EXHIBIT 4.1
================================================================================
EVEREST HEALTHCARE SERVICES CORPORATION.
as Issuer,
and
THE SUBSIDIARY GUARANTORS
(defined herein)
and
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
as Trustee
------------------------
INDENTURE
Dated as of May 5, 1998
------------------------
up to $150,000,000
9-3/4% Senior Subordinated Notes due 2008
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(a)(5)................................................... 7.8; 7.10
(b)...................................................... 7.8; 7.10; 13.2
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)...................................................... 2.5
(b)...................................................... 13.3
(c)...................................................... 13.3
313(a)...................................................... 7.6
(b)(1)................................................... N.A.
(b)(2)................................................... 7.6
(c)...................................................... 7.6; 13.2
(d)...................................................... 7.6
314(a)...................................................... 4.6; 4.8; 13.2
(b)...................................................... N.A.
(c)(1)................................................... 13.4
(c)(2)................................................... 13.4
(c)(3)................................................... N.A.
(d)...................................................... N.A.
(e)...................................................... 13.5
(f)...................................................... N.A.
315(a)...................................................... 7.1(b)
(b)...................................................... 7.5; 13.2
(c)...................................................... 7.1(a)
(d)...................................................... 7.1(c)
(e)...................................................... 6.11
316(a)(last sentence)....................................... 2.9
(a)(1)(A)................................................ 6.5
(a)(1)(B)................................................ 6.4
(a)(2)................................................... N.A.
(b)...................................................... 6.7
(c)...................................................... 9.5
317(a)(1)................................................... 6.8
(a)(2)................................................... 6.9
(b)...................................................... 2.4
318(a)...................................................... 13.1
(c)...................................................... 13.1
___________________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions......................................................... 1
Section 1.2. Incorporation by Reference of TIA................................... 27
Section 1.3. Rules of Construction............................................... 28
ARTICLE II. THE NOTES
Section 2.1. Form and Dating..................................................... 28
Section 2.2. Execution and Authentication;
Aggregate Principal Amount......................................... 29
Section 2.3. Registrar and Paying Agent.......................................... 31
Section 2.4. Paying Agent To Hold Assets in Trust................................ 31
Section 2.5. Noteholder Lists.................................................... 32
Section 2.6. Transfer and Exchange............................................... 32
Section 2.7. Replacement Notes................................................... 33
Section 2.8. Outstanding Notes................................................... 33
Section 2.9. Treasury Notes...................................................... 34
Section 2.10. Temporary Notes..................................................... 34
Section 2.11. Cancellation........................................................ 34
Section 2.12. Defaulted Interest.................................................. 35
Section 2.13. CUSIP Number........................................................ 35
Section 2.14. Deposit of Moneys................................................... 35
Section 2.15. Book-Entry Provisions for Global Note............................... 35
Section 2.16. Special Transfer Provisions......................................... 37
ARTICLE III. REDEMPTION
Section 3.1. Notices to Trustee.................................................. 39
Section 3.2. Selection of Notes To Be Redeemed................................... 39
Section 3.3. Notice of Redemption................................................ 39
Section 3.4. Effect of Notice of Redemption...................................... 40
Section 3.5. Deposit of Redemption Price......................................... 41
Section 3.6. Notes Redeemed in Part.............................................. 41
ARTICLE IV. COVENANTS
Section 4.1. Payment of Notes.................................................... 41
Section 4.2. Maintenance of Office or Agency..................................... 42
Section 4.3. Corporate Existence................................................. 42
Section 4.4. Payment of Taxes and Other Claims................................... 42
Section 4.5. Business Activities................................................. 43
Section 4.6. Compliance Certificate; Notice of Default........................... 43
Section 4.7. Compliance with Laws................................................ 44
Section 4.8. Reports to Holders.................................................. 44
Section 4.9. Waiver of Stay, Extension or Usury Laws............................. 45
Section 4.10. Limitation on Restricted Payments................................... 45
Section 4.11. Limitation on Transactions with Affiliates.......................... 48
(i)
Section 4.12. Limitation on Indebtedness.......................................... 49
Section 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries............................................. 52
Section 4.14. Prohibition on Incurrence of Layered Indebtedness................... 53
Section 4.15. Limitation on Change of Control..................................... 53
Section 4.16. Limitation on Asset Sales........................................... 55
Section 4.17. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries............................................ 59
Section 4.18. Limitation on Liens................................................. 60
Section 4.19. Payments for Consent................................................ 60
Section 4.20. Additional Guarantees............................................... 61
Section 4.21. Sale and Leaseback Transactions..................................... 61
Section 4.22. Limitation on Restricted and Unrestricted Subsidiaries.............. 62
Section 4.23. Sales of Accounts Receivable........................................ 63
ARTICLE V. SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, Etc......................................... 64
Section 5.2. Successor Corporation Substituted................................... 66
ARTICLE VI. DEFAULT AND REMEDIES
Section 6.1. Events of Default................................................... 66
Section 6.2. Acceleration........................................................ 68
Section 6.3. Other Remedies...................................................... 69
Section 6.4. Waiver of Past Defaults............................................. 69
Section 6.5. Control by Majority................................................. 69
Section 6.6. Limitation on Suits................................................. 70
Section 6.7. Rights of Holders To Receive Payment................................ 70
Section 6.8. Collection Suit by Trustee.......................................... 71
Section 6.9. Trustee May File Proofs of Claim.................................... 71
Section 6.10. Priorities.......................................................... 71
Section 6.11. Undertaking for Costs............................................... 72
Section 6.12. Restoration of Rights and Remedies.................................. 72
ARTICLE VII. TRUSTEE
Section 7.1. Duties of Trustee................................................... 73
Section 7.2. Rights of Trustee................................................... 74
Section 7.3. Individual Rights of Trustee........................................ 75
Section 7.4. Trustee's Disclaimer................................................ 75
Section 7.5. Notice of Default................................................... 75
Section 7.6. Reports by Trustee to Holders....................................... 76
Section 7.7. Compensation and Indemnity.......................................... 76
Section 7.8. Replacement of Trustee.............................................. 77
Section 7.9. Successor Trustee by Merger, Etc.................................... 78
Section 7.10. Eligibility; Disqualification....................................... 78
Section 7.11. Preferential Collection of Claims Against Company................... 79
ARTICLE VIII. DISCHARGE OF INDENTURE; DEFEASANCE
(ii)
Section 8.1. Termination of the Company's Obligations........................... 79
Section 8.2. Legal Defeasance and Covenant Defeasance........................... 80
Section 8.3. Conditions to Legal Defeasance or Covenant
Defeasance........................................................ 82
Section 8.4. Application of Trust Money......................................... 83
Section 8.5. Repayment to the Company or the Subsidiary
Guarantors........................................................ 84
Section 8.6. Satisfaction and Discharge......................................... 84
Section 8.7. Reinstatement...................................................... 85
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders......................................... 85
Section 9.2. With Consent of Holders............................................ 86
Section 9.3. Effect on Senior Indebtedness...................................... 87
Section 9.4. Compliance with TIA................................................ 87
Section 9.5. Revocation and Effect of Consents.................................. 87
Section 9.6. Notation on or Exchange of Notes................................... 88
Section 9.7. Trustee To Sign Amendments, Etc.................................... 89
ARTICLE X. SUBORDINATION
Section 10.1. Notes Subordinated to Senior Indebtedness.......................... 89
Section 10.2. No Payment on Notes in Certain Circumstances....................... 89
Section 10.3. Payment Over of Proceeds Upon Dissolution, Etc..................... 91
Section 10.4. Payments May Be Paid Prior to Dissolution.......................... 92
Section 10.5. Subrogation........................................................ 92
Section 10.6. Obligations of the Company Unconditional........................... 93
Section 10.7. Notice to Trustee.................................................. 93
Section 10.8. Reliance on Judicial Order or Certificate of
Liquidating Agent.................................................. 94
Section 10.9. Trustee's Relation to Senior Indebtedness.......................... 94
Section 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Indebtedness........ 95
Section 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes............................................ 95
Section 10.12. This Article X Not To Prevent Events of Default.................... 96
Section 10.13. Trustee's Compensation Not Prejudiced.............................. 96
ARTICLE XI. GUARANTEES
Section 11.1. Unconditional Guarantee............................................ 96
Section 11.2. Severability....................................................... 97
Section 11.3. Release of a Subsidiary Guarantor.................................. 98
Section 11.4. Limitation of Subsidiary Guarantor's Liability..................... 98
Section 11.5. Subsidiary Guarantors May Consolidate, Etc., on Certain Terms...... 99
Section 11.6. Contribution....................................................... 99
Section 11.7. Waiver of Subrogation.............................................. 100
Section 11.8. Execution of Guarantee............................................. 100
(iii)
ARTICLE XII. SUBORDINATION OF GUARANTEES
Section 12.1. Subordination of Guarantee......................................... 101
Section 12.2. No Payment on Guarantees in Certain Circumstances.................. 101
Section 12.3. Payment Over of Proceeds Upon Dissolution, Etc..................... 103
Section 12.4. Payments May Be Paid Prior to Dissolution.......................... 104
Section 12.5. Subrogation........................................................ 105
Section 12.6. Obligations of Each Subsidiary Guarantor Unconditional............. 105
Section 12.7. Notice to Trustee.................................................. 106
Section 12.8. Reliance on Judicial Order or Certificate of Liquidating Agent..... 106
Section 12.9. Trustee's Relation to Guarantor Senior Indebtedness................ 107
Section 12.10. Subordination Rights Not Impaired by Acts or Omissions of a
Subsidiary Guarantor or Holders of Guarantor Senior Indebtedness.. 107
Section 12.11. Noteholders Authorize Trustee To Effectuate Subordination of
Guarantees........................................................ 108
Section 12.12. This Article XII Not To Prevent Events of Default.................. 109
Section 12.13. Trustee's Compensation Not Prejudiced.............................. 109
ARTICLE XIII. MISCELLANEOUS
Section 13.1. TIA Controls....................................................... 109
Section 13.2. Notices............................................................ 109
Section 13.3. Communications by Holders with Other Holders....................... 110
Section 13.4. Certificate and Opinion as to Conditions Precedent................. 110
Section 13.5. Statements Required in Certificate or Opinion...................... 111
Section 13.6. Rules by Trustee, Paying Agent, Registrar.......................... 111
Section 13.7. Legal Holidays..................................................... 112
Section 13.8. Governing Law...................................................... 112
Section 13.9. No Adverse Interpretation of Other Agreements...................... 112
Section 13.10. No Recourse Against Others......................................... 112
Section 13.11. Successors......................................................... 112
Section 13.12. Duplicate Originals................................................ 112
Section 13.13. Severability....................................................... 113
Signatures................................................................. 113
Exhibit A(1) - Form of Initial Note with Guarantee.........................A.1-1
Exhibit A(2) - Form of Exchange Note with Guarantee........................A.2-1
Exhibit B - Form oF Legend for Global Notes.............................. B-1
Exhibit C - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors.................... C-1
(iv)
Exhibit D - Form of CertificatE To Be Delivered
in Connection with Transfers
Pursuant to Regulation S..................................... D-1
Exhibit E - Form of Supplemental Indenture............................... E-1
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
(v)
INDENTURE
INDENTURE, dated as of May 5, 1998, by and among Everest Healthcare
Services Corporation, a Delaware corporation (the "Company"), the Subsidiary
-------
Guarantors (as hereinafter defined) and American National Bank and Trust Company
of Chicago, as Trustee (the "Trustee").
-------
The Company has duly authorized the creation of an issue of 9-3/4%
Senior Subordinated Notes due 2008 and, to provide therefor, the Company has
duly authorized the execution and delivery of this Indenture. All things
necessary to make the Notes, when duly issued and executed, by the Company and
authenticated and delivered hereunder, the valid obligations of the Company, and
to make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
-----------
"Acceleration Notice" has the meaning provided in Section 6.2.
-------------------
"Accounts Receivable Subsidiary" means a newly created, Unrestricted
------------------------------
Subsidiary of the Company (i) which is formed solely for the purpose of, and
which engages in no activities other than activities in connection with,
financing accounts receivable of the Company and/or its Restricted Subsidiaries,
(ii) which is designated by the Board of Directors of the Company as an Accounts
Receivable Subsidiary pursuant to a Board Resolution set forth in an Officers'
Certificate and delivered to the Trustee, (iii) that has total assets at the
time of such creation and designation with a book value of $10,000 or less, (iv)
which has no Indebtedness other than Non-Recourse Debt, and (v) with which
neither the Company nor any Restricted Subsidiary of the Company has any
contract, agreement, arrangement or understanding other than contracts,
agreements, arrangements and understandings entered into in the ordinary course
of business in connection with sales of accounts receivable in accordance with
Section 4.23 and fees payable in the ordinary course of business in connection
with servicing accounts receivable.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
---------------------
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, merger or consolidation.
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the SEC promulgated thereunder.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
-------------------
the lesser of the amount by which (x) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee of such Subsidiary Guarantor at such date and
(y) the present fair salable value of the assets of such Subsidiary Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Subsidiary Guarantor on its debts (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date and after
giving effect to any collection from any Subsidiary of such Subsidiary Guarantor
in respect of the obligations of such Subsidiary under the Guarantee), excluding
debt in respect of the Guarantee, as they become absolute and matured.
"Affiliate" means, with respect to any specified Person, any other
---------
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, that beneficial ownership of 10% or more of the voting Capital Stock
of a Person shall be deemed to be control. The terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
---------------------
"Agent" means any Registrar, Paying Agent or co-Registrar.
-----
"Article 28 Company" means an entity organized and operated for the
------------------
primary purpose of conducting a Permitted Business and subject to a federal or
state law or regulation that: (i) limits or restricts the types of individuals
or entities that are permitted to hold an ownership or investment interest in
such an entity; and (ii) prohibits the Company and its Subsidiaries from being
able to directly hold an ownership or investment interest in such an entity.
"Asset Acquisition" means (a) an Investment by the
-----------------
-2-
Company or any Restricted Subsidiary of the Company in any other Person pursuant
to which such Person (x) shall become a Restricted Subsidiary of the Company, or
(y) shall be merged with or into the Company or any Restricted Subsidiary of the
Company, or (b) the acquisition by the Company or any Restricted Subsidiary of
the Company of the assets of any Person (other than a Subsidiary of the Company)
which constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
----------
transfer, lease, assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Subsidiary of the Company; or (b) any
other property or assets of the Company or any Restricted Subsidiary of the
Company; provided, however, that Asset Sales shall not include (i) a transaction
or series of related transactions for which the Company or its Subsidiaries
receive aggregate consideration of less than $1,000,000; (ii) sales of accounts
receivable to the Accounts Receivable Subsidiary in accordance with Section 4.23
other than the Initial Sale; and (iii) the sale, lease, conveyance, disposition
or other transfer (w) of the Capital Stock of an Unrestricted Subsidiary, (x) of
all or substantially all of the assets of the Company as permitted under Section
5.1, (y) involving only cash, Cash Equivalents or inventory in the ordinary
course of business or obsolete equipment in the ordinary course of business
consistent with past practices of the Company, or (z) involving only the lease
or sublease of any assets in the ordinary course of business.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
-----------------
means at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Authenticating Agent" has the meaning provided in Section 2.2.
