,
Employees and Shareholders............................. 43
Section 8.09. Duplicate Originals.................................... 43
Section 8.10. Governing Law.......................................... 43
Section 8.11. No Adverse Interpretation of Other Agreements.......... 43
Section 8.12. Successors............................................. 43
Section 8.13. Severability........................................... 43
Section 8.14. Counterpart Originals.................................. 44
Section 8.15. Table of Contents, Headings, etc....................... 44
ARTICLE 9
REDEMPTION OF SECURITIES
Section 9.01. Notices to Trustee..................................... 44
Section 9.02. Selection of Securities to Be Redeemed................. 44
Section 9.03. Notice of Redemption................................... 45
Section 9.04. Effect of Notice of Redemption......................... 46
Section 9.05. Deposit of Redemption Price............................ 46
Section 9.06. Securities Redeemed in Part............................ 46
Section 9.07. Optional Redemption................................... 46
Section 9.08. Mandatory Redemption................................... 47
ARTICLE 10
EXCHANGE OF SECURITIES
Section 10.01.Right of Exchange...................................... 48
Section 10.02.Method of Exchange..................................... 48
Section 10.03.Fractional Interests................................... 50
Section 10.04.Adjustment of Exchange Rate............................ 51
Section 10.05.Escrow Agreement....................................... 52
Section 10.06.Notice of Certain Events............................... 57
Section 10.07.Transfer Taxes......................................... 57
Section 10.08.Shares Free and Clear.................................. 58
Section 10.09.Cancellation of Securities............................. 58
Section 10.10.Consolidation, etc., of Vencor......................... 58
iii
Section 10.11.Certain Tender or Exchange Offers for
Vencor Common Stock.................................... 59
Section 10.12.Obligations of Trustee and Escrow Agent................ 60
Section 00.00.Xxxx Equivalent........................................ 61
Section 10.14.Registration of Vencor Common Shares................... 61
ARTICLE 11
SUBORDINATION
Section 11.01.Agreement to Subordinate............................... 61
Section 11.02.Certain Definitions.................................... 62
Section 11.03.Liquidation; Dissolution; Bankruptcy................... 62
Section 11.04.Default on Designated Senior and Senior
Subordinated Debt...................................... 63
Section 11.05.Acceleration of Securities............................. 63
Section 11.06.When Distribution Must Be Paid Over.................... 64
Section 11.07.Notice by Company...................................... 64
Section 11.08.Subrogation............................................ 64
Section 11.09.Relative Rights........................................ 65
Section 11.10.Subordination May Not Be Impaired by Company........... 65
Section 11.11.Distribution or Notice to Representative............... 65
Section 11.12.Rights of Trustee and Paying Agent..................... 66
Section 11.13.Authorization to Effect Subordination.................. 66
Section 11.14.Amendments............................................. 66
EXHIBITS
Exhibit A FORM OF SECURITY
iv
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
310 (a)(1)............................................ 6.10
(a)(2)............................................. 6.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 6.10
(b) ............................................... 6.08; 6.10
(c) ............................................... N.A.
311 (a) .............................................. 6.11
(b) ............................................... 6.11
(c) ............................................... N.A.
312 (a)............................................... 2.05
(b)................................................ 8.03
(c) ............................................... 8.03
313 (a) .............................................. 6.06
(b)(1) ............................................ N.A.
(b)(2) ............................................ 6.06
(c) ............................................... 6.06; 8.02
(d)................................................ 6.06
314 (a) .............................................. 3.03; 8.02
(b) ............................................... N.A.
(c)(1)............................................. 8.04
(c)(2)............................................. 8.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e) .............................................. 8.05
(f)................................................ N.A.
315 (a)............................................... 6.01(iii)(b)
(b)................................................ 6.05; 8.02
(c) .............................................. 6.01(i)
(d)................................................ 6.01(iii)
(e)................................................ 5.11
316 (a)(last sentence) ............................... 2.09
(a)(1)(A).......................................... 5.05
(a)(1)(B) ......................................... 5.04
(a)(2)............................................. N.A.
(b) ............................................... 5.07
(c) ............................................... 2.13; 7.04
317 (a)(1) ........................................... 5.08
(a)(2)............................................. 5.09
(b) ............................................... 2.04
318 (a)............................................... 8.01
(b)................................................ N.A.
(c)................................................ 8.01
N.A. means not applicable.
____________________________
*THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
1
INDENTURE dated as of January 10, 1996 between Xxxxx Healthcare Corporation, a
Nevada corporation (the "COMPANY"), and The Bank of New York, as trustee
(the "TRUSTEE").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 6%
Exchangeable Subordinated Notes due 2005 (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01.DEFINITIONS.
"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. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee thereof.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE" means, at the time any determination thereof is to be
made, any lease of property, real or personal, in respect of which the present
value of the minimum rental commitment would be capitalized on a balance sheet
of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a Capital Lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
1
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any Person or group (as such
term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than
to a Person or group who, prior to such transaction, held a majority of the
voting power of the voting stock of the Company, (ii) the acquisition by any
Person or group (as defined above) of a direct or indirect interest in more than
50% of the voting power of the voting stock of the Company, by way of merger,
consolidation or otherwise, or (iii) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"CHANGE OF CONTROL TRIGGERING EVENT" means the occurrence of both a
Change of Control and a Rating Decline.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means Xxxxx Healthcare Corporation, as obligor under the
Securities, unless and until a successor replaces Xxxxx Healthcare Corporation,
in accordance with Article 4 hereof and thereafter includes such successor.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date PLUS (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock), LESS
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made in accordance
with GAAP as a result of the acquisition of such business) subsequent to the
date hereof in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, and excluding the cumulative effect of a
change in accounting principles, all as determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing
2
Directors who were members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 8.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"CREDIT FACILITY" means that certain Credit Agreement, dated as of
February 28, 1995, by and among the Company and Xxxxxx Guaranty Trust Company of
New York and the other banks that are party thereto, providing for $1.8 billion
in aggregate principal amount of senior term debt and up to $500.0 million in
aggregate principal amount of senior revolving debt, including any related
notes, collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended as of August 31, 1995, and as amended,
modified, extended, renewed, refunded, replaced or refinanced, in whole or in
part, from time to time.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to December,
1 2005.
"ESCROW AGENT" means The Bank of New York, as Escrow Agent, under the
Escrow Agreement until a successor replaces it in accordance with the applicable
provisions of the Escrow Agreement.
"ESCROW AGREEMENT" means that certain Escrow Agreement, dated as of
January 10, 1996, by and among the Company, NMEPI and NMEPHC and The Bank of New
York, as Escrow Agent.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE SECURITY" means any security, including Vencor Common
Stock, deliverable upon the surrender of the Securities for exchange in
accordance with the provisions of Article Ten.
"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
3
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, as in effect from time to time.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts or currency swap agreements and (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values.
"HOLDER" means a Person in whose name a Security is registered.
"INDEBTEDNESS" means with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to
4
give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"MARKET PRICE" means, with respect to any exchange, the average of
the Sale Prices of the Vencor Common Stock (or any Exchange Security, as the
case may be) for the five Business Day period (appropriately adjusted to take
into account the occurrence during such period of certain events that would
result in an adjustment of the Exchange Rate with respect to the shares of
Vencor Common Stock or any Exchange Security) commencing on the first Business
Day after delivery by the Company or the Escrow Agent of notice to the Holders
that the Company has elected to pay cash in lieu of delivering shares of Vencor
Common Stock or Exchange Security in exchange for any Securities. The period
between the date of delivery by a holder of a notice of exchange and the date of
determination of the Market Price may not exceed seven Business Days.
"MOODY'S" means Xxxxx'x Investors Services, Inc. and its successors.
"NMEPHC" means NME Property Holding Co., Inc., a Delaware
corporation.
"NMEPI" means NME Properties, Inc., a Delaware corporation.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
and any Vice President of the Company or any Subsidiary, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers,
one of whom must be the principal executive officer, principal financial officer
or principal accounting officer of the Company.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary or the Trustee.
"PAYMENT DEFAULT" means any failure to pay any scheduled installment
of interest or principal on any Indebtedness within the grace period provided
for such payment in the documentation governing such Indebtedness.
5
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"RATING AGENCIES" means (i) S&P and (ii) Moody's or (iii) if S&P or
Moody's or both shall not make a rating of the Securities publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, shall be substituted for S&P or Moody's or both, as the
case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (ii)
with respect to Moody's, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories); and (iii) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In determining
whether the rating of the Securities has decreased by one or more gradations,
gradations within Rating Categories (+ and - for S&P, 1, 2 and 3 for Moody's; or
the equivalent gradations for another Rating Agency) shall be taken into account
(E.G., with respect to S&P, a decline in a rating from BB+ to BB, as well as
from BB- to B+, shall constitute a decrease of one gradation).
"RATING DATE" means the date which is 90 days prior to the earlier of
(i) a Change of Control and (ii) the first public notice of the occurrence of a
Change of Control or of the intention by the Company to effect a Change of
Control.
"RATING DECLINE" means the occurrence on or within 90 days after the
date of the first public notice of the occurrence of a Change of Control or of
the intention by the Company to effect a Change of Control (which period shall
be extended so long as the rating of the Securities is under publicly announced
consideration for possible downgrade by any of the Rating Agencies) of: (a) in
the event the Securities are rated by either Moody's or S&P on the Rating Date
as Investment Grade, a decrease in the rating of the Securities by both Rating
Agencies to a rating that is below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by both Rating Agencies on the
Rating Date, a decrease in the rating of the Securities by either Rating Agency
by one or more gradations (including gradations within Rating Categories as well
as between Rating Categories).
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer
6
to whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"SALE PRICE" means with respect to the Vencor Common Stock (or any
other Exchange Security), for any given day, the closing sale price (or, if no
closing sale price is reported, the average of the bid and asked prices or, if
more than one bid or asked prices, the average of the average bid and average
asked prices) on such day of the Vencor Common Stock (or other Exchange
Security), reported on the New York Stock Exchange Composite Tape or, in the
event the Vencor Common Stock (or other Exchange Security) is not listed on the
New York Stock Exchange, such other national or regional securities exchange
upon which the Vencor Common Stock (or other Exchange Security) is listed and
principally traded, or, in the event the Vencor Common Stock (or other Exchange
Security) is not listed on a national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System, or, if no such price is available, the market value of the Vencor Common
Stock (or other Exchange Security) on such day determined in such manner as
shall be satisfactory to the Company, which shall be entitled to rely for such
purpose on the advice of any firm of investment bankers or securities dealers
having familiarity with the Vencor Common Stock (or other Exchange Security).
Notwithstanding the foregoing, the Sale Price shall be adjusted to reflect the
occurrence of any of the events specified in Section 10.04 that has resulted in
an adjustment of the Exchange Rate if the Sale Price as calculated above has not
been appropriately adjusted to reflect the occurrence of such event.
"SECURITIES" means the securities described above, issued under this
Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"S&P" means Standard & Poor's Corporation and its successors.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of
7
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 7.03 hereof.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"VENCOR" means Vencor, Inc., a Delaware corporation.