--------------------
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
--------------
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.2(a).
---------------
"Board of Directors" means, as to any Person, the board
------------------
-3-
of directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
------------
"Capital Stock" means (i) in the case of a corporation, corporate
-------------
stock, (ii) in the case of an association or other entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any 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.
"Capitalized Lease Obligation" means, as to any Person, the
----------------------------
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
----------------
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from both Standard & Poor's Rating Services ("S&P") and Xxxxx'x Investors
---
Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one year
-------
from the date of creation thereof and, at the time of acquisition, having the
highest ratings obtainable from both S&P and Moody's; (iv) certificates of
deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above, entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest
-4-
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Change of Control" means the occurrence of one or more of the
-----------------
following events: (i) any sale, lease, exchange or other transfer (in one
transaction 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 of related Persons for purposes of Section 13(d) of the Exchange Act (a
"Group") together with any Affiliates thereof (whether or not otherwise in
compliance with the provisions of this Indenture); (ii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) the acquisition of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
in one or more transactions by any Person or Group other than a Person who is a
stockholder of the Company as of the Issue Date or Group comprised solely of
such Persons (the "Control Group") of either more than 25% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of
the Company or more than 25% of the aggregate issued and outstanding Common
Stock of the Company and such beneficial ownership percentage is greater than
the beneficial ownership of the Control Group; (iv) Home Dialysis of America,
Inc. or West Suburban Kidney Center, S.C. cease to be a Wholly Owned Restricted
Subsidiary of the Company, or (v) the replacement of a majority of the Board of
Directors of the Company over a two-year period from the directors who
constituted the Board of Directors of the Company at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of the Company then still in office who
either were members of such Board of Directors at the beginning of such period
or whose election as a member of such Board of Directors was previously so
approved.
"Change of Control Date" has the meaning provided in Section 4.15.
----------------------
"Change of Control Offer" has the meaning provided in Section 4.15.
-----------------------
"Change of Control Payment Date" has the meaning provided in Section
------------------------------
4.15.
"Common Stock" of any Person means any and all shares, interests or
------------
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
-5-
"Company" means Everest Healthcare Services Corporation, a Delaware
-------
corporation and its successors that become a party to this Indenture in
accordance with its terms.
"Consolidated EBITDA" means, with respect to any Person, for any
-------------------
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business or other transactions the
effect of which has been excluded from Consolidated Net Income), (B)
Consolidated Interest Expense and (C) Consolidated Non-cash Charges less any
non-cash items increasing Consolidated Net Income for such period, all as
determined on a consolidated basis for such Person and its Subsidiaries in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
----------------------------------------
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
-------------------
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
----------------
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital purposes
pursuant to working capital or revolving credit facilities, occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such incurrence or
repayment, as the case may be (and the application of the proceeds thereof), had
occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Subsidiaries (including any Person who becomes a Subsidiary as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA (provided that
such Consolidated EBITDA shall be included only to the extent includable
pursuant to the definition of "Consolidated Net Income") attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale during the
Four Quarter Period) occurring during the Four Quarter Period or at any time
-6-
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Acquired Indebtedness) had
occurred on the first day of the Four Quarter Period. If such Person or any of
its Subsidiaries directly or indirectly guarantees Indebtedness of a third
Person, the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or any Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period; and (3) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
--------------------------
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock or dividends to the extent payable to
the Company or its Restricted Subsidiaries) paid, accrued or scheduled to be
paid or accrued during such period (other than in the case of Preferred Stock of
such Person and its Restricted Subsidiaries for which the dividends are tax
deductible for federal income tax purposes, which shall be included in
Consolidated Fixed Charges without being multiplied by the fraction in (y)) and
(y) a fraction, the numerator of which is one and the denominator of which is
one minus the then current effective consolidated federal, state and local tax
rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for
-----------------------------
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, whether paid or
accrued, including without limitation, (a) any amortization of debt discount and
amortization or write-off of deferred financing
-7-
costs, (b) the net costs under Interest Swap Obligations, (c) all capitalized
interest and (d) the interest portion of any deferred payment obligation,
including with respect to Attributable Debt; (ii) the aggregate dividend
payments of such Person and its Restricted Subsidiaries for such period with
respect to Disqualified Capital Stock; and (iii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
-----------------------
period, the aggregate net income (or loss) of such Person and its Subsidiaries
for such period on a consolidated basis (before Preferred Stock (other than
Disqualified Stock) dividend requirements), determined in accordance with GAAP;
provided that there shall be excluded therefrom (a) after-tax gains from Asset
Sales or abandonments of reserves relating thereto, (b) after-tax items
classified as extraordinary or nonrecurring gains or losses, (c) the net income
of any Person acquired in a "pooling of interests" transaction accrued prior to
the date it becomes a Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Subsidiary of the referent Person,
(d) the net income (but not loss) of any Restricted Subsidiary of the referent
Person to the extent that the declaration of dividends or similar distributions
by that Restricted Subsidiary of that income is restricted (or subject to tax)
by a contract, operation of law or otherwise, (e) the net income of any Person,
other than a Restricted Subsidiary of the referent Person, except to the extent
of cash dividends or distributions paid to the referent Person or to a
Restricted Subsidiary of the referent Person by such Person (subject to the
limitation in clause (d)), (f) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve reduced
Consolidated Net Income accrued at any time following the Issue Date, (g) income
or loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued), (h) in the case of a successor to the referent
Person by consolidation or merger or as a transferee of the referent Person's
assets, any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets, (i) any gain realized in connection with the
disposition of any securities other than Cash Equivalents by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries and (j) all gains or losses from
the cumulative effect of any change in accounting principles.
"Consolidated Net Worth" means, (A) with respect to any partnership,
----------------------
the common and preferred partnership equity of such partnership and its
consolidated subsidiaries, as determined on a consolidated basis in accordance
with GAAP, and (B) with respect
-8-
to any other Person as of any date, the sum of (i) the consolidated equity of
the common equityholders 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 equity (other than
Disqualified Capital Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of such preferred
equity, less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the date of this Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, plus (y) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Consolidated Non-cash Charges" means, with respect to any Person, for
-----------------------------
any period, the aggregate Consolidated Pooling Expenses, depreciation,
amortization and other non-cash expenses of such Person and its Subsidiaries
reducing Consolidated Net Income of such Person for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve relating to possible cash charges or expenditures for
any future or past period).
"Consolidated Pooling Expenses" of any Person means for any period,
-----------------------------
with respect to such Person and its Subsidiaries on a consolidated basis, the
transaction and the transaction-related expenses for such period in connection
with a pooling of interests transaction, determined in accordance with GAAP, but
only to the extent such expenses would have been capitalized, in accordance with
GAAP, if such transaction had been a purchase transaction.
"Contributions" means any loans, cash advances, capital contributions,
-------------
investments or other transfers of assets for either (i) Capital Stock or (ii)
less than fair value by the Company or any of its Restricted Subsidiaries to any
Subsidiary or other Affiliate of the Company other than to a Subsidiary
Guarantor.
"Covenant Defeasance" has the meaning provided in Section 8.2(c).
-------------------
"Credit Facility" means the Amended and Restated Credit Agreement,
---------------
dated as of May 15, 1997, as amended, among the Company, Xxxxxx Trust and
Savings Bank, individually and as Agent, and the lenders which are or become
parties thereto,
-9-
together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder; provided that such
increase in borrowings is permitted by Section 4.12) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency
------------------
swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
-------
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Default Notice" has the meaning provided in Section 10.2(a).
--------------
"Depository" means The Depository Trust Company, its nominees and
----------
successors.
"Depository Participants" has the meaning provided in Section 2.15.
-----------------------
"Designated Senior Indebtedness" means (i) Indebtedness under or in
------------------------------
respect of the Credit Facility and (ii) any other Indebtedness constituting
Senior Indebtedness which, at the time of determination, has an aggregate
principal amount of at least $35,000,000 and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by the Company.
"Disqualified Capital Stock" means, with respect to any person, any
--------------------------
Capital Stock which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature.
"Eligible Joint Venture" means any Person which meets all of the
----------------------
following criteria: (a) no Affiliate of the Company or
-10-
a Restricted Subsidiary (other than a Restricted Subsidiary of the Company) has
an investment in such Person, (b) such Person is engaged in a Permitted
Business, (c) the Company and/or any of its Restricted Subsidiaries at all times
(i) controls, by voting power, board or management committee membership, or
through the provisions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or management agreement or
otherwise, the business operations of such Person, and (ii) owns at least 20% of
the total outstanding Capital Stock of such Person entitled to participate in
distributions in respect of the earnings, sale or liquidation of such Person,
(d) no more than $100,000 principal amount of the Indebtedness of such Person
outstanding at any one time is not Non-Recourse Debt, and (e) a default or event
of default under the Indebtedness of such Person would not result in a default
or event of default under any Indebtedness of the Company or its Restricted
Subsidiaries, except for Indebtedness permitted pursuant to (d).
"Event of Default" has the meaning provided in Section 6.1.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute or statutes thereto.
"Exchange Notes" means the 9-3/4% Senior Subordinated Notes due 2008
--------------
to be issued in exchange for the Initial Notes pursuant to the Registration
Rights Agreement or, with respect to Initial Notes issued under this Indenture
subsequent to the Issue Date pursuant to Section 2.2, a registration rights
agreement substantially identical to the Registration Rights Agreement.
"Exchange Offer" has the meaning assigned to such term in the
--------------
Registration Rights Agreement, dated as of May 5, 1998, by and among the
Company, the Subsidiary Guarantors, and BT Alex. Xxxxx Incorporated, as initial
purchaser (the "Registration Rights Agreement").
-----------------------------
"fair market value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"First Call Date" means May 1, 2003.
---------------
"Foreign Subsidiary" means any Subsidiary of the Company either (a)
------------------
which is organized outside of the United States of America, (b) whose principal
activities are conducted outside of the United States of America or (c) whose
only
-11-
material assets are Capital Stock in Subsidiaries which are Foreign
Subsidiaries.
"Funding Guarantor" has the meaning provided in Section 11.6.
-----------------
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Note" has the meaning provided in Section 2.1.
-----------
"Guarantee" means the Guarantees executed and delivered by any
---------
Subsidiary Guarantor with respect to the Company's obligations under this
Indenture and the Notes.
"Guarantor Blockage Period" has the meaning provided in Section
-------------------------
12.2(a).
"Guarantor Default Notice" has the meaning provided in Section
------------------------
12.2(a).
"Guarantor Designated Senior Indebtedness", with respect to any
----------------------------------------
Subsidiary Guarantor, means (i) if such Subsidiary Guarantor is party to the
Credit Facility, Indebtedness under or in respect of the Credit Facility and
(ii) any other Indebtedness constituting Guarantor Senior Indebtedness of such
Subsidiary Guarantor which, at the time of determination, has an aggregate
principal amount of at least $35,000,000 (including the principal amount of
Obligations of the Company and its Subsidiaries under such Indebtedness) and is
specifically designated in the instrument evidencing such Guarantor Senior
Indebtedness as "Designated Senior Indebtedness" or "Guarantor Designated Senior
Indebtedness" by the Company or any of its Subsidiaries.
"Guarantor Senior Indebtedness" means, with respect to any Subsidiary
-----------------------------
Guarantor, all Indebtedness and other Obligations specified below payable
directly or indirectly by such Subsidiary Guarantor (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), whether outstanding on the
Issue Date or thereafter created, incurred or assumed, by such Subsidiary
Guarantor: (i) the principal of, interest on and all other Obligations related
to the Credit Facility (including without limitation all loans, letters of
credit and other extensions of credit under the Credit Facility, and all
expenses, fees, reimbursements, indemnities and other amounts owing pursuant to
the Credit Facility); (ii) amounts
-12-
payable in respect of any Interest Swap Obligations and Currency Agreements;
(iii) all Indebtedness not prohibited by Section 4.12 that is not expressly pari
passu with or subordinated to the Guarantee of such Subsidiary Guarantor; and
(iv) all permitted Refinancings thereof. Notwithstanding the foregoing,
"Guarantor Senior Indebtedness" shall not include (a) any Indebtedness of the
Subsidiary Guarantor to the Company or a Subsidiary of the Company, (b)
Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer
or employee of the Company or any Subsidiary of the Company (including, without
limitation, amounts owed for compensation), (c) Indebtedness to trade creditors
and other amounts incurred in connection with obtaining goods, materials or
services, (d) Indebtedness represented by Disqualified Capital Stock, (e) any
liability for federal, state, local or other taxes owed or owing by the
Subsidiary Guarantor, (f) Indebtedness incurred in violation of Section 4.12,
(g) Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to the
Subsidiary Guarantor and (h) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Subsidiary
Guarantor.
"Holder" or "Noteholder" means the person in whose name a Note is
------ ----------
registered on the Registrar's books.
"incur" has the meaning provided in Section 4.12.
-----
"Indebtedness" means with respect to any Person, without duplication,
------------
(i) all indebtedness of such Person, whether or not contingent, for borrowed
money, (ii) all indebtedness of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all Capitalized Lease Obligations of
such Person, (iv) all indebtedness or other obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all Obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business that are not in default or overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all indebtedness for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all indebtedness of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all indebtedness under Currency Agreements and Interest Swap
Agreements of such Person and (ix) all Disqualified Capital Stock issued by such
Person with the amount of Indebtedness represented by such
-13-
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock. The amount of any Indebtedness (other than
Disqualified Capital Stock) outstanding as of any date shall be (i) the accreted
value thereof, to the extent such Indebtedness does not require current payments
of interest, (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness, (iii) in the case of Currency Agreements and Interest Swap
Agreements, the amount that would appear on the consolidated balance sheet of
the Person in accordance with GAAP and (iv) in the case of any guarantee or
other contingent obligation in respect of Indebtedness of any other Person shall
be deemed to be equal to the maximum amount of such Indebtedness, unless the
liability is limited by the terms of such guarantee or contingent obligation, in
which case the amount of such guarantee or other obligation shall be deemed to
equal the maximum amount of such liability.
"Independent Financial Advisor" means a firm (i) which does not, and
-----------------------------
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Initial Notes" means, collectively, (i) the 9-3/4% Senior
-------------
Subordinated Notes due 2008 of the Company issued on the Issue Date and (ii) one
or more series of 9-3/4% Senior Subordinated Notes due 2008 that are issued
under this Indenture subsequent to the Issue Date pursuant to Section 2.2, in
each case for so long as such securities constitute Restricted Securities.
"Initial Sale" means the first transaction in which accounts
------------
receivable are sold by the Company and/or its Restricted Subsidiaries to an
Accounts Receivable Subsidiary.
"Insolvency or Liquidation Proceedings" means with
-------------------------------------
-14-
respect to any Person (i) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding relative to such Person or to the creditors of such Person, as such,
or to the assets of such Person, or (ii) any liquidation, dissolution,
reorganization or winding up of such Person, whether voluntary or involuntary,
or (iii) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of such Person.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" when used with respect to any Note, means the
---------------------
stated maturity of an installment of interest specified in such Note.
"Interest Swap Obligations" means the obligations of any Person
-------------------------
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect
----------
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other Person (including a Subsidiary of the referent Person).
"Investment" shall exclude extensions of trade credit by the Company and its
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Subsidiary, as the case may be. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Capital Stock of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Capital Stock of such Subsidiary not sold or disposed.
For the purposes of Section 4.10, the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment,
-15-
reduced by the payment of dividends or distributions in connection with such
Investment or any other amounts received in respect of such Investment; provided
that no such payment of dividends or distributions or receipt of any such other
amounts shall reduce the amount of any Investment if such payment of dividends
or distributions or receipt of any such amounts would be included in
Consolidated Net Income.
"Issue Date" means the date of original issuance of the Notes.
----------
"Legal Defeasance" has the meaning provided in Section 8.2(b).
----------------
"Legal Holiday" has the meaning provided in Section 13.7.
-------------
"Lien" means any lien, mortgage, deed of trust, pledge, security
----
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means May 1, 2008.
-------------
"Net Cash Proceeds" means, with respect to any Asset Sale, the
-----------------
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) income taxes paid or payable
after taking into account any reduction in consolidated income tax liability due
to available tax credits or deductions and any tax sharing arrangements, (c)
repayment of Indebtedness that is required to be repaid in connection with such
Asset Sale, (d) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, (e) proceeds
required to be placed in escrow, provided, that upon the release of any such
proceeds from such escrow to the Company or a Subsidiary of the Company such
released proceeds shall constitute "Net Cash Proceeds" and (f) in the case of a
sale by a Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary, the minority interests' proportionate share of such Net Cash
Proceeds.
-16-
"Net Proceeds Offer" has the meaning provided in Section 4.16.
------------------
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
-----------------
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness, but excluding, in the case of (x) the Accounts
Receivable Subsidiary, warranty claims, indemnity rights and rights of set-off
with respect to accounts receivable that are sold to such Accounts Receivable
Subsidiary, and (y) any Eligible Joint Venture, any amounts loaned by the
Company or any such Restricted Subsidiary to such Eligible Joint Venture for
working capital purposes); (b) is directly or indirectly liable (as a guarantor
or otherwise, except as set forth in (a)); or (c) constitutes the lender (except
as set forth in (a)); (ii) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Company or its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; and (iii) as to which
the lenders, except for lenders under Indebtedness in existence on the Issue
Date or instruments governing Acquired Indebtedness (a) have acknowledged that
they do not have recourse to the holder of the Capital Stock of the debtor or
(b) have been notified in writing that they will not have any recourse to the
stock or assets of either the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person other than a "U.S. Person" (as
---------------
defined in Regulation S under the Securities Act).
"Notes" means, collectively, the Initial Notes, the Private Exchange
-----
Notes, if any, and the Unrestricted Notes, treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium, interest,
-----------
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any person, the Chairman of the
-------
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such
-17-
Person and otherwise complying with the requirements of Sections 13.4 and 13.5,
as they relate to the making of an Officers' Certificate.
"Offshore Physical Notes" has the meaning provided in Section 2.1.
-----------------------
"Opinion of Counsel" means a written opinion from legal counsel, who
------------------
may be counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 13.4 and 13.5, as they relate to the
giving of an Opinion of Counsel.
"Pari Passu Debt" means any Indebtedness of the Company or its
---------------
Restricted Subsidiaries which, by its terms, is pari passu in right of payment
to the Notes or the Guarantees.
"Paying Agent" has the meaning provided in Section 2.3.
------------
"Payment in Full" (together with any correlative phrases, e.g., "paid
---------------
in full" and "pay in full") means (i) with respect to any Senior Indebtedness
other than Senior Indebtedness under or in respect of the Credit Facility,
payment in full thereof or due provision for payment thereof (x) in accordance
with the terms of the agreement or instrument pursuant to which such Senior
Indebtedness was issued or is governed or (y) otherwise to the reasonable
satisfaction of the holders of such Senior Indebtedness, which shall include, in
any Insolvency or Liquidation Proceeding, approval by such holders individually
or as a class, of the provision for payment thereof, and (ii) with respect to
Senior Indebtedness under or in respect of the Credit Facility, payment in full
thereof in cash or Cash Equivalents.
"Permitted Business" means the business of the Company and its
------------------
Subsidiaries as existing on the Issue Date or such other businesses as the Board
of Directors of the Company determines are reasonably related thereto as
evidenced by a Board Resolution.
"Permitted Indebtedness" has the meaning provided in Section 4.12(b).
----------------------
"Permitted Insolvency Payments" means (i) securities distributed to
-----------------------------
the Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to
a plan of reorganization consented to by each class of the Senior Indebtedness,
but only if all of the terms and conditions of such securities (including,
without limitation, term, tenor, interest, amortization, subordination,
standstills, covenants and defaults), are at least as favorable (and provide the
same relative benefits) to the holders of Senior Indebtedness and to the holders
of any security distributed in such Insolvency or Liquidation Proceeding on
account of any such Senior Indebtedness as the terms and conditions of the Notes
and this Indenture are, and provide to
-18-
the holders of Senior Indebtedness, and (ii) payments from a trust established
pursuant to Article VIII, provided that payment into such trust was not made
either (x) within 90 days prior to the commencement of an Insolvency or
Liquidation Proceeding, or (y) during any period in which payment on the Notes
is blocked pursuant to Article X.
"Permitted Investments" means (i) Investments by the Company or any
---------------------
Subsidiary of the Company in any Person engaged in a Permitted Business that is
or will become immediately after such Investment a Wholly Owned Restricted
Subsidiary of the Company other than a Foreign Subsidiary or that will merge or
consolidate into the Company or a Wholly Owned Restricted Subsidiary of the
Company other than a Foreign Subsidiary; (ii) Investments in the Company by any
Restricted Subsidiary of the Company; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated to the Company's obligations under
the Notes and this Indenture, pursuant to a written agreement and to the same
extent that the Notes are subordinated to Senior Indebtedness; (iii) investments
in cash and Cash Equivalents; (iv) loans and advances to employees and officers
of the Company and its Subsidiaries in the ordinary course of business for bona
fide business purposes not in excess of $1,000,000 at any one time outstanding;
(v) Currency Agreements and Interest Swap Obligations entered into in the
ordinary course of the Company's or its Subsidiaries' businesses and otherwise
in compliance with this Indenture; (vi) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or any of its Subsidiaries as a
result of consideration received in connection with an Asset Sale made in
compliance with Section 4.16; (viii) Investments in an Accounts Receivable
Subsidiary received in consideration of sales of accounts receivable in
accordance with Section 4.23; (ix) Investments by the Company or any Restricted
Subsidiary in a Restricted Subsidiary or an Eligible Joint Venture in an amount
at any one time outstanding not to exceed $5,000,000 in the aggregate, so long
as that after giving effect to any such Investment, no Default or Event of
Default shall have occurred, and the Consolidated Fixed Charge Coverage Ratio of
the Company is greater than 2.5 to 1.0; and (x) other Investments in any Person
having an aggregate fair market value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (x) that are at
the time outstanding, not to exceed $10,000,000, so long as that after giving
effect to any such Investment, no Default or Event of Default shall have
occurred.
"Permitted Liens" means the following types of Liens:
---------------
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) being
-19-
contested in good faith by appropriate proceedings and as to which the
Company or its Restricted Subsidiaries, as the case may be, shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(iv) Liens securing letters of credit issued in the ordinary course
of business consistent with past practice in connection with the items
referred to in clause (iii) or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(v) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(vi) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(vii) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(viii) purchase money Liens to finance property or assets of the
Company or any Subsidiary of the Company acquired in the ordinary course of
business; provided, however, that (A) the related purchase money
Indebtedness shall not exceed the cost of such property or assets and shall
not be secured by any property or assets of the Company or any Subsidiary
of the Company, other than the property and assets so acquired and (B) the
Lien securing such Indebtedness shall be created within 90 days of such
acquisition;
-20-
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(x) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xi) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(xii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.12; provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company, and
were not granted in connection with, or in anticipation of, the incurrence
of such Acquired Indebtedness by the Company or a Subsidiary of the
Company, and (B) such Liens do not extend to or cover any property or
assets of the Company or of any of its Subsidiaries, other than the
property or assets that secured the Acquired Indebtedness prior to the time
such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company, and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Subsidiary of
the Company;
(xv) Liens to secure Attributable Debt that is permitted to be
incurred pursuant to Section 4.21; provided that any such Liens shall not
extend to or cover any assets of the Company or any Restricted Subsidiary,
other than the assets which are the subject of the Sale and Leaseback
Transaction in which the Attributable Debt is incurred;
(xvi) leases or subleases granted to others not interfering in any
material respect with the business of the Company or any of its Restricted
Subsidiaries;
-21-
(xvii) any interest or title of a lessor in the property subject to
any lease, whether characterized as capitalized or operating other than any
such interest or title resulting from or arising out of a default by the
Company or any of its Restricted Subsidiaries of its obligations under such
lease;
(xviii) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of personal property
that are otherwise permitted under this Indenture and under which the
Company or any of its Restricted Subsidiaries is lessee;
(xix) Liens arising by virtue of any statutory or common law
provisions relating to banker's Liens, rights of setoff or similar rights
as to deposit accounts or other funds maintained with a creditor depositary
institution; and
(xx) Liens in favor of the Trustee and any substantially equivalent
Lien granted to any trustee or similar institution under any indenture
governing Indebtedness permitted to be incurred or outstanding under this
Indenture.
"Person" means an individual, partnership, corporation, limited
------
liability company, unincorporated organization, trust or joint venture, a
governmental agency or political subdivision thereof or other entity.
"Physical Notes" has the meaning provided in Section 2.1.
--------------
"Preferred Stock" of any Person means any Capital Stock of such Person
---------------
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the
---------
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Exchange Notes" has the meaning set forth in the Registration
----------------------
Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
------------------------
Initial Notes in the form set forth in Exhibit A(l).
------------
"Proceeds Purchase Date" has the meaning provided in Section 4.16.
----------------------
"pro forma" means, with respect to any calculation made or required to
---------
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under
-22-
the Securities Act, as determined by the Board of Directors of the Company in
consultation with its independent public accountants.
"Property" of any person means all types of real, personal, tangible,
--------
intangible or mixed property owned by such person whether or not included in the
most recent consolidated balance sheet of such person and its Subsidiaries under
GAAP.
"Public Equity Offering" means an underwritten equity offering,
----------------------
pursuant to an effective registration statement under the Act, of the Qualified
Capital Stock of the Company, or of any entity of which the Company is a direct
or indirect subsidiary, to the extent the proceeds thereof shall have been
received or contributed to the Company.
"Qualified Capital Stock" means any Capital Stock that is not
-----------------------
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
----------------------------- ---
specified in Rule 144A under the Securities Act.
"Record Date" means, with respect to any Note, any of the Record Dates
-----------
specified in such Note, whether or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Reference Date" has the meaning provided in Section 4.10.
--------------
"Refinance" means, in respect of any security or Indebtedness, to
---------
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
------------------------
Subsidiary of the Company of Indebtedness incurred in accordance with Section
4.12 (other than pursuant to clause (iii), (v), (vi), (vii), (x), (xi), (xii) or
(xiii) of Section 4.12(b)), in each case that does not (1) result in an increase
in the aggregate principal amount of Indebtedness of such Person as of the date
of such proposed Refinancing (plus the amount of any premium or penalty required
to be paid under the terms of the instrument governing such Indebtedness and
plus the amount of reasonable expenses incurred by the Company in connection
with
-23-
such Refinancing) or (2) create Indebtedness with (A) a Weighted Average
Life to Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; provided that (x) if such
Indebtedness being Refinanced is solely Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Notes or any
Guarantee, then such Refinancing Indebtedness shall have a final maturity date
later than 91 days after the final maturity date of the Notes and shall be
subordinate to the Notes at least to the same extent and in the same manner as
the Indebtedness being Refinanced.
"Registrar" has the meaning provided in Section 2.3.
---------
"Registration Rights Agreement" has the meaning provided in the
-----------------------------
definition of "Exchange Offer."
"Regulation S" means Regulation S under the Act.
------------
"Representative" means the indenture trustee or other trustee, agent
--------------
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Indebtedness in respect of any Designated
Senior Indebtedness.
"Repurchase Date" has the meaning provided in Section 4.15.
---------------
"Restricted Payment" has the meaning provided in Section 4.10.
------------------
"Restricted Security" has the meaning assigned to such term in Rule
-------------------
144(a)(3) under the Act; provided that the Trustee shall be entitled to request
and conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Security.
"Restricted Subsidiary" of a Person means any Subsidiary of the
---------------------
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Act.
---------
"Sale and Leaseback Transaction" means any direct or indirect
------------------------------
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of any property, whether owned by
the Company or any Subsidiary at the Issue Date or later acquired, which has
been or
-24-
is to be sold or transferred by the Company or such Subsidiary to such Person
or to any other Person from whom funds have been or are to be advanced by such
Person on the security of such Property.
"SEC" means the United States Securities and Exchange Commission and
---
any successor agency.
"Senior Indebtedness" means, all Indebtedness and other Obligations
-------------------
specified below payable directly or indirectly by the Company or any of its
Restricted Subsidiaries (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable law), whether outstanding on the Issue Date or thereafter created,
incurred or assumed, by the Company or any of its Restricted Subsidiaries: (i)
the principal of, interest on and all other Obligations related to, the Credit
Facility (including without limitation all loans, letters of credit and other
extensions of credit under the Credit Facility, and all expenses, fees,
reimbursements, indemnities and other amounts owing pursuant to the Credit
Facility); (ii) amounts payable in respect of any Interest Swap Obligations and
Currency Agreements; (iii) all Indebtedness not prohibited by Section 4.12 that
is not expressly pari passu with or subordinated to the Notes; and (iv) all
permitted Refinancings thereof. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (a) any Indebtedness of the Company to a
Subsidiary of the Company, (b) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of the Company or any Subsidiary of
the Company (including, without limitation, amounts owed for compensation), (c)
Indebtedness to trade creditors and other amounts incurred in connection with
obtaining goods, materials or services, (d) Indebtedness represented by
Disqualified Capital Stock, (e) any liability for federal, state, local or other
taxes owed or owing by the Company, (f) Indebtedness incurred in violation of
Section 4.12, (g) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company and (h) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Company.
"Significant Subsidiary" shall have the meaning set forth in Rule
----------------------
1.02(w) of Regulation S-X under the Securities Act.