"VENCOR COMMON SHARES" means the 8,301,067 shares of Vencor Common
Stock to be deposited pursuant to the Escrow Agreement.
"VENCOR COMMON STOCK" means shares of common stock, $.25 par value,
of Vencor.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
SECTION 1.02.OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- -------
"Bankruptcy Law"...................... 5.01
"Change of Control Offer"............. 3.07
"Change of Control Payment"........... 3.07
"Change of Control Payment Date"...... 3.07
"Commencement Date"................... 2.15
"Custodian"........................... 5.01
"Designated Senior and Senior
Subordinated Debt"................... 11.02
"Event of Default".................... 5.01
"Exchange Rate"....................... 10.01
"Legal Holiday"....................... 8.07
8
"Notice of Default"................... 5.01
"Offer Amount"........................ 2.15
"Offer Period"........................ 2.15
"Paying Agent"........................ 2.03
"Permitted Transferee"................ 10.05
"Registrar"........................... 2.03
"Representative"...................... 11.02
"Senior and Senior Subordinated Debt". 11.02
SECTION 1.03.INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
"OBLIGOR" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them.
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;
9
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES; OFFER TO PURCHASE PROCEDURES
SECTION 2.01.FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Security shall be dated the date of its authentication. The
Securities shall be issuable only in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.
SECTION 2.02.EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Securities for the Company
by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture. The
form of Trustee's certificate of authentication to be borne by the Securities
shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities. The
aggregate principal amount of Securities outstanding at any time shall not
exceed the amount set forth herein except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
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Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03.REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Securities
may be presented for registration of transfer or for exchange and where
Securities may be surrendered for exchange in accordance with the provisions of
Article 10 for Vencor Common Shares (or cash, other securities and other
property under certain circumstances) (including any co-registrar, the
"REGISTRAR") and (ii) an office or agency where Securities may be presented
for payment (the "PAYING AGENT"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder. The
Company shall notify the Trustee and the Trustee shall notify the Holders of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-registrar. The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture, which
shall incorporate the provisions 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, or fails to give the foregoing
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
SECTION 2.04.PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to the due date of principal of, premium, if any, and
interest on any Securities, the Company shall deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and
interest 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 the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Securities,
and shall notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee
11
may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company) shall have no further liability for the money delivered to the
Trustee. If the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
SECTION 2.05.HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Section Holders and shall otherwise comply with TIA Section 312(a). If the
Registrar, the Company shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders, including the
aggregate principal amount of the Securities held by each thereof, and the
Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06.TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met; PROVIDED,
HOWEVER, that any Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar and the Trustee
duly executed by the Holder thereof or by his attorney duly authorized in
writing. To permit registrations of transfer and exchanges, the Company shall
issue and the Trustee shall authenticate Securities at the Registrar's request,
subject to such rules as the Trustee may reasonably require.
Neither the Company nor the Registrar shall be required to register
the transfer or exchange of a Security between the record date and the next
succeeding interest payment date.
No service charge shall be made to any Holder for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10 or 7.05 hereof, which shall be paid by the Company).
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Prior to due presentment for registration of transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of, premium, if any, and
interest on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
SECTION 2.07.REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the
Company, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss which any of them may
suffer if a Security is replaced. Each of the Company and the Trustee may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08.OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 3.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Subject to Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
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SECTION 2.09.TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities then outstanding have concurred in any demand, direction, waiver
or consent, Securities owned by the Company or any Affiliate of the Company
shall be considered as though not outstanding, except that for purposes of
determining whether the Trustee shall be protected in relying on any such
demand, direction, waiver or consent, only Securities that a Responsible Officer
actually knows to be so owned shall be so considered. Notwithstanding the
foregoing, Securities that are to be acquired by the Company or an Affiliate of
the Company pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by the Company or an Affiliate of the Company until
legal title to such Securities passes to the Company or such Affiliate, as the
case may be.
SECTION 2.10.TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee, upon receipt of the written order of the Company signed
by two Officers of the Company, shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company and the Trustee consider appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee, upon receipt of the written order of the Company signed by two
Officers of the Company, shall authenticate definitive Securities in exchange
for temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive Securities.
SECTION 2.11.CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall return
such cancelled Securities to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12.DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
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Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
related payment date, in each case at the rate provided in the Securities and in
Section 3.01 hereof. The Company shall, with the consent of the Trustee, fix or
cause to be fixed each such special record date and payment date. At least 15
days before the special record date, the Company (or the Trustee, in the name of
and at the expense of the Company) shall mail to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13.RECORD DATE.
The record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
Trustee is not the permitted under this Indenture shall be determined as
provided for in TIQ Section 316(c).
SECTION 2.14.CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and
if it does so, the Trustee shall use the CUSIP number in notices to Holders;
PROVIDED that any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the notice or on the
Securities and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee of any change in the CUSIP number.
ARTICLE 3
COVENANTS
SECTION 3.01.PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in this Indenture and the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary of the Company, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later than
five days following the date of payment, any money (including accrued interest)
that exceeds such amount of principal, premium, if any, and interest to be paid
on the Securities.
15
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the interest rate then applicable to the Securities
to the extent lawful. In addition, it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 3.02.MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Securities may be
surrendered for registration of transfer or exchange and where Securities may be
surrendered for exchange in accordance with the provisions of Article 10 for
Vencor Common Shares (and cash, other securities and other property under
certain circumstances) and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates The Bank of New York, 000 Xxxxxxx
Xxxxxx, 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000 as one such office or agency of the
Company in accordance with Section 2.03 hereof.
SECTION 3.03.COMMISSION REPORTS.
(i) So long as any of the Securities remain outstanding, the
Company shall provide to the Trustee within 15 days after the filing thereof
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
16
foregoing as the Commission may by rules and regulations prescribe) that the
Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. All obligors on the Securities shall comply with
the provisions of TIA Section 314(a). Notwithstanding to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or otherwise report
on an annual and quarterly basis on forms provided for such annual and
quarterly reporting pursuant to rules and regulations promulgated by the
Commission, the Company shall file with the Commission and provide to the
Trustee (a) within 90 days after the end of each fiscal year, annual reports
on Form 10-K (or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or comparable
form), including a "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" and a report thereon by the Company's
certified public accountants; (b) within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, reports on Form 10-Q (or any
successor or comparable form) containing the information required to be
contained therein (or required in any successor or comparable form),
including a "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS"; and (c) promptly from time to time after the
occurrence of an event required to be therein reported, such other reports on
Form 8-K (or any successor or comparable form) containing the information
required to be contained therein (or required in any successor or comparable
form); PROVIDED, HOWEVER, that the Company shall not be in default of the
provisions of this Section 3.03(i) for any failure to file reports with the
Commission solely by the refusal of the Commission to accept the same for
filing. Each of the financial statements contained in such reports shall be
prepared in accordance with GAAP.
(ii) The Trustee, at the Company's expense, shall promptly mail
copies of all such annual reports, information, documents and other reports
provided to the Trustee pursuant to Section 3.03(i) hereof to the Holders at
their addresses appearing in the register of Securities maintained by the
Registrar.
(iii) Whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability and make such information available
to securities analysts and prospective investors upon request.
(iv) The Company shall provide the Trustee with a sufficient number
of copies of all reports and other documents and information that the Trustee
may be required to deliver to the Holders under this Section 3.03.
(v) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
17
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.04.COMPLIANCE CERTIFICATE.
(i) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each has kept, observed, performed
and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge each entity has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action each is taking or proposes to take with respect thereto), all without
regard to periods of grace or notice requirements, and that to the best of his
or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the
Securities is prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
(ii) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 3.03 above shall be accompanied by a
written statement of the Company's certified independent public accountants (who
shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company or any
Subsidiary of the Company has violated any provisions of Article 3 or of Article
4 of this Indenture or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(iii) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of (a) any Default or Event of Default or (b) any event of default under any
other mortgage, indenture or instrument referred to in Section 5.01(v) hereof,
an Officers' Certificate specifying such Default, Event of Default or
18
event of default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 3.05.TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except (i) as contested in good faith by appropriate proceedings and with
respect to which appropriate reserves have been taken in accordance with GAAP or
(ii) where the failure to effect such payment is not adverse in any material
respect to the Holders.
SECTION 3.06.STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of 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 covenants that it shall not, by resort to any such law,
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 has been enacted.
SECTION 3.07.CHANGE OF CONTROL.
Upon the occurrence of a Change of Control Triggering Event, each
Holder of Securities shall have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
Holder's Securities pursuant to the offer described below (the "CHANGE OF
CONTROL OFFER") at an offer price in cash equal to 100% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, thereon to
the date of purchase (the "CHANGE OF CONTROL PAYMENT") on a date that is not
more than 90 days after the occurrence of such Change of Control Triggering
Event (the "CHANGE OF CONTROL PAYMENT DATE").
Within 30 days following any Change of Control Triggering Event, the
Company shall mail, or at the Company's request the Trustee shall mail, a notice
of a Change of Control to each Holder (at its last registered address with a
copy to the Trustee and the Paying Agent) offering to repurchase the Securities
held by such Holder pursuant to the procedures specified in such notice. The
Change of Control Offer shall remain open from the time of mailing until the
close of business on the Business Day next preceding the Change of Control
Payment Date. The notice, which shall
19
govern the terms of the Change of Control Offer, shall contain all instructions
and materials necessary to enable the Holders to tender Securities pursuant to
the Change of Control Offer and shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 3.07 and that all Securities tendered will be
accepted for payment;
(2) the Change of Control Payment and the Change of Control
Payment Date, which date shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed;
(3) that any Security not tendered will continue to accrue
interest in accordance with the terms of this Indenture;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
any Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the
Company, a depositary, if appointed by the Company, or a
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 will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be,
receives, not later than the close of business on the Business
Day next preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder
delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities
20
surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with
respect to PRO FORMA historical financial information after
giving effect to such Change of Control, information regarding
the Person or Persons acquiring control and such Person's or
Persons' business plans going forward) and any other
information that would be material to a decision as to whether
to tender a Security pursuant to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered and not withdrawn pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Securities so tendered the Change of
Control Payment for such Securities, and the Trustee shall promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new
Security equal in principal amount to any unpurchased portion of the Securities
surrendered, if any; PROVIDED that each such new Security shall be in a
principal amount of $1,000 or an integral multiple 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.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities as a result of a Change of Control Triggering Event.
SECTION 3.08.CORPORATE EXISTENCE.
Subject to Section 3.07 and Article 4 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of
21
the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
ARTICLE 4
SUCCESSORS
SECTION 4.01.LIMITATIONS ON MERGERS, CONSOLIDATIONS OR SALES OF ASSETS.
The Company may not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless:
(i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have
been made is a corporation organized or existing under the
laws of the United States, any state thereof or the District
of Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the
entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made
assumes all the Obligations of the Company under this
Indenture and the Securities pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee and
assumes all of the obligations of the Company under the Escrow
Agreement pursuant to a written agreement;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or
to which such sale, assignment,
22
transfer, lease, conveyance or other disposition shall have
been made shall have a Consolidated Net Worth immediately
after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding
the transaction.