"Stated Maturity" means, with respect to any installment of interest,
---------------
accreted value or principal on any series of Indebtedness, the date on which
such payment of interest or principal is due or is scheduled to be paid in the
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest,
accreted value or principal prior to the date originally scheduled for the
payment or accretion thereof.
-25-
"Subsidiary", with respect to any Person, means (i) any corporation of
----------
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means (i) initially, Amarillo Acute Dialysis
--------------------
Specialists, L.L.C., Con-Med Supply Company, Inc., Continental Health Care,
Ltd., Dialysis Specialists of Corpus Christi, L.L.C., Dialysis Specialists of
South Texas, L.L.C., Dupage Dialysis Ltd., Everest Management, Inc., Hemo
Dialysis of Amarillo L.L.C., Home Dialysis of America, Inc., Home Dialysis of
Dayton, Inc., Lake Avenue Dialysis Center, Inc., Mercy Dialysis Center, Inc.,
New York Dialysis Management, Inc., North Xxxxxxx Dialysis Center, Inc.,
Northwest Indiana Dialysis, Inc., Ohio Valley Dialysis Center, Inc., and WSKC
Dialysis Services, Inc., and (ii) each of the Company's Subsidiaries that in the
future executes a supplemental indenture in which such Subsidiary agrees to be
bound by the terms of this Indenture as a Subsidiary Guarantor; provided that
any Person constituting a Subsidiary Guarantor as described above shall cease to
be a Subsidiary Guarantor when its respective Guarantee is released in
accordance with the terms thereof.
"Surviving Entity" has the meaning provided in Section
----------------
5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.4.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by the
-------------
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"U.S. Government Obligations" means non-callable direct obligations
---------------------------
of, and non-callable obligations guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
-----------------
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Notes" has the meaning provided in
-------------------
-26-
Section 2.1.
"Unrestricted Notes" means one or more Notes that do not and are not
------------------
required to bear the private placement legend in the form set forth on Exhibit
-------
A(l), including, without limitation, the Exchange Notes in the form set forth as
----
Exhibit A(2) hereto.
------------
"Unrestricted Subsidiary" means any Subsidiary that is designated by
-----------------------
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to
a Board Resolution, but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) on the date of such designation
is not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company or such Restricted
Subsidiary; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Capital Stock or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and (e) has at least one director on its board of
directors that is not a director or executive officer of the Company or its
Restricted Subsidiaries, and has at least one executive officer that is not a
director or executive officer of the Company or its Restricted Subsidiaries.
"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 payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means any
----------------------------------
Restricted Subsidiary of such Person of which all the outstanding voting
securities are owned by such Person or any Wholly Owned Restricted Subsidiary of
such Person.
Section 1.2. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
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:
-27-
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Subsidiary Guarantors, or any other obligor on the Notes or the Guarantees.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.3. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE II.
THE NOTES
Section 2.1. Form and Dating.
---------------
The Initial Notes, the notation thereon relating to the Guarantees and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A(1) hereto. The Exchange Notes, the notation thereon relating to
------------
the Guarantees and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A(2) hereto. The Notes may have notations,
------------
legends or endorsements required by law, stock exchange rule or depository rule
or usage. The Company and the Trustee shall approve the form of the Notes and
any notation,
-28-
legend or endorsement on them. Each Note shall be dated the date of its
issuance.
The terms and provisions contained in the Notes and the Guarantees
annexed hereto as Exhibits A(l) and A(2), shall constitute, and are hereby
------------- ----
expressly made, a part of this Indenture and, to the extent applicable, the
Company, the Subsidiary Guarantors and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A(l) (the "Global Note"),
------------ -----------
deposited with the Trustee, as custodian for the Depository, and shall bear the
legend set forth in Exhibit B, duly executed by the Company and the Subsidiary
---------
Guarantors, if any, and authenticated by the Trustee as hereinafter provided.
The aggregate principal amount of the Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A(l) (the
------------
"Offshore Physical Notes"). Notes offered and sold in reliance on any other
-----------------------
exemption from registration under the Securities Act other than as described in
the preceding paragraph shall be issued, and Notes offered and sold in reliance
on Rule 144A may be issued, in the form of permanent certificated Notes in
registered form, in substantially the form set forth in
Exhibit A(1) (the "U.S. Physical Notes"). The Offshore Physical Notes and the
------------ -------------------
U.S. Physical Notes are sometimes collectively herein referred to as the
"Physical Notes."
---------------
Section 2.2. Execution and Authentication;
Aggregate Principal Amount.
---------------------------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to the Notes for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Notes. Each
Subsidiary Guarantor shall execute the Guarantee in the manner set forth in
Section 11.8.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
-29-
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed $150,000,000 in one or more series,
(ii) Private Exchange Notes from time to time only in exchange for a like
principal amount of Initial Notes and (iii) Unrestricted Notes from time to time
only (x) in exchange for a like principal amount of Initial Notes or (y) in an
aggregate principal amount of not more than the excess of $150,000,000 over the
sum of the aggregate principal amount of (A) Initial Notes then outstanding, (B)
Private Exchange Notes then outstanding and (C) Unrestricted Notes issued in
accordance with (iii)(x) above, in each case upon a written order of the Company
in the form of an Officers' Certificate of the Company. Each such written order
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes,
Private Exchange Notes or Unrestricted Notes and whether the Notes are to be
issued as Physical Notes or Global Notes or such other information as the
Trustee may reasonably request. In addition, with respect to authentication
pursuant to clauses (ii) or (iii) of the first sentence of this paragraph, the
first such written order from the Company shall be accompanied by an Opinion of
Counsel of the Company in a form reasonably satisfactory to the Trustee stating
that the issuance of the Private Exchange Notes or the Unrestricted Notes, as
the case may be, does not give rise to an Event of Default, complies with this
Indenture and has been duly authorized by the Company. The aggregate principal
amount of Notes outstanding at any time may not exceed $150,000,000, except as
provided in Section 2.8.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its best efforts to obtain the same
"CUSIP" number for such Notes as is printed on the Notes outstanding at such
time; provided, however, that if any series of Notes issued under this Indenture
subsequent to the Issue Date is determined, pursuant to an Opinion of Counsel of
the Company in a form reasonably satisfactory to the Trustee to be a different
class of security than the Notes outstanding at such time for federal income tax
purposes, the Company may obtain a "CUSIP" number for such Notes that is
different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "Authenticating
--------------
Agent") reasonably acceptable to the Company to
-----
-30-
authenticate Notes. Unless otherwise provided in the appointment, an
Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such Authenticating Agent. An Authenticating Agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
Section 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
---------
("Paying Agent") and (c) notices and demands to or upon the Company in respect
--------------
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may have one or more co-Registrars and one
or more additional paying agents reasonably acceptable to the Trustee. The
term "Paying Agent" includes any additional Paying Agent. Neither the Company
nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, 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 7.7.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days prior written notice to the
Company.
Section 2.4. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that, subject to Articles X and XII, each Paying Agent shall
hold in trust for the benefit of the Holders or the Trustee all assets held by
the Paying Agent for the payment of principal of, or interest on, the Notes
(whether
-31-
such assets have been distributed to it by the Company or any other obligor on
the Notes), and the Company and the Paying Agent shall notify the Trustee in
writing of any Default by the Company (or any other obligor on the Notes) in
making any such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
Section 2.5. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee as of each Record Date and before
each related Interest Payment Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of Noteholders, which list may be
conclusively relied upon by the Trustee.
Section 2.6. Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; provided, however, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfer
and exchanges, the Company shall issue and execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made to a Noteholder for any registration of transfer or
exchange. The Company may require from such Noteholder payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar governmental
charge payable upon exchanges or transfers pursuant to Sections 2.10, 3.6, 4.15,
4.16 or 9.6, in which event the Company shall be responsible for the payment of
such taxes).
-00-
Xxx Xxxxxxxxx or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
Section 2.7. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and execute and the Trustee shall authenticate a replacement
Note if the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an affidavit of lost certificate and an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. The Company may
charge such Holder for its reasonable, out-of-pocket expenses in replacing a
Note, including reasonable fees and expenses of the Trustee and counsel and the
Trustee may charge the Company for the Trustee's reasonable out-of-pocket
expenses in replacing such Note. Every replacement Note shall constitute an
additional Obligation of the Company.
Section 2.8. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.9, a Note does not cease to be
outstanding because the Company, any Subsidiary Guarantor or any of their
respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
---- ----
of such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the
-33-
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes shall cease to be outstanding and interest on them shall cease
to accrue.
Section 2.9. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company, any Subsidiary Guarantor or any of their respective Affiliates
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Trust Officer of the
Trustee actually knows are so owned shall be so considered. The Company shall
notify the Trustee, in writing, when it, any Subsidiary Guarantor or any of
their respective Affiliates repurchases or otherwise acquires Notes, and of the
aggregate principal amount of such Notes so repurchased or otherwise acquired.
Section 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated, and shall direct
the Trustee to authenticate such Notes and certify that all conditions precedent
to the issuance of such Notes contained herein have been complied with.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company and the Trustee consider appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.2 definitive Notes in exchange for temporary Notes.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, shall
(subject to the record-retention requirements of the Exchange Act) dispose of
all Notes surrendered for registration of transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Notes to
replace Notes that it has paid or delivered to the Trustee for cancellation. If
the Company or any Subsidiary Guarantor shall acquire any of the Notes, such
acquisition shall not operate as a redemption or
-34-
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
Section 2.12. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Section 2.13. CUSIP Number.
------------
The Company in issuing the Notes may use one or more "CUSIP" numbers,
and if so, the appropriate CUSIP number(s) shall be included in all notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made by the Trustee as to the
correctness or accuracy of any CUSIP number(s) printed in the notice or on the
Notes, and that reliance may be placed only on the other identification numbers
printed on the Notes. The Company shall promptly notify the Trustee of any
change in the CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
Prior to 10:00 a.m., New York City time, on each Interest Payment Date
and on the Maturity Date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date or Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date or Maturity Date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Note.
-------------------------------------
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B. Members of, or participants in, the Depository ("Depository
--------- ----------
Participants") shall have no rights under this Indenture with respect to any
------------
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the
-35-
Company or the Trustee as the absolute owner of the Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Depository
Participants, the operation of customary practices governing the exercise of the
rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.16. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the Global Note if (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for the Global Note and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Notes of authorized
denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.16, bear the Private Placement Legend.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Depository Participants and persons that may
hold interests through Depository Participants, to take any action which a
Holder is entitled to take under this Indenture or the Notes.
-36-
Section 2.16. Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-
---------------------------------------------------------------
U.S. Persons. The following provisions shall apply with respect to the
------------
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the
second anniversary of the date of this Indenture and the transferor
certifies that it is not, and for the preceding three months has not
been, an Affiliate of the Company or any Subsidiary Guarantor, and
that the Restricted Security was not acquired from the Company or an
Affiliate of the Company less than two years prior to the date of the
proposed transfer or (y) (1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding Non-
U.S. Persons), the proposed transferee has delivered to the Registrar
a certificate substantially in the form of Exhibit C hereto or (2)
---------
in the case of a transfer to a Non-U.S. Person, the proposed
transferor has delivered to the Registrar a certificate substantially
in the form of Exhibit D hereto; and
---------
(ii) if the proposed transferor is a Depository Participant
holding a beneficial interest in the Global Note, upon receipt by the
Registrar of (x) the certificate, if any, required by paragraph (i)
above and (y) instructions given in accordance with the Depository's
and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the
date and (if the transfer does not involve a transfer of outstanding
Physical Notes) a decrease in the principal amount of the Global Note in an
amount equal to the principal amount of the beneficial interest in the
Global Note to be transferred, and (b) the Company shall execute and the
Trustee shall authenticate and deliver one or more Physical Notes of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made
-37-
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Note stating, or
has otherwise advised the Company and the Registrar in writing, that
it is purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is a Depository Participant, and
the Notes to be transferred consist of Physical Notes which after
transfer are to be evidenced by an interest in the Global Note, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the Global Note in an amount equal to the
principal amount of the Physical Notes to be transferred, and the
Trustee shall cancel the Physical Notes so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
------------------------
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the circumstance contemplated by paragraph
(a)(i)(x) of this Section 2.16 exist or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such Private Placement Legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Act.
(d) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16
for a period of three years. The Company shall have the right to inspect and
make copies of
-38-
all such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
ARTICLE III.
REDEMPTION
Section 3.1. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to Paragraph Six of the
Notes, it shall notify both the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed. The
Company shall give each notice provided for in this Section 3.1 at least 30 days
(or 45 days if the Company causes the Trustee to give notice of redemption to
the Holders pursuant to Section 3.3 hereof) before the Redemption Date, together
with an Officers' Certificate and Opinion of Counsel stating that such
redemption shall comply with the conditions contained herein and in the Notes.
Section 3.2. Selection of Notes To Be Redeemed.
---------------------------------
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that if a
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to Depository procedures), unless such method is otherwise
prohibited. The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3. 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 a notice of redemption by first
class mail, postage prepaid, to each Holder whose Notes are to be redeemed, with
a copy to the
-39-
Trustee and any Paying Agent.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such
redemption is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(6) that, unless (a) the Company defaults in making the
redemption payment or (b) such redemption payment is prohibited
pursuant to Article X or XII hereof or otherwise, interest on Notes
called for redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price plus accrued interest, if any,
to the Redemption Date, upon surrender to the Paying Agent of the
Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of
such Note to be redeemed and that, on or after the Redemption Date,
and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be
issued; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.3,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption, unless prohibited
pursuant to Article X or XII or otherwise pursuant to this Indenture, shall be
paid at the Redemption Price (which shall include accrued
-40-
interest thereon to the Redemption Date), but installments of interest, the
maturity of which is on or prior to the Redemption Date, shall be payable to
Holders of record at the close of business on the relevant record dates referred
to in the Notes.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or before the Redemption Date, the Company shall deposit with the
Paying Agent in immediately available funds U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes or portions
thereof to be redeemed on that date. The Paying Agent shall promptly return to
the Company any U.S. Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article VII.
If the Company complies with the preceding paragraph and payment of
the Notes is not prohibited under Article X or XII or otherwise, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Notes to be redeemed shall cease to accrue on
and after the applicable Redemption Date, whether or not such Notes are
presented for payment.
Section 3.6. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the Company
shall issue and execute, and the Trustee shall authenticate for the Holder, a
new Note or Notes equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE IV.
COVENANTS
Section 4.1. Payment of Notes.
----------------
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Notes. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
-41-
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.3. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.2.
Section 4.3. Corporate Existence.
-------------------
Except as otherwise permitted by Article V, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of the Restricted Subsidiaries in accordance with the
respective organizational documents of each such Restricted Subsidiary and the
material rights (charter and statutory) and franchises of the Company and each
such Restricted Subsidiary; provided, however, that the Company shall not be
required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Subsidiaries, any such existence, material right
or franchise, if the Board of Directors of the Company shall determine in good
faith that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole.
Section 4.4. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
its Properties or any of its Subsidiaries' Properties and (ii) all material
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon its Properties or any of its Subsidiaries' Properties,
except, in each case, as would not be, in the aggregate, reasonably likely to
have a material adverse effect on the business and financial condition of the
Company and its Restricted Subsidiaries, taken as a whole; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
-42-
Section 4.5. Business Activities.
-------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.6. Compliance Certificate;
Notice of Default.
-----------------------
(a) The Company shall deliver to the Trustee, within 120 days after
the end of the Company's fiscal year, an Officers' Certificate which complies
with TIA (S) 314(a)(4) stating that a review of its activities during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its Obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to such Officer's knowledge the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and the Obligations contained in this
Indenture and the Notes and no Default or Event of Default occurred during such
year and at the date of such certificate there is no Default or Event of Default
that has occurred and is continuing or, if such signers do know of such Default
or Event of Default, the certificate shall describe the Default or Event of
Default and its status with particularity. The Officers' Certificate shall also
notify the Trustee should the Company elect to change the manner in which it
fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.8
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article IV, V or VI of this Indenture insofar as they relate to
accounting matters 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.
-43-
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 13.2 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action (including any action the Company
is taking or proposes to take in respect thereof) within thirty days of such
occurrence.
Section 4.7. Compliance with Laws.
--------------------
The Company shall, and shall cause each of its Subsidiaries to, comply
with all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties, except for such noncompliances
as are not in the aggregate reasonably likely to have a material adverse effect
on the business or financial condition of the Company and its Subsidiaries,
taken as a whole.
Section 4.8. Reports to Holders.
------------------
(a) The Company shall deliver to the Trustee within 15 days after the
filing of the same with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the Commission, to the extent permitted, and provide the Trustee
and Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company
shall also comply with the other provisions of TIA (S) 314(a).
(b) At the Company's expense, regardless of whether the Company is
required to furnish such reports and other information referred to in paragraph
(a) above to its stockholders pursuant to the Exchange Act, the Company shall
cause such reports and other information to be mailed to the Holders at their
addresses appearing in the register of Notes maintained by the Registrar within
15 days after it files (or if it is no longer subject to such requirement, would
have been required to file) them with the SEC.
(c) The Company shall provide to any Holder any information
reasonably requested by such Holder concerning the
-44-
Company (including financial statements) necessary in order to permit such
Holder to sell or transfer Notes in compliance with Rule 144A under the Act.
(d) At the Company's expense, the Company shall cause an annual
report if furnished by it to stockholders generally and each quarterly or other
financial report if furnished by it to stockholders generally to be filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar at the time of such mailing or
furnishing to stockholders. The Company shall make such annual, quarterly and
other financial reports available to securities analysts and prospective
investors upon request.
Section 4.9. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company and each Subsidiary Guarantor 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 or
extension law or any usury law or other law that would prohibit or forgive the
Company or any such Subsidiary Guarantor, as the case may be, from paying all or
any portion of the principal of or interest on the Notes or performing its
Guarantee, as the case may be and as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company and each Subsidiary Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
Section 4.10. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly: (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company) on or in respect of shares of the
Company's Capital Stock or any Restricted Subsidiary's Capital Stock; (b)
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
the Company or any Subsidiary of the Company or any warrants, rights or options
to purchase or acquire shares of any class of such Capital Stock; (c) make any
Investment (other than Permitted Investments); or (d) make any payment on or
with respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness subordinated in right of payment to the Notes or the
Guarantees, except a payment of interest or principal at Stated Maturity (each
of the foregoing actions set forth in clauses (a), (b), (c) and (d) being
referred to as a "Restricted Payment"), unless at the time of such Restricted
------------------
Payment and immediately after giving effect thereto,
-45-
(i) no Default or Event of Default shall have occurred and be continuing; and
(ii) the Company is able to incur at least $1.00 of additional Indebtedness (in
addition to Permitted Indebtedness) in compliance with Section 4.12; and (iii)
the aggregate amount of Restricted Payments (including such proposed Restricted
Payment) made subsequent to the Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value of such property as
determined reasonably and in good faith by the Board of Directors of the
Company) is less than the sum of: (w) 50% of the cumulative Consolidated Net
Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss) of the Company earned subsequent to the Issue Date and on or prior to
the date the Restricted Payment occurs (the "Reference Date") (treating such
--------------
period as a single accounting period); plus (x) 100% of the aggregate net cash
proceeds received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and on or prior
to the Reference Date of Qualified Capital Stock of the Company; plus (y) 100%
of the net cash proceeds from the sale of Investments by the Company (other than
Permitted Investments) provided that such Investment was made after the Issue
Date; plus (z) without duplication of any amounts included in clause (iii)(x)
above, 100% of the aggregate net cash proceeds of any equity contribution
received by the Company from a holder of the Company's Capital Stock (excluding,
in the case of clauses (iii)(x) and (z), any net cash proceeds from a Public
Equity Offering to the extent used to redeem the Notes).
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if the
dividend would have been permitted on the date of declaration; or (2) if no
Default or Event of Default shall have occurred and be continuing, the
acquisition of any shares of Qualified Capital Stock of the Company or payment,
redemption, acquisition or defeasance of Indebtedness subordinated in right of
payment to the Notes or the Guarantees, either (i) solely in exchange for shares
of Qualified Capital Stock of the Company and Refinancing Indebtedness or (ii)
through the application of net proceeds of a substantially concurrent sale for
cash (other than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company (excluding, in the case of clause (2)(ii), any net cash
proceeds from a Public Equity Offering to the extent used to redeem the Notes);
(3) the defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Refinancing
Indebtedness; (4) the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the Company or a Wholly Owned Restricted Subsidiary
of the Company; (5) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any member of
the Company's (or any of its Restricted Subsidiaries') management either (a)
-46-
pursuant to any management equity subscription agreement or stock option
agreement in effect as of the date of this Indenture, or (b) upon the
termination of such person's employment; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Capital Stock pursuant
to clauses (a) and (b) shall not exceed $1,000,000 in any twelve-month period
and no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; (6) if no Default or Event of Default shall
have occurred and be continuing, repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof; (7) Investments in, including Contributions to, a
Restricted Subsidiary if such Restricted Subsidiary is not a Foreign Subsidiary,
including Investments in, or Contributions to a Person which becomes a
Restricted Subsidiary as a result thereof and, if such Person is not already a
Subsidiary Guarantor, such Person (a) executes and delivers to the Trustee a
supplemental indenture in the form of Exhibit E hereto pursuant to which such
Restricted Subsidiary shall guarantee all of the Obligations of the Company with
respect to this Indenture and the Notes and (b) delivers to the Trustee an
Opinion of Counsel reasonably satisfactory to the Trustee to the effect that
such supplemental indenture has been duly executed and delivered by such
Restricted Subsidiary and is in compliance with the terms of this Indenture; (8)
so long as no Default or Event of Default shall have occurred and be continuing,
dividends and distributions by a Restricted Subsidiary pro rata to the holders
of its Capital Stock as their interests may appear; (9) the payment of a
preferred return to certain of the equity holders of Tri-State Perfusion, LLC,
pursuant to agreements in effect as of the Issue Date; and (10) the acquisition
of any equity in The Extracorporeal Alliance, L.L.C., pursuant to the terms of
one or more of the Put/Call Agreements dated November 26, 1996, by and among the
Company, The Extracorporeal Alliance, L.L.C., Great Lakes Perfusion, Inc., Bay
Extracorporeal Technologies, Inc., Everest Management, Inc., and certain other
parties signatory thereto with the cash proceeds actually received by the
Company or the trustee under the terms of the related Trust Agreement from any
life insurance policy insuring the life of the party whose estate or beneficiary
is exercising such put; provided, that any increase in the annual premiums for
such policies over the annual premium in effect as of the Issue Date shall be
deemed to be an "Investment" for purposes of this Indenture. In determining the
aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the immediately preceding paragraph, amounts
expended pursuant to clauses (1) and (5) shall be included in such calculation.
Not later than 45 days after the end of each calendar quarter, the
Company shall deliver to the Trustee an Officers' Certificate stating that any
Restricted Payment made during such calendar quarter complies with this
Indenture and setting forth in reasonable detail the basis upon which the
required calculations were computed, which calculations may be based upon
-47-
the Company's latest available internal quarterly financial statements.
Section 4.11. Limitation on Transactions with Affiliates.
------------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any Affiliate of the Company or its
Restricted Subsidiaries (each an "Affiliate Transaction"), other than (x)
---------------------
Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions on terms that are no less favorable to the Company or such
Restricted Subsidiary than those that could reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate of the Company or such Restricted Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions which are
similar or part of a common plan) involving aggregate payments or other property
with a fair market value in excess of $1,000,000 shall be approved by the Board
of Directors of the Company or such Restricted Subsidiary, as the case may be,
such approval to be evidenced by a Board Resolution stating that such Board of
Directors has determined that such transaction complies with the foregoing
provisions. If the Company or any Restricted Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) that involves aggregate payments or other property
with a fair market value of more than $5,000,000, the Company or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Restricted Subsidiary, as the case
may be, from a financial point of view, from an Independent Financial Advisor
and file the same with the Trustee. For purposes of calculating the fair market
value of any transaction with or for the benefit of an Article 28 Company, the
value of any investment in any Subsidiary of the Company that engages in
transactions with such Article 28 Company shall be disregarded.
The restrictions set forth in the preceding paragraph shall not apply
to, and the following shall be deemed not to be Affiliate Transactions: (i)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any Subsidiary of the Company
as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Wholly
Owned Restricted Subsidiaries or exclusively between or among such Wholly Owned
-48-
Restricted Subsidiaries, provided such transactions are not otherwise prohibited
by this Indenture and in the case of transactions involving Wholly Owned
Restricted Subsidiaries that are Foreign Subsidiaries, such transactions are on
terms no less favorable to the other Wholly Owned Restricted Subsidiary than
those that could reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of the
Company or such Subsidiary; (iii) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the Holders in any material respect than the original agreement as in effect on
the Issue Date; (iv) transactions permitted by Section 4.23; (v) Restricted
Payments permitted by Section 4.10 and Permitted Investments; (vi) contracts
pursuant to which the Company or a Wholly Owned Restricted Subsidiary provides
management services to an Affiliate in exchange for payments in cash or Cash
Equivalents, that are no less favorable to the Company or such Wholly Owned
Restricted Subsidiary than those that could reasonably be obtained in a
comparable transaction at such time on an arm's length basis from a Person that
is not an Affiliate of the Company or such Wholly Owned Restricted Subsidiary;
and (vii) leases of employees for payments in cash or Cash Equivalents that are
greater than or equal to the wage and benefit cost of such employees.
Section 4.12. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
-----
(other than Permitted Indebtedness); provided, however, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company and its
Subsidiaries may incur Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such Indebtedness, after
giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage
Ratio of the Company is greater than 2.0 to 1.0. The accrual of interest and
the accretion of original issue discount shall not constitute the incurrence of
Indebtedness.
(b) "Permitted Indebtedness" means without duplication, each of the
----------------------
following:
(i) Indebtedness under the Notes and the Indenture;
(ii) Indebtedness under the Guarantees;
(iii) Indebtedness incurred pursuant to the Credit Facility (and the
guarantees thereunder) in an aggregate principal amount at any time
outstanding not to exceed
-49-
$100,000,000, less the amount of any required permanent repayments, if any
(which are accompanied by a corresponding permanent commitment reduction)
thereunder (excluding any such payments on the Issue Date or to the extent
refinanced at the time of payment);
(iv) other Indebtedness of the Company and its Subsidiaries
outstanding on the Issue Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon;
(v) Interest Swap Obligations of the Company covering Indebtedness
of the Company or any of its Subsidiaries and Interest Swap Obligations of
any Subsidiary of the Company covering Indebtedness of such Subsidiary;
provided, however, that (x) such Interest Swap Obligations are designed to
protect the Company and its Subsidiaries from fluctuations in interest
rates on Indebtedness incurred in accordance with the Indenture (and are
used for bona fide hedging, and not speculative, purposes); and (y) the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(vi) Indebtedness under Currency Agreements; provided that such
Currency Agreements: (i) are designed to protect against fluctuations in
currency value (and are used for bona fide hedging, and not speculative,
purposes) and (ii) in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the Indebtedness of
the Company and its Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(vii) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly Owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a Wholly
Owned Restricted Subsidiary of the Company, in each case subject to no Lien
held by a Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided that if as of any date any Person other
than the Company or a Wholly Owned Restricted Subsidiary of the Company
owns or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(viii) Indebtedness of a Restricted Subsidiary of the Company
permitted pursuant to clause (7) of the second paragraph of Section 4.10 or
clause (ix) or (x) of the definition of "Permitted Investment";
-50-
(ix) Indebtedness of the Company to a Restricted Subsidiary of the
Company for so long as such Indebtedness is held subject to no Lien;
provided that (a) any Indebtedness of the Company to a Restricted
Subsidiary of the Company is unsecured and subordinated, pursuant to a
written agreement, to the Company's Obligations under the Indenture and the
Notes and (b) if as of any date any Person other than a Restricted
Subsidiary of the Company owns or holds any such Indebtedness or any Person
holds a Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
Company;
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within two business days of incurrence;
(xi) Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiary, as the case may be, in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance
or similar requirements in the ordinary course of business;
(xii) Refinancing Indebtedness;
(xiii) Indebtedness incurred by the Company or any Restricted
Subsidiary of the Company in connection with the purchase or improvement of
property (real or personal) or equipment or other capital expenditures in
the ordinary course of business or consisting of Capitalized Lease
Obligations; provided that at the time of the incurrence thereof, such
Indebtedness which is then outstanding does not exceed $5,000,000;
(xiv) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary, for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Restricted Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition; provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and the Restricted
Subsidiary in connection with such disposition;
(xv) Obligations in respect of performance bonds and completion
guarantees provided by the Company or any Restricted Subsidiary of the
Company in the ordinary course of business;
-51-
(xvi) Guarantees by the Company or a Restricted Subsidiary of the
Company of Indebtedness incurred by the Company or a Restricted Subsidiary
of the Company so long as the incurrence of such Indebtedness by the
Company or any such Restricted Subsidiary of the Company is otherwise
permitted by the terms of the Indenture; and
(xvii) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $7,500,000 at
any one time outstanding.
(c) For purposes of determining compliance with this Section 4.12,
in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Permitted Indebtedness described in Section
4.12(b) or is entitled to be incurred pursuant to Section 4.12(a), the
Company shall, in its sole discretion, classify such item of Indebtedness
in any manner that complies with this Section 4.12 and such item of
Indebtedness shall be treated as having been incurred pursuant to only one
of Section 4.12(a) or (b).