The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel, covering clauses (i) through (iv) above, stating that the
proposed transaction and such supplemental indenture comply with this Indenture.
The Trustee shall be entitled to conclusively rely upon such Officers'
Certificate and Opinion of Counsel.
SECTION 4.02.SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 4.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation), and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company, herein.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 0.00.XXXXXX OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(i) default for 30 days in the payment when due of interest
on the Securities;
(ii) default in payment when due of the principal of or
premium, if any, on the Securities at maturity or
otherwise;
(iii) failure by the Company to comply with the provisions of
Section 3.07;
23
(iv) failure by the Company to comply with any other covenant
or agreement in the Indenture, the Securities or the
Escrow Agreement for the period and after the notice
specified below;
(v) any default that occurs under any mortgage, indenture or
instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Significant
Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Significant Subsidiaries),
whether such Indebtedness or Guarantee exists on the
date hereof or is created after the date hereof, which
default (a) constitutes a Payment Default or (b) results
in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount
of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there
has been a Payment Default or that has been so
accelerated, aggregates $25.0 million or more;
(vi) failure by the Company or any of its Significant
Subsidiaries to pay a final judgment or final judgments
aggregating in excess of $25.0 million entered by a
court or courts of competent jurisdiction against the
Company or any of its Significant Subsidiaries if such
final judgment or judgments remain unpaid or
undischarged for a period (during which execution shall
not be effectively stayed) of 60 days after their entry;
(vii) the Company or any Significant Subsidiary thereof
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 in which it is
the debtor,
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(c) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) admits in writing its inability generally to pay
its debts as the same become due;
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any
Significant Subsidiary thereof in an involuntary
case in which it is the debtor,
(b) appoints a Custodian of the Company or any
Significant Subsidiary thereof or for all or
substantially all of the property of the Company
or any Significant Subsidiary thereof, or
(c) orders the liquidation of the Company or any
Significant Subsidiary thereof,
and the order or decree remains unstayed and in effect
for 60 days; and
(ix) failure by the Company to make any exchange of Vencor
Common Shares (or such other securities or property or
cash as shall be added to such Vencor Common Shares or
as such Vencor Common Shares shall have been changed
into as provided in Article 10 hereof) for any Security
at the Exchange Rate and upon the terms set forth in
Article 10 hereof subject to the Company's right to pay
cash in lieu thereof pursuant to Section 10.13.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "CUSTODIAN" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
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A Default under clause (iv) is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
principal amount of the then outstanding Securities notify the Company and the
Trustee in writing, of the Default and the Company does not cure the Default
within 60 days after receipt of such notice. The written notice must specify
the Default, demand that it be remedied and state that the notice is a "NOTICE
OF DEFAULT."
SECTION 5.02.ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities by written notice to the
Company and the Trustee, may declare the unpaid principal of, premium, if any,
and any accrued and unpaid interest on all the Securities to be due and payable
immediately. Upon such declaration the principal, premium, if any, and interest
shall be due and payable immediately. If an Event of Default specified in
clause (vii) or (viii) of Section 5.01 hereof occurs with respect to the Company
or any Significant Subsidiary thereof such an amount shall IPSO FACTO become
and be immediately due and payable without further action or notice on the part
of the Trustee or any Holder.
If an Event of Default occurs under this Indenture prior to the
maturity of the Securities by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of such Securities prior to the date of maturity, then
a premium with respect thereto (expressed as a percentage of the amount that
would otherwise be due but for the provisions of this sentence) shall become and
be immediately due and payable to the extent permitted by law upon the
acceleration of such Securities if such Event of Default occurs during the
twelve-month period beginning on January 1 of the years set forth below:
YEAR PERCENTAGE
---- ----------
1996.............................. 106.00%
1997.............................. 105.40%
1998.............................. 104.80%
1999.............................. 104.20%
2000.............................. 103.60%
2001.............................. 103.00%
2002.............................. 102.40%
2003.............................. 101.80%
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2004.............................. 101.20%
2005.............................. 100.60%
Any determination regarding the primary purpose of any such
action or inaction, as the case may be, shall be made by and set forth in a
resolution of the Board of Directors (including the concurrence of a majority of
the independent directors of the Company then serving) delivered to the Trustee
after consideration of the business reasons for such action or inaction, other
than the avoidance of payment of such premium or prohibition on redemption. In
the absence of fraud, each such determination shall be final and binding upon
the Holders of Securities. Subject to Section 6.01 hereof, the Trustee shall be
entitled to rely on the determination set forth in any such resolutions
delivered to the Trustee.
SECTION 5.03.OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or interest on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 5.04.WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under this Indenture except a continuing
Default or Event of Default in the payment of the principal of, premium, if any,
or interest on any Security or in respect of the exchange of Securities pursuant
to Article 10 hereof. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
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SECTION 5.05.CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders or that may involve the Trustee in
personal liability. The Trustee may take any other action which it deems proper
which is not inconsistent with any such direction.
SECTION 5.06.LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Securities only if:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 5.07.RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal, premium, if any, and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such
28
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 5.08.COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 5.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor for the whole amount of principal, premium, if any, and interest
remaining unpaid on the Securities and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
amounts due the Trustee under Section 6.07 hereof, including the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 5.09.TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 6.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
29
SECTION 5.10.PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 6.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 5.10 upon five Business Days prior notice to
the Company.
SECTION 5.11.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 a 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 and expenses, 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 5.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 6
TRUSTEE
SECTION 6.01.DUTIES OF TRUSTEE.
(i) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
30
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(ii) Except during the continuance of an Event of Default known to
the Trustee:
(a) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the
Trustee need perform only those duties that are specifically
set forth in this Indenture or the TIA and no others, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee, and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in
the case of any such certificates or opinions which by any
provisions hereof are required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(iii) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph
(ii) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 5.05 hereof.
(iv) Whether or not therein expressly so provided every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (i), (ii), and (iii) of this Section.
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(v) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives security and
indemnity satisfactory to it against any loss, liability or expense.
(vi) 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.
Absent written instruction from the Company, the Trustee shall not be required
to invest any such money. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(vii) The Trustee shall not be deemed to have knowledge of any
matter unless such matter is actually known to a Responsible Officer.
SECTION 6.02.RIGHTS OF TRUSTEE.
(i) The Trustee may conclusively rely upon 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.
(ii) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(iii) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(iv) 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 conferred upon it by this Indenture. A permissive right
granted to the Trustee hereunder shall not be deemed an obligation to act.
(v) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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SECTION 6.03.INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 6.10 and 6.11 hereof.
SECTION 6.04.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 Securities, nor shall it
be accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, nor shall it be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, nor shall it be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
SECTION 6.05.NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders.
SECTION 6.06.REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each December 31 beginning with the December 31
following the date hereof, the Trustee shall mail to the Holders a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with TIA Section 313(b). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Securities are listed. The Company shall promptly notify
the Trustee when the Securities are listed on any stock exchange.
33
SECTION 6.07.COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee shall agree. 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 promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities, damages, claims or expenses incurred by it arising out of or in
connection with the acceptance of its duties and the administration of the
trusts under this Indenture, except as set forth below. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 6.07 shall survive
the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(vii) or (viii) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
34
SECTION 6.08.REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 6.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 6.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. 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
35
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 6.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 6.08, the Company's obligations under Section 6.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 6.09.SUCCESSOR TRUSTEE OR AGENT BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee or Agent.
SECTION 6.10.ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA 313(a) (1),(2) and (5). The Trustee is subject to TIA
Section 310(b).
SECTION 6.11.PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 7
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 7.01.WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture
or the Securities without the consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency;
36
(ii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iii) to provide for the assumption of the Company's
obligations to the Holders of the Securities in the case
of a merger, consolidation or sale of assets pursuant to
Article 4 hereof;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of the Securities or
that does not adversely affect the legal rights
hereunder of any such Holder; or
(v) to comply with requirements of the Commission in order
to effect or maintain the qualification of this
Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon receipt by the Trustee of the documents described in Section 7.06
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture which affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 7.02.WITH CONSENT OF HOLDERS.
Except as provided in the next succeeding paragraphs, this Indenture
or the Securities may be amended or supplemented with the consent of the Holders
of at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for such Securities), and any existing default or compliance with any provision
of this Indenture or the Securities may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities
(including consents obtained in connection with a tender offer or exchange offer
for such Securities).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless
37
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section 7.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
Subject to Sections 5.04 and 5.07 hereof, the Holders of a majority in aggregate
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities. Without the consent of each Holder affected, however, an amendment
or waiver may not (with respect to any Security held by a non-consenting
Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Security;
(iii) reduce the rate of or change the time for payment of interest
on any Security;
(iv) make any change regarding the exchange rights set forth in
Article 10 other than to increase the Exchange Rate;
(v) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities
(except a rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal amount
thereof and a waiver of the payment default that resulted from
such acceleration);
(vi) make any Security payable in money other than that stated in
the Securities;
(vii) make any change in Section 5.04 or 5.07 hereof; or
38
(viii) make any change in this sentence of this Section 7.02.
SECTION 7.03.COMPLIANCE WITH TIA.
Every amendment to this Indenture or the Securities shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 7.04.REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to its
Security if the Trustee receives written notice of revocation before the date
the waiver or amendment becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for determining which Holders must consent to such amendment or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 2.05 hereof or (ii) such other date as the Company shall
designate.
SECTION 7.05.NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for
all Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment or waiver.
SECTION 7.06.TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 7 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 or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 6.01, shall be fully protected in relying upon,
39
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
such amendment or Supplemental Indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it shall be valid and
binding upon the Company in accordance with its terms. The Company may not sign
an amendment or supplemental indenture until the Board of Directors approves it.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01.TIA CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 8.02.NOTICES.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company:
Xxxxx Healthcare Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Treasurer
With a copy to:
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. XxXxxxxx
40
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Unless otherwise set forth above, any notice or communication to
a Holder shall be mailed by first class mail, certified or registered, return
receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person desired in TIA Section
313(c) to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 8.03.COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
41
SECTION 8.04.CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 8.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 8.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
SECTION 8.05.STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person 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 person, 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 satisfied; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied; PROVIDED,
however, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 8.06.RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
42
SECTION 0.00.XXXXX HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
43
SECTION 0.00.XX PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of the Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy and is therefore unenforceable.
SECTION 8.09.DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 8.10.GOVERNING LAW.
The internal law of the State of New York, shall govern and be used
to construe this Indenture and the Securities, without regard to the conflict of
laws provisions thereof.
SECTION 0.00.XX ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 8.12.SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 8.13.SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
44
SECTION 8.14.COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 8.15.TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
ARTICLE 9
REDEMPTION OF SECURITIES
SECTION 9.01.NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 9.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Securities to be redeemed and (iv) the redemption price.
SECTION 9.02.SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed at any time,
the Trustee shall select the Securities to be redeemed among the Holders in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are then listed, or, if the Securities are not
so listed, by such method as the Trustee shall deem fair and appropriate;
PROVIDED, that Securities with a principal amount of $1,000 shall not be
redeemed in part.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Securities of a Holder are to be redeemed, the
entire outstanding amount of Securities held by such Holder, even if not a
multiple of $1,000 shall be redeemed.