Section 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
-----------------------------------------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances or to pay or guarantee any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or (c) transfer any
of its property or assets to the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Subsidiary of the Company; (4) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties or
assets of the Person so acquired; (5) agreements existing on the Issue Date to
the extent and in the manner such agreements are in effect on the Issue Date;
(6) purchase money obligations for property acquired that impose restrictions of
the nature described in clause (4) above on the property so acquired; (7) any
instrument or agreement governing Indebtedness permitted to be incurred under
Section 4.12, which is secured by a Lien permitted to be incurred under Section
4.18, which encumbrance or restriction is not applicable to any property or
assets other than the property or assets subject to such Lien; (8) an agreement
governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or
incurred pursuant to an agreement referred to in clause (2), (4), (5), (6) or
(7)
-52-
above; provided, however, that the provisions relating to such encumbrance or
restriction contained in any such Refinancing Indebtedness are no less favorable
to the Company in any material respect as determined by the Board of Directors
of the Company in their reasonable and good faith judgment than the provisions
relating to such encumbrance or restriction contained in agreements referred to
in such clause (2), (4), (5), (6) or (7); or (9) any restrictions imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the Capital Stock or property of any Restricted Subsidiary
that apply pending the closing of such sale or disposition.
Section 4.14. Prohibition on Incurrence of Layered Indebtedness.
-------------------------------------------------
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is both (a) subordinate or
junior in right of payment to any Senior Indebtedness and (b) senior in any
respect in right of payment to the Notes. No Subsidiary Guarantor shall incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is both (a) subordinate or junior in right of payment to its Guarantor
Senior Indebtedness and (b) senior in right of payment to its Guarantee.
Section 4.15. Limitation on Change of Control.
-------------------------------
(a) Upon the occurrence of a Change of Control, each Holder shall have
the right to require the repurchase of such Holder's Notes pursuant to the offer
described in paragraph (b) below (the "Change of Control Offer"), at a purchase
-----------------------
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "Repurchase Date") (subject to
---------------
the rights of the holders of record on the relevant record date to receive
interest on the relevant interest payment date). Within 10 days after the date
upon which the Change of Control occurs (the "Change of Control Date") requiring
----------------------
the Company to make a Change of Control Offer pursuant to this Section 4.15, the
Company shall so notify the Trustee in writing.
(b) Within 30 days following any Change of Control Date, the Company
shall send, by first class mail, a notice to each Holder, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer.
The notice to the Holders shall contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be accepted for
payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be
-53-
no earlier than 30 days nor later than 45 days from the date such
notice is mailed, other than as may be required by law) (the "Change
------
of Control Payment Date");
-----------------------
(3) that any Note not tendered will continue to accrue interest
if interest is then accruing;
(4) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the third
Business Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City
time, on the third Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased; and
(7) the circumstances and relevant facts regarding such Change
of Control.
(c) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all Notes
or portions thereof so tendered and accepted and (iii) deliver to the Trustee
Notes so accepted for cancellation pursuant to Section 2.11, together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail or deliver to the Holders of
Notes so accepted payment in an amount equal to the purchase price plus accrued
interest, if any, and the Company shall execute and issue, and the Trustee shall
promptly authenticate and mail or deliver to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered. Any Notes
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company
-54-
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent.
(d) Prior to the mailing of the notice to Holders described in clause
(b) above, but in any event within 30 days following any Change of Control, the
Company shall (i) repay in full all Indebtedness and terminate all commitments
under the Credit Facility and all other Senior Indebtedness the terms of which
require repayment upon a Change of Control or prohibit a Change of Control Offer
or offer to repay in full and terminate all commitments under all Indebtedness
under the Credit Facility and all other such Senior Indebtedness and to repay
the Indebtedness owed to each lender which has accepted such offer or (ii)
obtain the requisite consents under the Credit Facility and all other Senior
Indebtedness to permit the repurchase of the Notes as described above.
(e) 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 Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue thereof.
(f) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.16. Limitation on Asset Sales.
-------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company or the applicable Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at
least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith by the Company's Board of
Directors);
(ii) at least 75% of the consideration received by the Company
or such Restricted Subsidiary, as the case may be, from such Asset
Sale shall be in the form of cash or Cash Equivalents and is received
at the time
-55-
of such disposition; provided that the amount of (x) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent
balance sheet), of the Company or any Restricted Subsidiary (other
than (I) contingent liabilities (except to the extent reflected (or
reserved for) on a balance sheet of the Company or any Restricted
Subsidiary as of the date prior to the date of consummation of such
transaction) and (II) liabilities that are by their terms subordinated
to the Notes or the Guarantees) that are assumed by the transferee of
any such assets and (y) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such
transferee that are converted within 90 days by the Company or such
Restricted Subsidiary into cash or Cash Equivalents (to the extent so
received), shall be deemed to be cash or Cash Equivalents for purposes
of this provision; and
(iii) upon the consummation of an Asset Sale, the Company shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash
Proceeds relating to such Asset Sale within 180 days of receipt
thereof either (A) to prepay any Senior Indebtedness and, in the case
of any Senior Indebtedness under any Credit Facility, effect a
permanent reduction in the availability under such Credit Facility,
(B) to make an investment in properties and assets (other than cash,
Cash Equivalents or inventory) that replace the properties and assets
that were the subject of such Asset Sale or in properties and assets
that will be used in a Permitted Business ("Replacement Assets"), or
------------------
(C) a combination of prepayment and investment permitted by the
foregoing clauses (iii)(A) and (iii)(B).
(b) On the 181st day after an Asset Sale or such earlier date, if
any, as the Board of Directors of the Company or of such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such
Asset Sale as set forth in clauses (a)(iii)(A), (iii)(B) and (iii)(C)
(each, a "Net Proceeds Offer Trigger Date"), the portion of such aggregate
-------------------------------
amount of Net Cash Proceeds which have not been applied on or before such
Net Proceeds Offer Trigger Date as permitted in clauses (a)(iii)(A),
(iii)(B) and (iii)(C) equal to the principal amount of the Notes divided by
the sum of the principal amount of the Notes and all Indebtedness
constituting Pari Passu Debt (each a "Net Proceeds Offer Amount") shall be
-------------------------
applied by the Company or such Subsidiary to make an offer to purchase (the
"Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not
------------------ -------------------------------
less than 30 nor more than 45 days following the applicable Net Proceeds
Offer Trigger Date, from all Holders on a pro rata basis, that amount of
Notes equal to the Net
-56-
Proceeds Offer Amount at a price equal to 100% of the principal amount of
the Notes to be purchased, plus accrued and unpaid interest thereon, if
any, to the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Subsidiary of the
Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash or Cash Equivalents (other
than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset
Sale hereunder and the Net Cash Proceeds thereof shall be applied in
accordance with this Section 4.16. The Company may defer the Net Proceeds
Offer until there is an aggregate unutilized Net Proceeds Offer Amount
equal to or in excess of $5,000,000 resulting from one or more Asset Sales
(at which time, the entire unutilized Net Proceeds Offer Amount, and not
just the amount in excess of $5,000,000, shall be applied as required
pursuant to this paragraph).
(c) In the event of the transfer of substantially all (but not all)
of the property and assets of the Company and its Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.1, the
successor corporation shall be deemed to have sold the properties and
assets of the Company and its Subsidiaries not so transferred for purposes
of this Section 4.16, and shall comply with the provisions of this Section
4.16 with respect to such deemed sale as if it were an Asset Sale. In
addition, the fair market value of such properties and assets of the
Company or its Subsidiaries deemed to be sold shall be deemed to be Net
Cash Proceeds for purposes of this Section 4.16.
(d) Notwithstanding paragraphs (a) and (b), the Company and its
Subsidiaries shall be permitted to consummate an Asset Sale without
complying with such paragraphs to the extent: (i) at least 80% of the
consideration for such Asset Sale constitutes Replacement Assets (including
for purposes of this paragraph (d) only, inventory) and the remainder
constitutes cash or Cash Equivalents and (ii) such Asset Sale is for fair
market value; provided that any consideration not constituting Replacement
Assets (including for purposes of this paragraph (d) only, inventory)
received by the Company or any of its Subsidiaries in connection with any
Asset Sale permitted to be consummated under this paragraph shall
constitute Net Cash Proceeds subject to the provisions of paragraphs (a)
and (b).
(e) Each Net Proceeds Offer shall be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds
Offer Trigger Date, with a copy to the Trustee. The notice shall contain
all instructions and materials necessary to enable such Holders
-57-
to tender Notes pursuant to the Net Proceeds Offer and shall state the
following terms:
(1) that the Net Proceeds Offer is being made pursuant to
Section 4.16 and that all Notes tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Notes
tendered in a Net Proceeds Offer plus accrued interest at the
expiration of such offer exceeds the aggregate amount of the Net
Proceeds Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (based on amounts tendered) (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or integral multiples thereof shall
be purchased);
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be 20 Business Days from
the date such notice is mailed, or such longer period as may be
required by law) (the "Proceeds Purchase Date");
----------------------
(3) that any Note not tendered will continue to accrue interest
if interest is then accruing;
(4) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Net Proceeds
Offer shall cease to accrue interest after the Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to a
Net Proceeds Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the Proceeds
Purchase Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City
time, on the Proceeds Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such
Note purchased; and
(7) that Holders whose Notes were purchased only in part will be
issued new Notes equal to principal amount to the unpurchased portion
of the Notes surrendered.
-58-
(f) On or before the Proceeds Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b) above, (ii)
deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase
price of all Notes to be purchased and (iii) deliver to the Trustee Notes so
accepted for cancellation pursuant to Section 2.11, together with an Officers'
Certificate stating the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price plus accrued interest,
if any and the Company shall execute and issue, and the Trustee shall promptly
authenticate and mail or deliver to such Holders new Notes equal in principal
amount to any unpurchased portion of the Notes surrendered. The Company shall
publicly announce the results of the Net Proceeds Offer on or as soon as
practicable after the Proceeds Purchase Date. For purposes of this Section
4.16, the Trustee shall act as the Paying Agent.
(g) To the extent that the aggregate amount of Notes tendered
pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount, the
Company may use any remaining Net Proceeds Offer Amount for general corporate
purposes, and the Net Proceeds Offer Amount shall return to zero.
(h) Prior to the mailing of the notice to Holders described in clause
(e) above, but in any event within 30 days following any Net Proceeds Offer
Trigger Date, the Company shall (i) repay in full all Indebtedness and terminate
all commitments under the Credit Facility and all other Senior Indebtedness the
terms of which would prohibit the Net Proceeds Offer, or (ii) obtain the
requisite consents under the Credit Facility and all other Senior Indebtedness
to permit the Net Proceeds Offer.
(h) 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 Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 4.16, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under Section 4.16 by
virtue thereof.
Section 4.17. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.
-----------------------------------------------------
The Company: (i) shall not, and shall not permit any of its
Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Restricted Subsidiary of the Company to any Person
(other than the Company or a Restricted Subsidiary of the Company), unless both
(a)
-59-
either (x) after giving effect to such transfer, conveyance, sale, lease or
other disposition such Person remains a Restricted Subsidiary of the Company or
(y) such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Restricted Subsidiary and (b) the Net Cash Proceeds from
such transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.16, and (ii) shall not permit any Restricted
Subsidiary of the Company to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person, unless after giving effect to such issuance such
Restricted Subsidiary remains a Restricted Subsidiary of the Company.
Notwithstanding the foregoing, the Company may transfer up to a 2% of the equity
in Dialysis Specialists of Northeast Ohio, Ltd. pursuant to the terms of the
Operating Agreement of such entity as in effect on the Issue Date.
Section 4.18. Limitation on Liens.
-------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless: (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes, the Notes are secured by
a Lien on such property, assets or proceeds that is senior in priority to such
Liens and (ii) in all other cases, the Notes are equally and ratably secured,
except for (A) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date; (B) Liens securing Senior
Indebtedness; (C) Liens securing Guarantor Senior Indebtedness; (D) Liens in
favor of the Company or a Wholly Owned Restricted Subsidiary of the Company on
assets of any Restricted Subsidiary of the Company; (E) Liens securing
Refinancing Indebtedness which is incurred to Refinance any Indebtedness which
has been secured by a Lien permitted under this Indenture and which has been
incurred in accordance with the provisions of this Section 4.18; provided,
however, that such Liens (x) are no less favorable to the Holders and are not
more favorable to the lienholders with respect to such Liens than the Liens in
respect of the Indebtedness being Refinanced and (y) do not extend to or cover
any property or assets of the Company or any of its Subsidiaries not securing
the Indebtedness so Refinanced; and (F) Permitted Liens.
Section 4.19. Payments for Consent.
--------------------
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to
-60-
any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.20. Additional Guarantees.
---------------------
If (i) the Company or any of its Restricted Subsidiaries shall, after
the date of this Indenture, transfer or cause to be transferred, including by
way of any Investment, in one or a series of transactions (whether or not
related), any assets, businesses, divisions, real property or equipment having
an aggregate fair market value (as determined in good faith by the Board of
Directors) in excess of $1,000,000 to any Restricted Subsidiary that is not a
Subsidiary Guarantor or a Foreign Subsidiary, (ii) the Company or any of its
Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a
Foreign Subsidiary having total assets with a fair market value (as determined
in good faith by the Board of Directors) in excess of $1,000,000, or (iii) any
Restricted Subsidiary other than a Foreign Subsidiary shall incur Indebtedness
in excess of $1,000,000, then the Company shall, at the time of such transfer,
acquisition or incurrence, (i) cause such transferee, acquired Restricted
Subsidiary or Restricted Subsidiary incurring Indebtedness (if not then a
Subsidiary Guarantor) to execute a Guarantee of the Obligations of the Company
under the Notes in the form set forth in Exhibit E hereto and (ii) deliver to
---------
the Trustee an Opinion of Counsel, in form reasonably satisfactory to the
Trustee, that such Guarantee is a valid, binding and enforceable obligation of
such transferee, acquired Restricted Subsidiary or Restricted Subsidiary
incurring Indebtedness, subject to customary exceptions for bankruptcy,
fraudulent conveyance and equitable principles. Notwithstanding the foregoing,
the Company or any of its Restricted Subsidiaries may make an Investment (which
does not constitute a Permitted Investment) in any Restricted Subsidiary of the
Company without compliance with this Section 4.20 provided that such Investment
is otherwise permitted by Section 4.10.
Section 4.21. Sale and Leaseback Transactions.
-------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Restricted Subsidiary may enter into a Sale and Leaseback
Transaction if (i) the Company could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such Sale and Leaseback Transaction
pursuant to Section 4.12 and (b) incurred a Lien to secure such Indebtedness
pursuant to Section 4.18 and (ii) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (in the case
of gross cash proceeds in excess of $1,000,000 as determined
-61-
in good faith by the Board of Directors of such Person and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such Sale and Leaseback Transaction.
Section 4.22. Limitation on Restricted and Unrestricted Subsidiaries.
------------------------------------------------------
(a) The Board of Directors of the Company may, if no Default or Event
of Default shall have occurred and be continuing or would arise therefrom,
designate an Unrestricted Subsidiary to be a Restricted Subsidiary, provided,
however, that (i) any such redesignation shall be deemed to be an incurrence as
of the date of such redesignation by the Company and its Restricted Subsidiaries
of the Indebtedness (if any) of such redesignated Subsidiary for purposes of
Section 4.12, and (ii) unless such redesignated Subsidiary shall not have any
Indebtedness outstanding (other than Permitted Indebtedness), no such
designation shall be permitted if immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness (other than
Permitted Indebtedness) the Company could not incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.12.