45
SECTION 9.03.NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed by first class mail a notice of
redemption to each Holder of Securities to be redeemed at its registered
address.
The notice shall identify the Securities (including CUSIP number) to
be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the porion of the
principal amount of such Security to be redeemed and that, after the
redemption date upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion shall be
issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date;
(7) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that
the Company shall have delivered to the Trustee, at least 45 days (or such
lesser period of at least 30 days to which the Trustee may agree) prior to the
redemption date, an Officers' Certificate requesting that the trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not the Holder
receives such notice. In any case, failure to give such notice by mail
46
or any defect in the notice to the Holder of any Security shall not affect the
validity of the proceeding for the redemption of any other Security.
SECTION 9.04.EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 9.03
hereof, Securities called for redemption will be due and payable on the
redemption date at the redemption price plus accrued and unpaid interest, if
any, to such date.
SECTION 9.05.DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of, and accrued interest on, all Securities to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent of the Company in
excess of the amounts necessary to pay the redemption price of (including any
applicable premium), and accrued interest on, all Securities to be redeemed.
On and after the redemption date, interest ceases to accrue on the
Securities or the portions of Securities called for redemption. If a Security
is redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Security was registered at the close of business on
such record date. If any Security called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent lawful
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Securities and in Section 3.01 hereof.
SECTION 9.06.SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
SECTION 9.07.OPTIONAL REDEMPTION.
On or after January 15, 1999, the Company may redeem all or any
portion of the Securities at a redemption price (expressed as a percentage of
the principal amount thereof), as set forth in the immediately succeeding
47
paragraph, plus accrued and unpaid interest, if any, to the applicable
redemption date (subject to the right of Holders of record on a Record Date to
receive interest due on an interest payment date that is on or prior to such
Redemption Date).
The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the following periods:
PERIOD PERCENTAGE
------ ----------
January 15, 1999 through May 31, 1999..................... 103.0%
June 1, 1999 through November 30, 1999.................... 102.5%
December 1, 1999 through May 31, 2000 .................... 102.0%
June 1, 2000 through November 30, 2000 ................... 101.5%
December 1, 2000 through May 31, 2001 .................... 101.0%
June 1, 2001 through November 30, 2001 ................... 100.5%
December 1, 2001 or thereafter ........................... 100.0%
SECTION 9.08.MANDATORY REDEMPTION.
Subject to the Company's obligation to make an offer to repurchase
Securities under certain circumstance pursuant to Section 3.07 hereof, the
Company shall have no mandatory redemption or sinking fund payments with respect
to the Securities.
48
ARTICLE 10
EXCHANGE OF SECURITIES
SECTION 10.01. RIGHT OF EXCHANGE.
Subject to and upon compliance with the provisions of this Article
10, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may,
at any time or from time on or after November 6, 1997 and before the close of
business on December 1, 2005 (or if not a Business Day the next preceding
Business Day), or, in case such Security or portion thereof shall have been
called for redemption prior to such date, then in respect of such Security or
portion thereof until and including, but (unless the Company shall default in
payment due upon the redemption thereof) not after, the close of business on the
Business Day next preceding the Redemption Date or, in case such Security or
portion thereof shall have been called for redemption in accordance with Section
10.11, then in respect of such Security or portion thereof until and including,
but (unless the Company shall default in payment due upon the redemption
thereof) not after, the close of business on the Business Day next preceding the
fifteenth day after the date the notice of redemption is mailed, be exchanged
for fully paid and non-assessable Vencor Common Shares (or such other securities
or property or cash as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have been changed into as provided in this Article
10) at the Exchange Rate hereinafter PROVIDED; provided that prior to November
6, 1997, the Securities will be exchangeable only in the event of the
consummation of a merger, consolidation or liquidation of Vencor pursuant to
which all of the shares of Vencor Common Stock held by the Exchange Agent are
converted into or exchanged for cash or other securities registered under the
Securities Act.
The rate at which Vencor Common Shares shall be delivered upon
exchange (herein called the "Exchange Rate") shall be initially 25.9403 Vencor
Common Shares for each $1,000 principal amount of Securities exchanged. The
Exchange Rate shall be subject to adjustment as provided in Sections 10.04,
10.05 and 10.10 and subject to the Company's right to pay an amount in cash in
lieu thereof as provided in Section 10.13.
In connection with any exchange, the Company shall promptly
determine the Market Price in accordance with the definition therein and deliver
to the Trustee and the Escrow Agent an Officers' Certificate setting forth such
calculation. The Trustee and the Escrow Agent shall be entitled to conclusively
rely upon any such determination.
SECTION 10.02. METHOD OF EXCHANGE.
49
In order to exercise the right of exchange, the Holder of any
Security to be exchanged shall surrender such Security to the office or agency
maintained for that purpose pursuant to Section 2.03, which shall initially be
the corporate trust office of the Escrow Agent, accompanied by written notice to
the Company and the Escrow Agent that the Holder elects to exchange such
Security or, if less than the entire principal amount of a Security is to be
exchanged, the portion thereof to be exchanged. Such notice shall also state
the name or names (with address) in which the certificate or certificates for
shares of Vencor Common Stock (or such other securities, property or cash as
shall be added to the Vencor Common Shares or as such shares of Vencor Common
Stock shall have been changed into as provided in this Article 10) which shall
be issuable on such exchange shall be issued. Securities surrendered for
exchange shall be accompanied (if so required by the Company or Escrow Agent) by
proper assignments thereof to the Company or in blank for transfer.
If the Company does not elect to deliver cash in lieu of shares of
Vencor Common Stock pursuant to Section 10.13 hereof, as promptly as practicable
after the receipt of such notice and the proper surrender of such Security as
aforesaid (subject, however, to the following paragraph of this Section 10.02
and to Section 10.13), the Company shall deliver or cause the Escrow Agent to
deliver at said office or agency to such Holder, or on his written order, a
certificate or certificates for the number of full shares of Vencor Common Stock
(or such other securities or property as shall be added to the Vencor Common
Shares or as such shares of Vencor Common Stock shall have been changed into as
provided in this Article 10) deliverable upon the exchange of any such Security
(or specified portion thereof), the property and securities (other than cash),
if any, apportioned thereto, a check for any cash apportioned thereto and
provision shall be made for any fractional interests in shares of Vencor Common
Stock or other securities or property as provided in Section 10.03. Such
exchange shall be deemed to have been effected immediately prior to the close of
business on the date on which such notice shall have been received by the
Company and the Escrow Agent and such Security shall have been properly
surrendered as aforesaid, and at such time the rights of the Holder of such
Security as a Holder shall cease and the person or persons in whose name or
names any certificate or certificates for shares of Vencor Common Stock (or such
other securities or property as shall be added to the Vencor Common Shares or as
such Vencor Common Shares shall have been changed into as provided in this
Article 10) shall be deliverable upon such exchange shall, as between such
person or persons and the Company and any Permitted Transferee (as defined
below), be deemed to have become the holder or holders of record of the shares
or securities represented thereby.
Delivery of such certificate or certificates, of property and
securities, if any, apportioned thereto and of any check for any cash
apportioned thereto and for cash in lieu of fractional interests as aforesaid
may
50
be delayed for a reasonable period of time at the request of the Company (which
shall be made by an Officer's Certificate) in order to effectuate the
calculation of the adjustments to the number of the shares of Vencor Common
Stock (or such other securities or property as shall be added to the Vencor
Common Shares or as such Vencor Common Shares shall have been changed into as
provided in this Article 10) and cash apportioned thereto pursuant to this
Article 10, to obtain any certificate representing securities to be delivered or
to complete any reapportionment of the shares of Vencor Common Stock, cash and
other property apportioned thereto which is required by this Article 10. If,
between any date an exchange under this Section is deemed effected and delivery
of the applicable security or securities, such security or securities shall
cease to have any or certain rights, or a record date or effective date of a
transaction to which Section 10.04, 10.05, or 10.10 applies shall occur, the
person entitled to receive such security or securities shall be entitled only to
receive such security or securities as so modified and any proceeds received
thereon on or after the date and time on which such an exchange is deemed
effected, and the Company, any Permitted Transferee (as defined below), the
Trustee and the Escrow Agent shall not otherwise be liable with respect to the
modification, from the date such an exchange is deemed effected to the date of
such delivery, of such security or securities.
Except as otherwise expressly provided in this Indenture, no payment
or adjustment shall be made upon any exchange on account of any interest accrued
on the Securities surrendered for exchange or on account of any dividends on the
Vencor Common Shares delivered upon such exchange; PROVIDED that (i) interest
accrued on any Securities surrendered for exchange on or after any record date
and before the interest payment date relating thereto shall be paid to the
holder of record as of such record date and (ii) the Holder of a Security
exchanged on or after the record date for any dividend on the shares of Vencor
Common Stock (or any other Exchange Security) shall be entitled to receive,
promptly after the Trustee's receipt thereof, any such dividend paid on the
shares of Vencor Common Stock (or any other Exchange Security) delivered upon
such exchange.
In the case of any Security which is exchanged in part only, upon
such exchange the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company except for transfer
taxes in the case that the new Security is to be registered in a name different
than that in which the old Security was issued, a new Security or Securities of
authorized denominations in principal amount equal to the unexchanged portion of
such Security.
SECTION 10.03. FRACTIONAL INTERESTS.
No fractional shares of Vencor Common Stock or fractional interest
in other securities or property shall be delivered upon exchange of Securities.
If more than one Security shall be surrendered for exchange at one
51
time by the same Holder, the number of full shares or whole interests in other
securities or property which shall be delivered upon exchange shall be computed
on the basis of the aggregate principal amount of the Securities (or specified
portions thereof to the extent permitted hereby) so surrendered. Instead of any
fractional shares of Vencor Common Stock (or other fractional interest) which
would otherwise be deliverable upon exchange of any Security or Securities (or
specified portions thereof), the Escrow Agent on behalf of the Company shall pay
a cash adjustment in respect of such fractional interest in an amount equal to
the same fraction of the Market Price per share of the Vencor Common Stock (or
the same fraction of the Market Price of a whole interest in the other
securities or property) on the Business Day next preceding the date of exchange.
The Escrow Agent shall obtain the funds for payment of such fractional interests
by, at the direction of the Company, (i) the sale of shares of Vencor Common
Stock held by it, to the extent that after such sale the number of shares of
Vencor Common Stock remaining on deposit with the Escrow Agent shall be
sufficient to allow the exchange of all outstanding Securities for shares of
Vencor Common Stock on the basis of the then applicable Exchange Rate, (ii) the
sale of whole interests in the other securities or property held by it, to the
extent that after such sale the number of whole interests in the other
securities or property remaining on deposit with the Escrow Agent shall be
sufficient to allow the exchange of all outstanding Securities on the basis of
the then applicable Exchange Rate or (iii) sufficient cash contributions from
the Company. The Company agrees to furnish any additional moneys required to
permit such payment.
SECTION 10.04. ADJUSTMENT OF EXCHANGE RATE.