(b) The Board of Directors of the Company also may, if no Default or
Event of Default shall have occurred and be continuing or would arise therefrom,
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if (i) such
designation is at that time permitted under Section 4.10, (ii) immediately after
giving effect to such designation, the Company could incur $1.00 of additional
Indebtedness (in addition to Permitted Indebtedness) pursuant to Section 4.12,
(iii) such Subsidiary meets the requirements of the definition of the term
Unrestricted Subsidiary, and (iv) any Subsidiary of such designated Restricted
Subsidiary is also designated as, and meets the requirements of, an Unrestricted
Subsidiary. Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.10 and setting forth in reasonable detail the underlying
calculations.
(c) For purposes of Section 4.10, (i) an "Investment" shall be deemed
to have been made at the time any Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
as an Unrestricted Subsidiary; (ii) at any date, the aggregate amount of all
Restricted Payments made as Investments since the Issue Date shall exclude and
be reduced by an amount (proportionate to the Company's equity interest in such
-62-
Subsidiary) equal to the net worth of any Unrestricted Subsidiary at the time
that such Unrestricted Subsidiary is designated as a Restricted Subsidiary, not
to exceed, in the case of any such redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Unrestricted Subsidiary (in each
of clause (i) and (ii), "net worth" is to be calculated based upon the fair
market value of the assets of such Subsidiary as of any such date of
designation); and (iii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
(d) If, at any time, any Unrestricted Subsidiary would fail to meet
the requirements of the definition of the term Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.12, the Company
shall be in default of such covenant).
(e) The Subsidiaries of the Company that are not designated by the
Board of Directors of the Company as Restricted or Unrestricted Subsidiaries
shall be deemed to be Restricted Subsidiaries of the Company. Notwithstanding
the foregoing, all Subsidiaries of an Unrestricted Subsidiary shall be
Unrestricted Subsidiaries.
Section 4.23. Sales of Accounts Receivable.
----------------------------
The Company may, and any of its Restricted Subsidiaries may, sell, at
any time and from time to time, all of their respective accounts receivable to
an Accounts Receivable Subsidiary; provided that (i) the cash received in each
sale is not less than 90% of the aggregate face value of the receivables sold
and the remainder of the consideration received in each such sale is a
promissory note (a "Promissory Note") which is subordinated to no Indebtedness
---------------
or obligation other than that due to the financial institution or other entity
providing the financing to the Accounts Receivable Subsidiary with respect to
such accounts receivable (a "Financier"); provided further that the Initial Sale
---------
shall include all eligible accounts receivable of the Company and/or its
Restricted Subsidiaries that shall be party to such arrangements in existence on
the date of the Initial Sale, (ii) the cash proceeds received from the Initial
Sale less reasonable and customary transaction costs will be deemed to be Net
Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii)
the Company and its Restricted Subsidiaries shall sell their accounts receivable
to the Accounts Receivable Subsidiary no less frequently than on a weekly basis.
The Company (i) shall not permit any Accounts Receivable Subsidiary to
sell any accounts receivable purchased
-63-
from the Company or any of its Restricted Subsidiaries to any other person
except on an arm's-length basis and solely for consideration in the form of cash
or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to
engage in any business or transaction other than the purchase, financing and
sale of accounts receivable of the Company and its Restricted Subsidiaries and
activities incidental thereto, (iii) shall not permit any Accounts Receivable
Subsidiary to incur Indebtedness in an amount in excess of the book value of
such Accounts Receivable Subsidiary's total assets, as determined in accordance
with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts
Receivable Subsidiary to remit to the Company, or the relevant Restricted
Subsidiary, as the case may be, as payment on the Promissory Notes, all
available cash or Cash Equivalents not held in a collection account pledged to a
Financier, to the extent not applied to pay or maintain reserves for reasonable
operating expenses of the Accounts Receivable Subsidiary or to satisfy
reasonable minimum operating capital requirements and (v) shall not, and shall
not permit any of its Restricted Subsidiaries to, sell accounts receivable to
any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with
respect to the Company and its Restricted Subsidiaries and (2) the occurrence of
any of the events specified in Section 6.1(6) with respect to such Accounts
Receivable Subsidiary.
ARTICLE V.
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, Etc.
---------------------------
(a) The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or
sell, assign, transfer, lease, convey or otherwise dispose of (or cause or
permit any Subsidiary of the Company to sell, assign, transfer, lease,
convey or otherwise dispose of) all or substantially all of the Company's
assets (determined on a consolidated basis for the Company and the
Company's Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless:
(i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, transfer, lease, conveyance or
other disposition the properties and assets of the Company and of the
Company's Subsidiaries substantially as an entirety (the "Surviving
---------
Entity") (x) shall be a corporation organized and validly existing
------
under the laws of the United States or any State thereof or the
District of Columbia and (y) shall
-64-
expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any,
and interest on all of the Notes and the performance of every covenant
of the Notes, this Indenture and the Registration Rights Agreement on
the part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may
be, (1) shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately prior to such
transaction and (2) shall be able to incur at least $1.00 of
additional Indebtedness (in addition to Permitted Indebtedness)
pursuant to Section 4.12;
(iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (i)(2)(y)
above (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and
(iv) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment, transfer,
lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating
to such transaction have been satisfied.
(b) For purposes of clause (a) above, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of
one or more Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Company.
-65-
Section 5.2. Successor Corporation Substituted.
---------------------------------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the Surviving
Entity shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture and the Notes with the same
effect as if such Surviving Entity had been named as such.
ARTICLE VI.
DEFAULT AND REMEDIES
Section 6.1. Events of Default.
-----------------
The following events are defined as "Events of Default":
(1) the failure to pay interest on any Notes or any amount
payable pursuant to any Guarantee with respect to interest when the same
becomes due and payable and the default continues for a period of 30 days
(whether or not such payment shall be prohibited by Article X or XII);
(2) the failure to pay the principal on any Notes or any amount
payable pursuant to any Guarantee (other than as provided in (1)), when
such principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer)
(whether or not such payment shall be prohibited by Article X or XII);
(3) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default continues
for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from
the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes (except in the case of a default with respect to
Section 5.1, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) there shall be a default under any Indebtedness of the
Company or any Restricted Subsidiary, whether such Indebtedness now exists
or shall hereinafter be created, if both (A) such default either (1)
results from the failure to pay any such Indebtedness at its stated final
maturity or (2) relates to an obligation other than the obligation to pay
such Indebtedness at its stated final maturity and results in the holder or
holders of such Indebtedness causing such Indebtedness to become due prior
-66-
to its stated final maturity and (B) the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in default for
failure to pay principal at stated final maturity or the maturity of which has
been so accelerated, aggregates $5,000,000 or more at any one time outstanding;
(5) one or more judgments (to the extent not covered by insurance and
as to which the insurer has not acknowledged coverage in writing) in an
aggregate amount in excess of $5,000,000 shall have been rendered against the
Company or any of its Restricted Subsidiaries and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;
(6) With respect to the Company, any Subsidiary Guarantor or any of
their Significant Subsidiaries, either:
(x) such entity (A) commences a voluntary case or
proceeding under any Bankruptcy Law with respect to itself, (B)
consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy
Law, (C) consents to the appointment of a Custodian of it or for
substantially all of its property, (D) consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against
it, (E) makes a general assignment for the benefit of its creditors,
or (F) takes any corporate action to authorize or effect any of the
foregoing; or
(y) a court of competent jurisdiction enters a judgment,
decree or order for relief in respect of such entity, which shall (A)
approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of such entity, (B)
appoint a Custodian of such entity or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs,
and in any such case, such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(7) except as permitted by this Indenture, any Guarantee shall cease
to be, or be asserted in writing by any Subsidiary Guarantor or the Company not
to be, in full force and effect, and enforceable in accordance with its terms.
-67-
Section 6.2. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in clause (6) above) shall occur and be continuing, either the Trustee or
the Holders of at least 25% in principal amount of outstanding Notes may
declare the principal of and accrued interest on all the Notes to be due
and payable by notice in writing to the Company and the Trustee specifying
the respective Event of Default and that it is a "notice of acceleration"
(the "Acceleration Notice"), and the same (i) shall become immediately due
-------------------
and payable or (ii) if there are any amounts outstanding under the Credit
Facility, shall become immediately due and payable upon the first to occur
of an acceleration under the Credit Facility or 5 Business Days after
receipt by the Company and the Representative under the Credit Facility of
such Acceleration Notice. If an Event of Default specified in clause (6)
above occurs and is continuing, then all unpaid principal of, and premium,
if any, and accrued and unpaid interest on all of the outstanding Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
(b) The Holders of a majority in principal amount of the Notes may, at
any time after a declaration of acceleration with respect to the Notes as
described in paragraph (a), rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely
because of the acceleration, (iii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration
of acceleration, has been paid, (iv) if the Company has paid the Trustee
its reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (6) of the description
above of Events of Default, the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been
cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
(c) Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture and under the TIA.
(d) In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of
-68-
avoiding payment of the premium that the Company would have had to pay if
the Company then had elected to redeem the Notes pursuant to the optional
redemption provisions of the Indenture, an equivalent premium shall also
become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs 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
the Notes prior to the First Call Date, then the premium specified herein
for redemption as of the First Call Date shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the
Notes.
Section 6.3. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.9, 6.7 and 9.2, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in clauses (1)
and (2) of Section 6.1. When a Default or Event of Default is waived, it is
cured and ceases.
Section 6.5. Control by Majority.
-------------------
Subject to Section 2.9, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it, including, without limitation, any remedies provided
for in Section 6.3. Subject to Section 7.1, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of another Holder, or that may involve the Trustee in personal
liability; provided that the Trustee may take any other
-69-
action deemed proper by the Trustee which is not inconsistent with such
direction.
Section 6.6. Limitation on Suits.
-------------------
A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or
expense to be incurred in compliance with such request;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer of satisfactory indemnity;
and
(5) during such 30-day period the Holders of a majority in
principal amount of the outstanding Notes do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with
the request.
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal and premium, if any, or
interest on such Note on or after the respective due dates set forth in such
Note (including upon acceleration thereof); provided that upon institution of
any proceeding or exercise of any remedy, such Holders provide the Trustee with
prompt written notice thereof.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
Section 6.7. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
-70-
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company, any Subsidiary Guarantor, or any other obligor on the Notes for the
whole amount of principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate per annum borne by the Notes, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings 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, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under Section 7.7. The
Company's payment obligations under this Section 6.9 shall be secured in
accordance with the provisions of Section 7.7 hereunder. 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 Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article
VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
-71-
Second: subject to Articles X and XII, to Holders for amounts due
and unpaid on the Notes for interest and premium, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest and premium, respectively;
Third: subject to Articles X and XII, to Holders for amounts due
and unpaid on the Notes for principal, ratably without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal; and
Fourth: subject to Articles X and XII, to the Company, the
Subsidiary Guarantors, or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
-72-
ARTICLE VII.
TRUSTEE
Section 7.1. Duties of Trustee.
-----------------
(a) 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 its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and the TIA and no others and
no covenants or obligations shall be implied in this Indenture against
the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificate or
opinion which by any provision hereof is specifically 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.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except
that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its
-73-
duties hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from
other assets except to the extent required by law.
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document reasonably believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to Sections 13.4 and 13.5. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless
-74-
such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(g) The Trustee may consult with counsel that is regularly engaged in
matters involving trust indentures and selected by the Trustee in good
faith, and the written opinion of such counsel as to matters of law shall
be full and complete authorization and protection from liability in respect
of any action taken, omitted or suffered by it hereunder in good faith and
in accordance with the advice or opinion of such counsel.
(h) The Trustee shall not be charged with knowledge of any Defaults or
Events of Default unless either (1) a Trust Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (2) written
notice of such Default or Event of Default shall have been given to the
Trustee by any Holder or by the Company or any other obligor on the Notes
or any holder of Senior Indebtedness or Guarantor Senior Indebtedness or
any representative thereof.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
Section 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default becomes known to the Trustee. Except in the case of a Default or an
Event of Default in payment of principal of, or interest on, any Note, the
Trustee may withhold the notice if and so long as its Board of Directors, the
executive committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders.
-75-
Section 7.6. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 1, the Trustee shall, to the extent
that any of the events described in TIA (S) 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as
of such date that complies with TIA (S) 313(a). The Trustee also shall comply
with TIA (S)(S) 313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any, on
which the Notes are listed.
The Company shall promptly notify the Trustee in writing if the Notes
become listed on any stock exchange and the Trustee shall comply with TIA (S)
313(d).
Section 7.7. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable, documented out-of-pocket
expenses incurred or made by it in connection with the performance of its duties
under this Indenture. Such expenses shall include the reasonable, documented
fees and expenses of the Trustee's agents and counsel.
The Company hereby agrees to indemnify the Trustee and its agents,
employees, officers, directors and shareholders for, and hold it harmless
against, any loss, liability or expense incurred by it (except for such actions
to the extent caused by any negligence, bad faith or willful misconduct on its
part), arising out of or in connection with the administration of this trust
including the reasonable, documented costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its rights, powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall provide reasonable
cooperation and may participate at the Company's expense in the defense.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable, documented fees and expenses
of such counsel; provided that the Company shall not be required to pay such
fees and expenses if it assumes the Trustee's defense, there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee and no Default or Event of Default has
occurred and is continuing. The Company need not pay for any settlement made
-76-
without its written consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) occurs, such expenses and the compensation
for such services are intended to constitute expenses of administration under
any Bankruptcy Law.
The obligations of the Company under this Section 7.7 and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's Obligations pursuant to Article VIII or the
termination of this Indenture.
Section 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing, such
resignation to be effective upon the appointment of a successor Trustee. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee in writing and may
appoint a successor Trustee with the Company's consent which consent shall not
be unreasonably withheld. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee 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 notify each Holder of such
event and 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 Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company, which if no Default or Event of Default has occurred
and is continuing, shall be
-77-
subject to the approval of the Company, not to be unreasonably withheld or
delayed.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
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 outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation without any further act shall, if such resulting,
surviving or transferee corporation is otherwise eligible hereunder, be the
successor Trustee; provided that such corporation shall be otherwise qualified
and eligible under this Article VII.
Section 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA (S) 310(a)(2). The Trustee shall
comply with TIA (S) 310(b); provided, however, that there shall be excluded from
the operation of TIA (S) 310(b)(1) any indenture or indentures under
-78-
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA (S) 310(b)(1) are met.
Section 7.11. Preferential Collection of
Claims Against Company.
----------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1. Termination of the
Company's Obligations.