The Exchange Rate shall be subject to adjustment as follows:
(a) In the event Vencor shall, (i) pay a dividend on the Vencor
Common Stock in Vencor Common Stock, (ii) subdivide outstanding shares of
Vencor Common Stock into a greater number of shares of Vencor Common
Stock, (iii) combine outstanding shares of Vencor Common Stock into a
smaller number of shares of Vencor Common Stock, or (iv) issue, by
reclassification of Vencor Common Stock, any shares of its common stock
(which in any such case shall apply to the Vencor Common Shares held by
the Escrow Agent under the Escrow Agreement), the Exchange Rate in effect
immediately prior thereto shall be proportionately adjusted so that the
Holder of any Securities thereafter surrendered for exchange shall be
entitled (subject to Section 10.13 hereof) to receive the number and kind
of shares of Vencor Common Stock (in addition to any cash or other
property apportioned thereto) which he would have owned or have been
entitled to receive after the happening of any of the events described
above had such Securities been exchanged immediately prior to the record
date (or if there is no record date, the effective date) of such event.
Such adjustments shall be made whenever any of the events listed above
shall
52
occur and shall become effective as of immediately after the close of
business on the record date in the case of a stock dividend and shall
become effective as of immediately after the close of business on the
effective date in the case of a subdivision or combination or
reclassification. Any Holder surrendering any Securities after such
record date or such effective date, as the case may be, shall be entitled
to receive shares of Vencor Common Stock at the Exchange Rate as so
adjusted pursuant to this Section 10.04(a), in addition to any cash or
other property apportioned thereto.
(b) Notwithstanding the foregoing provisions, no adjustment in the
Exchange Rate shall be required unless such adjustment would require an
increase or decrease in such Exchange Rate of more than 1%; PROVIDED
that any adjustments which by reason of this paragraph (b) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
(c) All calculations under this Section 10.04 shall be made to the
nearest one-ten-thousandth (.0001) of a share.
(d) Whenever the Exchange Rate is adjusted as herein provided, the
Company shall determine the adjusted Exchange Rate in accordance with this
Section 10.04 and shall prepare a certificate setting forth such adjusted
Exchange Rate and any cash and other property apportioned to the Vencor
Common Shares and showing in detail the facts upon which such adjustments
are based, and such certificate shall forthwith be filed with the Trustee
and the Escrow Agent and a notice stating the Exchange Rate has been
adjusted and setting forth the adjusted Exchange Rate and any cash and
other property apportioned to the Vencor Common Shares shall as soon as
practicable be mailed by or on behalf of the Company to the Holders at
their last addresses as they shall appear upon the Security register
maintained pursuant to Section 2.05.
SECTION 10.05. ESCROW AGREEMENT.
(a) Simultaneously with the execution and delivery of this
Indenture the Company, NMEPHC and NMEPI are entering into the Escrow
Agreement with The Bank of New York, as Escrow Agent, pursuant to which
the Vencor Common Shares will be deposited with the Escrow Agent. The
Escrow Agent shall be the exchange agent for the exchange of Securities
for the Vencor Common Shares (or such other securities or property or cash
as shall be added to such Vencor Common Shares or as such Vencor Common
Shares shall have been changed into as provided in this Article 10) as the
Holders of all outstanding Securities shall from time to time be entitled
to receive pursuant to this Article 10 upon exchange thereof. The
Company,
53
NMEPHC, NMEPI and its Permitted Transferees (as defined below) may, at any
time and from time to time in its sole discretion, sell or transfer all or
any part of its right, title and interest in the Vencor Common Shares to
one or more wholly owned subsidiary of the Company or one or more
partnership all of the general partners and limited partners of which are
the Company and/or wholly owned subsidiaries of the Company (any of the
foregoing are hereinafter referred to as a "Permitted Transferee");
provided that: (1) such Vencor Common Shares sold or transferred shall
remain subject to the terms and conditions of the Escrow Agreement and
this Indenture; (2) any such Permitted Transferee must expressly agree in
writing to become bound by the terms and conditions of the Escrow
Agreement, as such Escrow Agreement, may be amended from time to time, as
though such Permitted Transferee were a party thereto; (3) the Company
shall notify the Escrow Agent in writing at the time of any such sale or
transfer as to the number of shares of Vencor Common Stock so sold or
transferred to such Permitted Transferee; and (4) such sale or transfer
shall be in compliance with federal and all applicable state and foreign
securities laws. Notwithstanding any such sale or transfer, except as
otherwise provided in the Escrow Agreement, the Company shall remain
liable to perform all of its duties and obligations hereunder and under
the Escrow Agreement.
(b) The Company, NMEPHC, NMEPI, and any Permitted Transferee, shall
each be entitled (based upon their respective ownership of shares of
Vencor Common Stock) to all (i) cash dividends paid on the shares of
Vencor Common Stock held by the Escrow Agent other than dividends paid
pursuant to a plan of liquidation, partial liquidation, recapitalization,
restructuring or other extraordinary cash dividends and (ii) interest
payments on any debt securities held for exchange by the Escrow Agent
which are issued in exchange for or with respect to Vencor Common Stock
held by the Escrow Agent, including pursuant to any merger or
consolidation of Vencor or in connection with any sale of all or
substantially all of the assets of Vencor. The Escrow Agent shall retain
and apply as hereinafter provided all other dividends paid on the
securities held by the Escrow Agent under the Escrow Agreement.
(c) If any distribution of cash, securities, or other property is
made with respect to shares of Vencor Common Stock or other property held
for exchange by the Escrow Agent under the Escrow Agreement (other than
(i) cash dividends payable on the shares of Vencor Common Stock or such
other property to which the Company, NMEPHC, NMEPI or any Permitted
Transferee is entitled and interest paid on debt securities, as specified
in paragraph (b) above, (ii) dividends, subdivisions, combinations and
reclassifications for which an adjustment in the Exchange Rate is made
pursuant to Section 10.04 and
54
(iii) securities or other property received in a transaction to which
Section 10.10 applies) or if transferable subscription rights, options,
warrants or other similar rights are granted to the Company, NMEPHC,
NMEPI, any Permitted Transferee (with respect to any securities or
property held by the Escrow Agent) or the Escrow Agent, as the holder
thereof, in respect of the shares of Vencor Common Stock or other property
held for exchange by the Escrow Agent, the Company will cause to be
deposited with the Escrow Agent any such securities, other property, cash
and rights that it, NMEPHC, NMEPI or any Permitted Transferee receives and
the Escrow Agent shall, as soon as reasonably practicable after its
receipt of any such securities, other property, cash or rights, notify the
Company, NMEPHC, NMEPI and any affected Permitted Transferee of such
receipt. The Company shall cause the Escrow Agent, to the extent such
rights, options, warrants, securities or other property are transferable,
to sell all such options, warrants, securities or other property and
rights for cash. Any net cash proceeds therefrom shall be apportioned
equally among the shares of Vencor Common Stock or such other property for
which outstanding Securities are exchangeable as of immediately after the
close of business on the record date for the distribution or grant to
which this paragraph (c) applies, or if there is no such record date, the
effective date of such distribution or grant. Any Holder surrendering any
Securities after such record date, or such effective date, as the case may
be, and prior to the distribution date shall be entitled to receive, in
addition to the shares of Vencor Common Stock or such other property for
which such Securities are exchangeable (and any cash or property
theretofore apportioned to such shares hereunder), the amount of cash so
apportioned to the shares of Vencor Common Stock or such other property.
Whenever a transaction occurs to which this paragraph (c) applies, the
Company shall determine the Exchange Rate (calculated to the nearest .0001
of a share) and the cash and other property apportioned to the shares of
Vencor Common Stock or such other property as adjusted in accordance with
this paragraph (c) and shall prepare an Officers' Certificate setting
forth the Exchange Rate and the cash and other property apportioned to the
Vencor Common Shares or such other property held by the Escrow Agent under
the Escrow Agreement as so adjusted and showing in detail the facts upon
which such calculation is based, and such Officers' Certificate shall
forthwith be filed with the Trustee and Escrow Agent and a notice stating
that a transaction to which this paragraph (c) applies has occurred and
setting forth the Exchange Rate and the cash and other property
apportioned to the shares of Vencor Common Stock or such other property,
in accordance with this Section 10.5, shall as soon as practicable be
mailed by or on behalf of the Company to the Holders at their last
addresses as they shall appear upon the Security register maintained
pursuant to Section 2.05.
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(d) If, at any time any Securities are outstanding, any
distribution or grant is made to holders of any shares of Vencor Common
Stock or other property held or required to be held by the Escrow Agent
under the Escrow Agreement, of any nontransferable subscription rights,
options, warrants or other similar nontransferable rights, securities or
property, the Company shall elect to do any of the following: (i) to the
extent permissible by the terms of said subscription rights, options,
warrants or other similar nontransferable rights, securities or property,
cause such rights, securities or property to be distributed PRO RATA by
the Escrow Agent to the Holders PRO RATA based on the principal amount
of the Securities held by such Holders of record of Securities shown on
the Security register as of immediately after the close of business on the
record date (or if there is no record date, the close of business on the
effective date), for such distribution or grant, but subject to the
provisions of Section 10.7 hereof, (ii) provide to the Escrow Agent the
necessary funds and direct the Escrow Agent to exercise such options,
warrants, or rights and to hold the securities or other property received
upon such exercise for the benefit of Holders of Securities or (iii)
direct the Escrow Agent to retain such options, warrants, or rights and to
hold the securities or property for delivery to the Holders of Securities
upon the exchange of such Securities. Any options, warrants, rights,
securities or property retained pursuant to clause (iii) above and any
securities or other property received by the Escrow Agent pursuant to
clause (ii) above less any cash, property or securities as determined
pursuant to the last three sentences of this paragraph (d) delivered to or
sold or segregated for the benefit of the Company, NMEPHC, NMEPI or any
Permitted Transferee, shall be apportioned equally among the shares of
Vencor Common Stock or such other property for which outstanding
Securities are exchangeable as of immediately after the close of business
on the record date for the distribution or grant to which this paragraph
(d) applies or, if there is no such record date, the effective date of
such distribution or grant. Any Holder exchanging any Securities after
such record date, or such effective date, as the case may be, shall be
entitled to receive the shares of Vencor Common Stock or such other
property for which such Securities are exchangeable and the amount of
cash, or any such options, warrants, rights, securities or property, so
apportioned to such shares of Vencor Common Stock or such other property,
but subject to the provisions of the last three sentences of this
paragraph and Section 10.7 hereof. Notwithstanding the foregoing, any
such options, warrants or rights which may expire prior to the final
maturity date of the Securities, may not be retained pursuant to clause
(iii) of this paragraph (d) beyond the expiration date thereof, but must
be distributed or exercised pursuant to clause (i) or (ii) of this
paragraph (d). The Company shall be promptly repaid any amounts supplied
by it pursuant to the foregoing clause (ii) of this paragraph (d). If the
Company is entitled to any amount because it provided funds to
56
pay for an exercise pursuant to clause (ii) of this paragraph (d), it
shall receive such amount in cash held by the Escrow Agent, but if the
amount of such cash held by the Escrow Agent shall be less than the amount
due the Company, the Escrow Agent shall (i) as soon as reasonably
practicable and to the extent legally permissible, sell in accordance with
written instructions received from the Company such number of Vencor
Common Shares or other property or securities held or required to be held
by the Escrow Agent, as may be necessary to realize an amount of proceeds
which shall equal the amount of any such insufficiency, or (ii) if in the
opinion of the Company such sale is not advisable or legally permissible,
segregate for the benefit of the Company or deliver to the Company an
amount of property or securities, held or required to be held by the
Escrow Agent, having a Market Price, as determined by an Officers'
Certificate, equal to the amount of such insufficiency. Following such
sale, segregation or delivery, the Vencor Common Shares, cash and other
property or securities held by the Escrow Agent shall be proportionately
adjusted as of immediately after the close of business on the record date
for the distribution or grant to which this paragraph (d) applies or, if
there is no record date, the effective date of such distribution or grant.
(e) The Company shall be entitled to any net income or gain
resulting from investments of cash made by the Escrow Agent pursuant to
Section 6 of the Escrow Agreement, in accordance with the provisions
thereof, and the Company shall reimburse or cause the reimbursement of the
Escrow Agent for any losses realized in respect of such investments.
(f) The Company, NMEPHC, NMEPI and any Permitted Transferee shall
each have the full and unqualified right and power to exercise any rights
to vote, or to give consents to take any other action in respect of, its
respective share of the Vencor Common Shares or any other security held in
escrow under the Escrow Agreement at any time, and the Escrow Agent shall
have no duty to exercise any such rights.
(g) The Company, NMEPHC, NMEPI (or any applicable Permitted
Transferee) shall be entitled, out of the property held by the Escrow
Agent, to such number of shares of Vencor Common Stock and such amount of
any cash (investments contemplated by this Section 10.05 being deemed for
these purposes to be cash and to be valued at their outstanding principal
balance) and other property as shall be in excess of the number of shares
of Vencor Common Stock and the amount of cash and other property
apportioned thereto, all held by the Escrow Agent, which would be
deliverable upon the exchange of all Securities then outstanding, and such
excess shall be held by the Escrow Agent for the account of the Company
and, subject to the limitations contained in the Escrow Agreement,
released to the
57
Company, NMEPHC, NMEPI (or to any applicable Permitted Transferee) upon
demand of the Company. With respect to releases of cash, the Escrow Agent
shall release cash or such of the investment securities so held as the
Company may designate.
(h) Upon expiration of the right to surrender Securities for
exchange and when all other obligations of the Company, NMEPHC, NMEPI and
any Permitted Transferee shall have been satisfied under the Escrow
Agreement, any shares of Vencor Common Stock, all cash and investments and
other property held by the Escrow Agent under the Escrow Agreement which
are not required with respect to Securities previously surrendered for
exchange will, subject to the limitations contained in the Escrow
Agreement, be delivered by the Escrow Agent to the Company, NMEPHC, NMEPI
and any Permitted Transferee based upon their respective shares of the
Vencor Common Shares.
SECTION 10.06. NOTICE OF CERTAIN EVENTS.
In case at any time:
(a) Vencor shall declare a dividend (or any other distribution) on
Vencor Common Stock that would result in an adjustment to the Exchange
Rate; or
(b) Vencor shall authorize the granting of subscription rights,
options, warrants or other similar rights to holders of Vencor Common
Stock; or
(c) there shall occur any reclassification of Vencor Common Stock
(other than a subdivision or combination of outstanding shares of Vencor
Common Stock) or any consolidation or merger to which Vencor is a party
and for which approval of any stockholders of Vencor is required, or the
sale or transfer of all or substantially all of the assets of Vencor; or
(d) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Vencor;
then the Company shall cause to be filed at the office or agency
maintained for the purpose of exchange of Securities pursuant to Section
2.03, and shall cause to be mailed to the Holders of Securities at their
last addresses as they shall appear upon the Security register, as
promptly as practicable after receipt of notice by the Company of any
record date or other applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, or grant of rights, or, if a record is not to
be taken, the date as of which the holders of Vencor Common Stock of
58
record to be entitled to such dividend, distribution or grant of rights is
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is
expected that holders of Vencor Common Stock shall be entitled to exchange
their shares of Vencor Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up.
SECTION 10.07. TRANSFER TAXES.
The Company will pay any and all documentary, stamp, transfer or
similar taxes that may be payable in respect of the transfer and delivery of
Vencor Common Shares (or such other securities or property as shall be added to
such Vencor Common Shares or as such Vencor Common Shares shall have been
changed into as provided in this Article 10) pursuant hereto; provided that the
Company shall not be required to pay any such tax which may be payable in
respect of any transfer involved in the delivery of shares of Vencor Common
Stock (or such other securities or property as shall be added to such Vencor
Common Shares or as such Vencor Common Shares shall have been changed into as
provided in this Article 10) in a name other than that in which the Securities
so exchanged were registered and no such transfer or delivery shall be made
unless and until the person requesting such transfer has paid to the Company the
amount of any such tax, or has established, to the satisfaction of the Company,
that such tax has been paid; and, PROVIDED FURTHER, that the Company shall not
be obligated to pay any withholding taxes payable by Holders due to the exchange
of any Securities.
SECTION 10.08. SHARES FREE AND CLEAR.
The Company hereby warrants that, upon exchange of a Security
pursuant to this Indenture, the Holder thereof shall receive legal and valid
title to the shares of Vencor Common Stock and any cash and other property
apportioned thereto for which such Security is at such time exchangeable
pursuant to this Indenture free and clear of any and all Liens. Except as
provided in Section 10.07, the Company will discharge all Liens and pay all
charges with respect to the delivery of Vencor Common Shares (or such other
securities or property as shall be added to such Vencor Common Shares or as such
Vencor Common Shares shall have changed into as provided in this Article 10).
SECTION 10.09. CANCELLATION OF SECURITIES.
All Securities delivered for exchange shall be delivered by the
Escrow Agent to the Trustee for cancellation and the Trustee shall dispose of
the same as provided in Section 2.11.
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SECTION 10.10. CONSOLIDATION, ETC., OF VENCOR.
(a) In the case of any consolidation or merger of Vencor with or
into any other corporation or of any sale or transfer of all or
substantially all of the assets of Vencor or of any voluntary or
involuntary dissolution, liquidation or winding up of Vencor, the Company
shall execute and deliver to the Trustee a supplemental indenture
satisfactory in form to the Trustee, and to the Escrow Agent a
supplemental escrow agreement satisfactory in form to the Escrow Agent,
providing that the holder of each Security then outstanding shall have the
right thereafter to exchange such Security for (i) the kind and amount of
securities and other property receivable upon or in connection with such
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up by a holder of the number of shares of Vencor Common Stock for which
such Security was exchangeable immediately prior to such consolidation,
merger, sale, transfer, dissolution, liquidation or winding up had such
holder of shares of Vencor Common Stock failed to exercise any rights of
election as to the kind or amount of securities or other property
receivable upon such consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, and (ii) the kind and amount of securities
(other than Vencor Common Shares) and other property or cash apportioned
to the shares of Vencor Common Stock for which such Security was
exchangeable immediately prior to such consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Such supplemental
indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article 10.
(b) The provisions of this Section 10.10 shall similarly apply to
any successive consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
SECTION 10.11. CERTAIN TENDER OR EXCHANGE OFFERS FOR VENCOR COMMON STOCK.
In the event that a tender offer or exchange offer for the Vencor
Common Stock (or such other securities as shall be added to such Vencor Common
Shares or as such Vencor Common Shares shall have been changed into as provided
in this Article 10) is commenced by any person (including the issuer of such
security) after the date on which the Securities may be redeemed at the option
of the Company pursuant to Section 9.07, the Company has the right to redeem, in
each case, in accordance with this Section 10.11 at the optional redemption
prices set forth in the form of Security hereinabove recited, together with
accrued interest to the date fixed for redemption, all or any part of the
Securities so long as (i) the Trustee shall have received notice of such
redemption from the Company not later than two days after the later of the date
of commencement of such tender or exchange offer or the date on
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which the Company receives actual notice of the commencement of such tender
offer or exchange offer; provided that if the second such day is not a Business
Day, the Trustee shall have received such notice not later than the next
succeeding Business Day, (ii) any notice of redemption shall be mailed to the
Holders of Securities called for redemption not later than ten days after the
date of commencement of such tender or exchange offer as determined by Company
and (iii) such tender or exchange offer shall not have been terminated by the
date that such notice is mailed. If notice of redemption is given in accordance
with the preceding sentence, the Company shall thereafter have the right (but
not the obligation) to instruct the Escrow Agent to tender, for its own account
or for the account of NMEPHC, NMEPI or a Permitted Transferee, Vencor Common
Shares (or such other securities, as aforesaid) pursuant to such tender or
exchange offer, provided the number of Vencor Common Shares (or such other
securities, as aforesaid) so tendered does not include the number of such Vencor
Common Shares (or such other securities, as aforesaid) which would be
deliverable upon exchange of the aggregate principal amount of the outstanding
Securities after giving effect to such redemption in accordance with this
Section 10.11. In addition to the information called for by Section 9.03, any
notice of redemption given pursuant to this Section 10.11 shall state whether or
not the Company has decided by the date of such notice to cause Vencor Common
Shares (or such other securities, as aforesaid) held in escrow to be tendered
pursuant to such tender or exchange offer and, if tendered, that such Vencor
Common Shares (or such other securities, as aforesaid) may be sold, to the
extent purchased, to the offeror in accordance with such tender or exchange
offer except to the extent that the Holders of Securities called for redemption
duly surrender their Securities to the Escrow Agent in exchange for Vencor
Common Shares (or such other securities, as aforesaid) by not later than the
close of business on the last Business Day preceding the fifteenth day (which
date shall be specified) after the date such notice is mailed. The Company
shall cause to be withdrawn from the tender or exchange offer, or otherwise to
be delivered to the Escrow Agent, a number of Vencor Common Shares (or such
other securities, as aforesaid) at least equal to the number of Vencor Common
Shares (or such other securities, as aforesaid) deliverable in exchange for
Securities which are called for redemption pursuant to this Section 10.11 and
are duly surrendered for exchange for Vencor Common Shares (or such other
securities, as aforesaid) by not later than the close of business on such last
Business Day preceding the fifteenth day in order to permit such Securities so
to be exchanged. The proceeds of the sale of Vencor Common Shares (or such
other securities, as aforesaid) sold pursuant to the tender or exchange offer
and any shares tendered which are returned to the Company or the Escrow Agent
following the expiration or termination of such tender or exchange offer, or
which are withdrawn, which are no longer deliverable in exchange for Securities
called for redemption pursuant to this Section 10.11, shall be the property of
the Company, NMEPHC, NMEPI or such Permitted Transferee, as applicable, and not
subject to the Escrow Agreement.
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SECTION 10.12. OBLIGATIONS OF TRUSTEE AND ESCROW AGENT.
Neither the Trustee, subject to the provisions of Section 6.01, nor
the Escrow Agent, subject to the provisions of the Escrow Agreement, shall at
any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Exchange Rate, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed herein, or in any supplemental
indenture, in making the same. Neither the Trustee nor the Escrow Agent shall
be accountable with respect to the validity or value (or the kind or amount) of
any Vencor Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the exchange of any Security; and neither the
Trustee nor the Escrow Agent makes any representation with respect thereto.
Neither the Trustee nor the Escrow Agent shall be responsible for any failure of
the Company to transfer or deliver any shares of Vencor Common Stock or stock
certificates or other securities or property to the Escrow Agent as provided
herein or, subject to the provisions of Section 6.01 and the express obligations
assumed under the Escrow Agreement, to comply with any of the covenants of the
Company contained in this Article 10.
SECTION 10.13. CASH EQUIVALENT.
Notwithstanding any other provisions in this Article 10, in lieu of
delivering certificates representing shares of Vencor Common Stock or other
Exchange Security in exchange for Securities surrendered in accordance with
Section 10.02, the Escrow Agent shall, if so directed by the Company, pay to the
Holder surrendering such Securities an amount in cash equal to the Market Price
of the shares of Vencor Common Stock or other Exchange Security for which such
Securities are exchangeable, plus any cash and other property theretofore
apportioned to such shares of Vencor Common Stock in accordance with Section
10.05. Prior to or concurrently with so directing the Escrow Agent to make any
such cash payment, the Company shall deposit with the Escrow Agent the cash so
payable. In the event that the Company elects to direct the Trustee to pay cash
upon any exchange in lieu of delivering certificates representing shares of
Vencor Common Stock or any other Exchange Security, as the case may be, the
Company shall deliver or cause the Escrow Agent to deliver to such Holder
written notice of such election not later than the first Business Day after the
date of receipt by the Escrow Agent of the notice of exchange delivered by such
Holder pursuant to Section 10.02.
SECTION 10.14. REGISTRATION OF VENCOR COMMON SHARES.
The Company hereby covenants that at any time that a Holder of
Securities exchanges such Securities for certificates representing shares of
Vencor Common Stock and an effective registration statement of Vencor filed with
the Commission (or related qualification under state blue sky or securities
62
law) would be required in order for the Escrow Agent to deliver such shares of
Vencor Common Stock in the United States or to a United States Person, the
Company will use its reasonable best efforts to ensure that an effective
registration statement of Vencor is on file with the Commission covering the
delivery of such shares of Vencor Common Stock and any qualification under state
blue sky or securities laws required for such delivery is maintained. If such
registration statement is not effective or such qualification is not maintained,
the Company shall direct the Escrow Agent to pay such Holder cash, in lieu of
delivering such shares of Vencor Common Stock in accordance with the provisions
of Section 10.13.
ARTICLE 11
SUBORDINATION
SECTION 11.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Security is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior and Senior Subordinated Debt (whether outstanding
on the date hereof or hereafter created, incurred, assumed or Guaranteed), and
that the subordination is for the benefit of the holders of Senior and Senior
Subordinated Debt.
SECTION 11.02. CERTAIN DEFINITIONS.
"Designated Senior and Senior Subordinated Debt" means (i) so long
as any Obligations are outstanding under the Credit Facility, such Obligations
and (ii) thereafter, any other Senior and Senior Subordinated Debt permitted
hereunder the principal amount of which is $100.0 million or more and that has
been designated by the Company as "Designated Senior and Senior Subordinated
Debt".
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior and Senior Subordinated Debt.
"Senior and Senior Subordinated Debt" means any Indebtedness of the
Company unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Securities and all Obligations with respect to any of the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
and Senior Subordinated Debt will not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company, (x) any Indebtedness
of the Company to any of its Subsidiaries or other Affiliates or (y) any trade
payables .
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A distribution may consist of cash, securities or other property, by
set-off or otherwise.
SECTION 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, holders of Senior and Senior Subordinated Debt will be
entitled to receive payment in full of all Obligations due in respect of such
Senior and Senior Subordinated Debt (including interest accruing after the
commencement of any such proceeding at the rate specified in the applicable
Senior and Senior Subordinated Debt, whether or not allowed or allowable as a
claim in such proceeding) before the Holders will be entitled to receive any
payment with respect to the Securities and until all Obligations with respect to
Senior and Senior Subordinated Debt are paid in full, any distribution to which
the Holders would be entitled shall be made to the holders of Senior and Senior
Subordinated Debt (except that Holders may receive securities that (i) are
subordinated to at least the same extent as the Securities to Senior and Senior
Subordinated Debt and any securities issued in exchange for Senior and Senior
Subordinated Debt, (ii) are unsecured, (iii) are not Guaranteed by any
Subsidiary of the Company (except to the extent the Securities are so
Guaranteed), and (iv) have a Weighted Average Life to Maturity and final
maturity that are not shorter than the Weighted Average Life to Maturity of the
Securities or any securities issued to Holders of Senior and Senior Subordinated
Debt under the Credit Facility pursuant to a plan of reorganization or
readjustment).
SECTION 11.04. DEFAULT ON DESIGNATED SENIOR AND SENIOR SUBORDINATED DEBT.
The Company may not make any payment upon or in respect of the
Securities (except in securities that are subordinated to at least the same
extent as the Securities to Senior and Senior Subordinated Debt and any
securities issued in exchange for Senior and Senior Subordinated Debt) if:
(i) a default in the payment of the principal of, premium, if any
or interest on Designated Senior and Senior Subordinated Debt occurs and
is continuing beyond any applicable period of grace in the agreement,
indenture or other document governing such Designated Senior and Senior
Subordinated Debt; or
(ii) any other default occurs and is continuing with respect to
Designated Senior and Senior Subordinated Debt that permits holders of the
Designated Senior and Senior Subordinated Debt as to which such default
relates to accelerate its maturity and the Trustee receives a
64
notice of such default (a "Payment Blockage Notice"), for so long as any
Obligations are outstanding under the Credit Facility, from the
Representative thereunder and, thereafter, from the holders or
Representative of any Designated Senior and Senior Subordinated Debt. No
new period of payment blockage may be commenced within 360 days after the
receipt by the Trustee of any prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent notice.
The Company may and shall resume payments on the Securities:
(1) in the case of a payment default, upon the date which the
default is cured or waived, and
(2) in the case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received, unless
the maturity of any Designated Senior and Senior Subordinated Debt has
been accelerated.
SECTION 11.05. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior and Senior
Subordinated Debt of the acceleration.
SECTION 11.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Securities at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment is prohibited
by Section 11.04 hereof, such payment shall be held by the Trustee or such
Securityholder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior and Senior
Subordinated Debt as their interests may appear or their Representative under
the indenture or other agreement (if any) pursuant to which such Senior and
Senior Subordinated Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
and Senior Subordinated Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior and
Senior Subordinated Debt.
With respect to the holders of Senior and Senior Subordinated Debt,
the Trustee undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 11, and no implied
65
covenants or obligations with respect to the holders of Senior and Senior
Subordinated Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
and Senior Subordinated Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior and Senior
Subordinated Debt shall be entitled by virtue of this Article 11, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 11.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any Obligations
with respect to the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior and
Senior Subordinated Debt as provided in this Article.
SECTION 11.08. SUBROGATION.
After all Senior and Senior Subordinated Debt is paid in full and
until the Securities are paid in full, Holders shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Securities) to the
rights of holders of Senior and Senior Subordinated Debt to receive
distributions applicable to Senior and Senior Subordinated Debt to the extent
that distributions otherwise payable to the holders have been applied to the
payment of Senior and Senior Subordinated Debt. A distribution made under this
Article to holders of Senior and Senior Subordinated Debt that otherwise would
have been made to Holders is not, as between the Company and Holders, a payment
by the Company on the Securities.
SECTION 11.09. RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders of
Senior and Senior Subordinated Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior and
Senior Subordinated Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the
66
rights of holders and owners of Senior and Senior Subordinated Debt to
receive distributions and payments otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
SECTION 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior and Senior Subordinated Debt to
enforce the subordination of the Indebtedness evidenced by the Securities shall
be impaired by any act or failure to act by the Company or any Holder or by the
failure of the Company or any Holder to comply with this Indenture.
SECTION 11.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior and Senior Subordinated Debt, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 11, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior and Senior Subordinated Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 11.
SECTION 11.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless the Trustee shall have received at
its Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Securities to violate this Article 11. Only the Company or
a Representative may give the notice. Nothing in this Article 11 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 6.07
hereof.
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The Trustee in its individual or any other capacity may hold Senior
and Senior Subordinated Debt with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 11.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Security by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 11, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes.
SECTION 11.14. AMENDMENTS.
The provisions of this Article 11 shall not be amended or modified
without the written consent of the holders of all Senior and Senior Subordinated
Debt.
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SIGNATURES
Dated as of January 10, 1996 XXXXX HEALTHCARE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Dated as of January 10, 0000 XXX XXXX XX XXX XXXX, as
Trustee
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Bank of New York
69
6% Exchangeable Subordinated Note
due December 1, 2005
CUSIP No. 88033G-AD2
$320,000,000
XXXXX HEALTHCARE CORPORATION
promises to pay to CEDE & CO. or its registered assigns, the principal sum of
THREE HUNDRED AND TWENTY MILLION Dollars on December 1, 2005.
Interest Payment Dates: June 1 and December 1, commencing June 1, 1996
Record Dates: May 15 and November 15 (whether or not a Business Day).
XXXXX HEALTHCARE CORPORATION
By:
--------------------------
Dated: January 10, 1996
(SEAL)
Trustee's Certificate of Authentication:
Dated: January 10, 1996
This is one of the Securities referred
to in the within-mentioned Indenture:
The Bank of New York, as Trustee
By:
--------------------------
Authorized Signatory
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6% EXCHANGEABLE SUBORDINATED NOTE
due December 1, 2005
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Xxxxx Healthcare Corporation, a Nevada corporation
(the "COMPANY"), promises to pay interest on the principal amount of this
Security at the rate and in the manner specified below.
The Company shall pay interest in cash on the principal amount of
this Security at the rate per annum of 6%. The Company shall pay interest
semiannually in arrears on June 1 and December 1 of each year, commencing June
1, 1996 to Holders of record on the immediately preceding May 15 and November
15, respectively, or if any such date of payment is not a Business Day on the
next succeeding Business Day (each an "INTEREST PAYMENT DATE").
Interest shall be computed on the basis of a 360-day year comprised
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
the original issuance of the Securities. To the extent lawful, the Company
shall pay interest on overdue principal at the rate of 1% per annum in excess of
the interest rate then applicable to the Securities; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are cancelled after such record
date and on or before such Interest Payment Date. The Holder hereof must
surrender this Security to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Principal, premium, if any, and interest shall be payable at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, payment of interest may be made by
check mailed to the Holder's registered address. Notwithstanding the foregoing,
all payments with respect to Securities the Holders of which have given wire
transfer instructions, on or before the relevant record date, to the Paying
Agent shall be made by wire transfer of immediately available funds to the
accounts specified by such Holders.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee shall act
as Paying Agent and Registrar. The Company may change any Paying Agent
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or Registrar or co-registrar without prior notice to any Holder. The Company
and any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of January 10, 1996 (the "INDENTURE"), between the
Company and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA") as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Holders are referred to the Indenture and such act for
a statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Securities. The Securities are
unsecured general obligations of the Company. The Securities are limited to
$320,000,000 in aggregate principal amount.
5. OPTIONAL REDEMPTION. On or after January 15, 1999, the
Company may redeem all or any portion of the Securities at a redemption price
(expressed as a percentage of the principal amount thereof), as set forth in the
immediately succeeding paragraph, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of the Holders of record on a Record
Date to receive interest due on an Interest Payment Date that is on or prior to
such Redemption Date).
The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the following periods:
PERIOD PERCENTAGE
------ ----------
January 15, 1999 through May 31, 1999....................... 103.0%
June 1, 1999 through November 30, 1999...................... 102.5%
December 1, 1999 through May 31, 2000 ...................... 102.0%
June 1, 2000 through November 30, 2000 ..................... 101.5%
December 1, 2000 through May 31, 2001 ...................... 101.0%
June 1, 2001 through November 30, 2001 ..................... 100.5%
December 1, 2001 or thereafter ............................. 100.0%
6. MANDATORY REDEMPTION. Subject to the Company's obligation to
make an offer to repurchase Securities under certain circumstances pursuant to
Section 3.07 of the Indenture (as described in paragraph 6 below), the Company
shall have no mandatory redemption or sinking fund obligations with respect to
the Securities.
7. REPURCHASE AT OPTION OF HOLDER. If there is a Change of
Control Triggering Event, the Company shall offer to repurchase on the
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Change of Control Payment Date all outstanding Securities at 100% of the
aggregate principal amount thereof plus accrued and unpaid interest thereon to
the Change of Control Payment Date. Holders that are subject to an offer to
purchase shall receive a Change of Control Offer from the Company prior to any
related Change of Control Payment Date and may elect to have such Securities
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
8. SUBORDINATION. The Securities are subordinated to Senior and
Subordinated Debt (as defined in the Indenture), which includes any Indebtedness
of the Company that is not expressly pari passu with or subordinated to the
Securities and all Obligations (as defined in the Indenture) of the Company with
respect thereto. To the extent provided in the Indenture, Senior and
Subordinated Debt must be paid, in cash, cash equivalents or otherwise in a
manner satisfactory to the holders of Senior and Subordinated Debt, before the
Securities may be paid. The Company agrees, and each Holder by accepting a
Security consents and agrees, to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
9. NOTICE OF REDEMPTION. Notice of redemption shall be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address. Securities may
be redeemed in part but only in whole multiples of $1,000, unless all of the
Securities held by a Holder are to be redeemed. On and after the redemption
date, interest ceases to accrue on Securities or portions of them called for
redemption.
10. EXCHANGE RIGHTS. Subject to the provisions of the Indenture,
the holder of this Security has the right, at his option, at any time or from
time to time on or after November 6, 1997 until and including, but not after the
close of business on, the date of final maturity of this Security (except that,
in case this Security or a portion hereof shall be called for redemption and the
Company shall not thereafter default in making due provision for the payment of
the redemption price, such right shall terminate with respect to this Security
or such portion hereof at the close of business on the last business day
preceding the date fixed for redemption or, in case this Security or a portion
hereof shall be called for redemption in accordance with Section 10.11 of the
Indenture and the Company shall not thereafter default in making due provision
for the payment of the redemption price, such right shall terminate with respect
to this Security or such portion hereof at the close of business on the last
business day preceding the fifteenth day after the mailing of the notice of
redemption), to exchange the principal of this Security, or any portion thereof
which is $1,000 or a multiple of $1,000, into fully paid and non-assessable
shares of Vencor Common Stock, as said shares shall be constituted at the date
of exchange (or such other securities or property or cash as shall be added to
such Vencor Common Shares or as such Vencor Common Shares shall have been
changed into as provided in the Indenture), at the
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Exchange Rate of 25.9403 shares of Vencor Common Stock (or such other
securities, property or cash) for each $1,000 principal amount of the Securities
(the "Exchange Rate") or at the adjusted Exchange Rate in effect at the date of
exchange if an adjustment has been made, determined as provided in the
Indenture, upon surrender of this Security to the Company at the office or
agency of the Company maintained for the purpose in the Borough of Manhattan,
The City of New York, together with a fully executed notice substantially in the
form entitled "Exchange Notice" appearing below that the holder elects so to
exchange this Security (or any portion hereof which is an integral multiple of
$1,000); provided that the Company may, in lieu of delivering shares of Vencor
Common Stock in exchange for this Security, elect to pay the holder hereof an
amount in cash equal to the Market Price (as of the date of receipt at such
office or agency of such notice of exchange) as defined in the Indenture of such
shares of Vencor Common Stock into which this Security (or any portion hereof
which is an integral multiple of $1,000 which the holder elects to exchange) is
exchangeable, plus any securities, property or cash theretofore apportioned to
such shares of Vencor Common Stock, subject to certain conditions as more fully
described in the Indenture. Except as expressly provided in the Indenture, no
payment or adjustment shall be made on account of interest accrued on this
Security (or portion thereof) so exchanged or on account of any dividend or
distribution on any such shares of common stock of Vencor Power Company issued
upon exchange. If so required by the Company or the Trustee, this Security,
upon surrender for exchange as aforesaid, shall be duly endorsed by, or be
accompanied by instruments of transfer, in form satisfactory to the Company,
duly executed by, the holder or by his duly authorized attorney. The Exchange
Rate from time to time in effect is subject to adjustment as provided in the
Indenture. No fractional interest in Vencor Common Shares (or other securities)
will be issued on exchange, but an adjustment in cash will be made for any
fractional interest as provided in the Indenture.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons, and in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Securities between a record date and the corresponding
Interest Payment Date.
12. PERSONS DEEMED OWNERS. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Company may deem and treat the Person in whose name this Security
is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
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Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Holder of a Security shall be treated as its owner for all
purposes.
13. AMENDMENT, SUPPLEMENT AND WAIVERS. Except as provided in the
next succeeding paragraphs, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange offer for Securities) and any
existing default or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a tender offer or exchange offer for Securities).
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Security held by a non-consenting Holder of
Securities): (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security, (iii) reduce the rate of or change
the time for payment of interest on any Security, (iv) make any change regarding
the exchange rights set forth in Article 10 of the Indenture other than to
increase the Exchange Rate, (v) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Securities,
(except a rescission of acceleration of the Securities by the Holders of at
least a majority in aggregate principal amount thereof and a waiver of the
payment default that resulted from such acceleration), (vi) make any Security
payable in money other than that stated in the Securities, (vii) make any change
in the provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Securities to receive payments of principal of or premium,
if any, or interest on the Securities or (viii) make any change in the foregoing
amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of
Securities, the Company and the Trustee may amend or supplement the Indenture or
the Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to provide for the assumption of the Company's obligations to Holders of the
Securities in the case of a merger, consolidation or sale of assets, to make any
change that would provide any additional rights or benefits to the Holders of
the Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder, or to comply with requirements of the Securities
and Exchange Commission (the "COMMISSION") in order to effect or maintain the
qualification of the Indenture under the TIA.
14. DEFAULTS AND REMEDIES. Events of Default under the Indenture
include: (i) a default for 30 days in the payment when due of
A-6
interest on the Securities; (ii) a default in payment when due of the principal
of or premium, if any, on the Securities, at maturity or otherwise; (iii) a
failure by the Company to comply with the provisions described under the
covenant "Change of Control;" (iv) a failure by the Company for 60 days after
notice to comply with any of its other agreements in the Indenture, the
Securities or the Escrow Agreement; (v) any default that occurs under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Significant Subsidiaries (or the payment of which is
Guaranteed by the Company or any of its Significant Subsidiaries) whether such
Indebtedness or Guarantee exists on the date of the Indenture, or is created
after the date of the Indenture, which default (a) constitutes a Payment Default
or (b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or that has been so accelerated, aggregates
$25.0 million or more; (vi) failure by the Company or any of its Significant
Subsidiaries to pay a final judgment or final judgments aggregating in excess of
$25.0 million entered by a court or courts or competent jurisdiction against the
Company or any of its Significant Subsidiaries if such final judgment or
judgments remain unpaid or undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after their entry; (vii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries; and (viii) a failure by the Company to make any
exchange of Vencor Common Stock for any Security in accordance with the terms of
the Indenture. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities by written notice to the Company and the Trustee, may
declare all the Securities to be due and payable immediately (plus, in the case
of an Event of Default that is the result of willful actions (or inactions) by
or on behalf of the Company intended to avoid prohibitions on redemptions of the
Securities contained in the Indenture or the Securities, an amount of premium
applicable pursuant to the Indenture). Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries,
all outstanding Securities shall become due and payable without further action
or notice. Holders of the Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Securities notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the payment
of principal or interest) if it determines that withholding notice is in such
Holders' interest.
The Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding by written notice to the Trustee may
A-7
on behalf of the Holders of all of the Securities waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium on, or the
principal of, the Securities.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
The above description of Events of Default and remedies is qualified
by reference, and subject in its entirety, to the more complete description
thereof contained in the Indenture.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to enter into
certain mergers and consolidations.
16. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
17. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
Shareholders. No director, officer, employee, incorporator or shareholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
18. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
19. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures,
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the Company has caused CUSIP numbers to be printed on the Securities and has
directed the Trustee to use CUSIP numbers as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Xxxxx Healthcare Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
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ASSIGNMENT FORM
To assign this Security, fill in the form below: For value received
(i) or (we) hereby sell, assign and transfer this Security to
-------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and do hereby irrevocably constitute and appoint _____________________________
Attorney to transfer this Security on the books of the Company with full power
of substitution in the premises.
-------------------------------------------------------------------------------
Date:
-----------------
Your Signature:
-------------------------
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, check the following box:
/ / Section 3.07
(Change of Control)
If you want to have only part of the Security purchased by the Company
pursuant to Section 3.07 of the Indenture, state the amount you elect to have
purchased:
$
-------------------
Date:
---------------
Your Signature:
-------------------------
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee.*
__________
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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[FORM OF EXCHANGE NOTICE]
To: XXXXX HEALTHCARE CORPORATION
The undersigned registered owner of this Security hereby:
(i) irrevocably exercises the option to exchange this Security, or the portion
hereof below designated, for shares of common stock ($.25 par value per share)
of Vencor, Inc. or other securities, other property or cash in accordance with
the terms of the Indenture referred to in this Security and (ii) directs that
such shares, other securities, other property or cash deliverable upon the
exchange, together with any check in payment for fractional shares, and any
Security representing any unexchanged principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or other securities are to be delivered registered
in the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Principal Amount to be
Exchanged: (if less than all)
$
--------------------------------------
Dated
------------------- --------------------------------------
Signature
Notice: The signature to this Exchange Notice must correspond with the name as
it appears upon the face of the written Security in every particular, without
alteration, or enlargement or any change whatsoever.
Fill in for registration of shares if to be delivered, and of Securities if to
be issued, otherwise than to and in the name of the registered holder.
----------------------------------
Social Security or Other
Taxpayer Identifying Number
------------------------------
(Name)
------------------------------
(Street Address)
------------------------------
(City, State and Zip Code)
(Please print name and
address)
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