---------------------
The Company may terminate its obligations under the Notes and this
Indenture, except those obligations referred to in the penultimate paragraph of
this Section 8.1, if all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes which have been replaced or paid or Notes
for whose payment U.S. Legal Tender has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 8.5) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(a) either (i) pursuant to Article III, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Notes under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Notes have otherwise
become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Notes to
maturity or redemption; provided that the Trustee shall have been
irrevocably instructed to apply such U.S. Legal Tender to the payment of
said principal, premium, if any, and interest with respect to the Notes
and, provided, further, that from and after the time of deposit, the money
deposited shall not be subject to the rights of holders of Senior
-79-
Indebtedness pursuant to the provisions of Article X;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligations under
the Notes and this Indenture have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and discharge does not
result in a default under the Credit Facility (if then in effect) or any
other agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2, 7.7, 8.5 and 8.6 shall survive until the
Notes are no longer outstanding pursuant to the last paragraph of Section 2.8.
After the Notes are no longer outstanding, the Company's obligations in Sections
7.7, 8.5 and 8.6 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and the Subsidiary
Guarantors' obligations under the Notes, the Guarantees and this Indenture
except for those surviving obligations specified above.
Section 8.2. Legal Defeasance and
Covenant Defeasance.
-------------------
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph
(b) or (c) below be applied to all outstanding Notes upon compliance with
the conditions set forth in Section 8.3.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company and the Subsidiary
Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 8.3, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
----------------
Defeasance means that
-80-
the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.4 hereof
and the other Sections of this Indenture referred to in (i) and (ii) below,
and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), and Holders of
the Notes and any amounts deposited under Section 8.3 hereof shall cease to
be subject to any obligations to, or the rights of, any holder of Senior
Indebtedness or Guarantor Senior Indebtedness under Article X or XII, as
the case may be, or otherwise, except for the following provisions, which
shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive solely from the trust
fund described in Section 8.4 hereof, and as more fully set forth in such
Section, payments in respect of the principal of and interest on such Notes
when such payments are due, (ii) the Company's obligations with respect to
such Notes under Article II and Section 4.2 hereof, (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (iv) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its
option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.3 hereof, be released
from its obligations under Section 4.5, Sections 4.10 through 4.23 and
Article V hereof with respect to the outstanding Notes on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
--------
Defeasance"), and the Notes shall thereafter be deemed not "outstanding"
----------
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Notes shall not be deemed
outstanding for accounting purposes) and Holders of the Notes and any
amounts deposited under Section 8.3 hereof shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Indebtedness or
Guarantor Senior Indebtedness under Article X or Article XII or
otherwise. For this purpose, such Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of
any reference elsewhere herein to any such covenant or by reason
-81-
of any reference in any such covenant to any other provision herein or in
any other document and such omission to comply shall not constitute a
Default or an Event or Default under Section 6.1(3) hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under
paragraph (a) hereof of the option applicable to this paragraph (c),
subject to the satisfaction of the conditions set forth in Section 8.3
hereof, those events described in Section 6.1 (except those events
described in Section 6.1(1), (2), and (6)) shall not constitute Events of
Default.
Section 8.3. Conditions to Legal Defeasance
or Covenant Defeasance.
----------------------
The following shall be the conditions to the application of either
Section 8.2(b) or 8.2(c) hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient (without reinvestment), in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.2(b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of the Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion of counsel shall confirm
that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(c) in the case of an election under Section 8.2(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders will not recognize income, gain or loss for federal income tax
-82-
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) No Default or Event of Default shall have occurred and be
continuing on the date of the deposit specified in paragraph (a) or insofar
as an Event of Default specified in Section 6.1(6) is concerned, at any
time in the period ending on the 91st day after the date of the deposit
specified in paragraph (a);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of or constitute a default under this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any
rights of holders of Senior Indebtedness, including, without limitation,
those arising under the Indenture and (B) after the 91st day following the
date of deposit specified in paragraph (a), the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
Section 8.4. Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Article VIII, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Notes. The Trustee shall be under no obligation to invest said
U.S. Legal Tender or U.S. Government Obligations except as it may agree with the
Company.
The Company shall pay and indemnify the Trustee against
-83-
any tax, fee or other charge imposed on or assessed against the U.S. Legal
Tender or U.S. Government Obligations deposited pursuant to Section 8.3 hereof
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Section 8.5. Repayment to the Company
or the Subsidiary Guarantors.
----------------------------
(a) Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company, or if deposited with the
Trustee by any Subsidiary Guarantor, to such Subsidiary Guarantor, from
time to time upon request any U.S. Legal Tender or U.S. Government
Obligations held by it as provided in Section 8.3 hereof which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are
in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance.
(b) The Trustee and the Paying Agent shall pay to the Company, or if
deposited with the Trustee by any Subsidiary Guarantor, to such Subsidiary
Guarantor, upon request any money held by them for the payment of principal
or interest that remains unclaimed for two years after the date due;
provided that the Trustee or such Paying Agent, before being required to
make any payment may at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail
to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein which shall be at least
30 days from the date of such publication or mailing any unclaimed balance
of such money then remaining will be repaid to the Company or a Subsidiary
Guarantor. After payment to the Company or a Subsidiary Guarantor, as the
case may be, Noteholders entitled to such money must look to the Company
for payment as general creditors unless an applicable law designates
another Person.
Section 8.6. Satisfaction and Discharge.
--------------------------
This Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Notes, as expressly provided for in the Indenture) as to all outstanding
Notes when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust)
-84-
have been delivered to the Trustee for cancellation or (b) all Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Notes to
the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be; (ii) the Company has paid all other sums payable
under the Indenture by the Company; and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel stating that all
conditions precedent under the Indenture relating to the satisfaction and
discharge of the Indenture have been complied with.
Section 8.7. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Article VIII by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and each Subsidiary Guarantor's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Article VIII until such time as the Trustee or
Paying Agent is permitted to apply all such U.S. Legal Tender or U.S. Government
Obligations in accordance with Article VIII; provided that if the Company or any
Subsidiary Guarantor, as the case may be, has made any payment of interest on or
principal of any Notes because of the reinstatement of its obligations, the
Company or any Subsidiary Guarantor, as the case may be, shall be subrogated to
the rights of the Holders of such Notes to receive such payment from the U.S.
Legal Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, the Subsidiary
Guarantors, and the Trustee, together, may amend or supplement this Indenture,
the Notes or any Guarantee without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided
that such amendment or supplement does not adversely affect the rights
of any Holder;
-85-
(2) to comply with Article V;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(4) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
or
(5) to make any change that would provide any additional benefit
or rights to the Holders or that does not adversely affect the rights
of any Holder;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section 9.1, and such amendment or supplement does not in
the opinion of the Trustee, adversely affect the rights of any of the Holders in
any material respect. In formulating its opinion on such matters, the Trustee
will be entitled to rely on such evidence as it deems appropriate, including,
without limitation, solely on an Opinion of Counsel.
Section 9.2. With Consent of Holders.
-----------------------
Subject to Section 6.7, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture, the Notes or any
Guarantee without notice to any other Holders. Subject to Section 6.7, the
Holder or Holders of a majority in aggregate principal amount of the outstanding
Notes may waive compliance by the Company with any provision of this Indenture
or the Notes without notice to any other Holder. No amendment, supplement or
waiver, including a waiver pursuant to Section 6.4, shall, without the consent
of each Holder of each Note affected thereby:
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Notes or any Guarantee;
(2) reduce the rate of or change or have the effect
of changing the time for payment of interest, including defaulted
interest, on any Notes;
(3) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on which
any Notes may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
(4) make any Notes payable in money other than
-86-
that stated in the Notes;
(5) make any change in the provisions of this Indenture
protecting the right of each Holder to receive payment of principal of
and interest on such Note on or after the due date thereof or to bring
suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;
(6) amend, change or modify in any material respect the
obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control or make and consummate a Net
Proceeds Offer with respect to any Asset Sale or modify any of the
provisions or definitions with respect thereto;
(7) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the
Notes or the Guarantees in a manner which adversely affects the
Holders; or
(8) release any Subsidiary Guarantor from any of its obligations
under the Guarantee other than in accordance with the terms of this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
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.
Section 9.3. Effect on Senior Indebtedness.
-----------------------------
No amendment, supplement or waiver of this Indenture shall adversely
affect the rights of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness, if any (including their rights under Article X or Article XII of
this Indenture), without the consent of such holder.
Section 9.4. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
Section 9.5. Revocation and Effect of Consents.
---------------------------------
-87-
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
written notice to the Trustee or the Company received before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (8) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
Section 9.6. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may, at the written direction of the Company, require the Holder of the
Note to deliver it to the Trustee. The Trustee at the written direction of the
Company may place an appropriate notation on the Note regarding the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such notation
or exchange shall be made at the sole cost and expense of the Company. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment,
-88-
supplement or waiver.
Section 9.7. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided that the Trustee may, but shall
not be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under this Indenture.
The Trustee shall be entitled to receive, if requested, an indemnity reasonably
satisfactory to it and to receive, and shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate each stating that the
execution of any amendment, supplement or waiver authorized pursuant to this
Article IX is authorized or permitted by this Indenture.
ARTICLE X.
SUBORDINATION
Section 10.1. Notes Subordinated to
Senior Indebtedness.
-------------------
The Company covenants and agrees and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article X; and the
Trustee and each person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Notes by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior Payment in Full of all Obligations with respect to any Senior
Indebtedness, whether outstanding on the Issue Date or thereafter incurred; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Senior Indebtedness, and that each holder of Senior Indebtedness
whether now outstanding or hereinafter created, incurred, assumed or guaranteed
shall be deemed to have acquired Senior Indebtedness in reliance upon the
covenants and provisions contained in this Indenture and the Notes.
Section 10.2. No Payment on Notes in
Certain Circumstances.
---------------------
(a) If either (i) any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or
otherwise, of any principal of, interest on, reimbursement for drawings
under letters of credit issued as part of, or regularly accruing fees with
respect to, any Senior Indebtedness, or (ii) any default occurs and is
continuing with respect to any Designated Senior Indebtedness resulting in
the acceleration of the maturity of all or any portion of any Designated
Senior
-89-
Indebtedness, no payment of any kind or character (other than Permitted
Insolvency Payments) shall be made by the Company or any of its
Subsidiaries with respect to any Obligations on the Notes or to acquire any
of the Notes for cash or property. In addition, if any other event of
default occurs and is continuing with respect to any Designated Senior
Indebtedness, as such event of default is defined in the instrument
creating or evidencing such Designated Senior Indebtedness, permitting the
holders of such Designated Senior Indebtedness then outstanding to
accelerate the maturity thereof and if the Representative for the
respective issue of Designated Senior Indebtedness gives written notice of
the event of default to the Trustee (a "Default Notice"), then, unless and
--------------
until all events of default have been cured or waived or have ceased to
exist or the Trustee receives notice from the Representative for the
respective issue of Designated Senior Indebtedness terminating the Blockage
Period (as defined below), during the 179 days after the delivery of such
Default Notice (the "Blockage Period"), neither the Company nor any of its
---------------
Subsidiaries shall: (x) make any payment of any kind or character (other
than Permitted Insolvency Payments) with respect to any Obligations on the
Notes or (y) acquire any of the Notes for cash or property (other than in
exchange for Permitted Insolvency Payments). Notwithstanding anything
herein to the contrary, in no event shall a Blockage Period extend beyond
179 days from the date of the commencement of the Blockage Period and only
one such Blockage Period may be commenced within any 365 consecutive days.
No event of default which existed or was continuing on the date of the
commencement of any Blockage Period with respect to the Designated Senior
Indebtedness shall be, or be made, the basis for commencement of a second
Blockage Period by the Representative of such Designated Senior
Indebtedness whether or not within a period of 365 consecutive days, unless
such event of default shall have been cured or waived for a period of not
less than 90 consecutive days (it being acknowledged that any subsequent
action, or any breach of any financial covenants for a period commencing
after the date of commencement of such Blockage Period that, in either
case, would give rise to an event of default pursuant to any provisions
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is
prohibited by Section 10.2(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their respective
Representatives, as their respective interests may appear for application
to the
-90-
payment of the Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Indebtedness. The Trustee shall be entitled to rely on information
regarding amounts then due and owing on the Senior Indebtedness, if any,
received from the holders of Senior Indebtedness (or their Representatives)
or, if such information is not received from such holders or their
Representatives, from the Company and only amounts included in the
information provided to the Trustee shall be paid to the holders of Senior
Indebtedness.
(c) Nothing contained in this Article X shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.2 or to pursue any rights or
remedies hereunder.
Section 10.3. Payment Over of Proceeds
Upon Dissolution, Etc.
---------------------
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors in
an Insolvency or Liquidation Proceeding relating to the Company or its
property, whether voluntary or involuntary, all Obligations due upon all
Senior Indebtedness shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Indebtedness, by the Company or any of its Subsidiaries,
before any payment or distribution of any kind or character is made on
account of any Obligations on the Notes, or for the acquisition, by the
Company or any of its Subsidiaries, of any of the Notes for cash or
property, except for Permitted Insolvency Payments. Upon any such
Insolvency or Liquidation Proceeding, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (other than Permitted Insolvency Payments), to which the Holders
of the Notes or the Trustee would be entitled shall be paid by the Company
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, or by the Holders of the
Notes or by the Trustee if received by them, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the amounts
of Senior Indebtedness held by such holders) or their Representatives, as
their interests may appear, for application to the payment of the Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been
paid in full, after giving effect to any concurrent payment, distribution
or provision therefor to or for the holders of Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of
-91-
security or enforcement of any right of setoff or otherwise) is declared to
be fraudulent or preferential, set aside or required to be paid to any
Custodian under any Bankruptcy Law, then, if such payment is recovered by,
or paid over to, such Custodian the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such
payment or distribution is prohibited by Section 10.3(a), such payment or
distribution shall be held in trust for the benefit of, and shall be paid
over or delivered to, the holders of Senior Indebtedness (pro rata to such
holders on the basis of the respective amount of Senior Indebtedness held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of Senior Indebtedness remaining
unpaid until all such Senior Indebtedness has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior
Indebtedness.
Section 10.4. Payments May Be Paid Prior
to Dissolution.
--------------
Nothing contained in this Article X or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.2 and 10.3, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual knowledge
of the Trustee that a given payment would be prohibited by Section 10.2 or 10.3,
the application by the Trustee of any moneys deposited with it for the purpose
of making such payments of principal of and interest on the Notes to the Holders
entitled thereto, unless at least one Business Day prior to the date upon which
such payment would otherwise become due and payable, the Trustee shall have
received the written notice provided for in Section 10.2(a) or in Section 10.7
(provided that, notwithstanding the foregoing, such application shall otherwise
be subject to the provisions of the first sentence of Section 10.2(a) and
Section 10.3). The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company.
Section 10.5. Subrogation.
-----------
Subject to the payment in full in cash or Cash
-92-
Equivalents of all Senior Indebtedness, the Holders of the Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the Notes shall be paid in full;
and, for the purposes of such subrogation, no such payments or distributions to
the holders of the Senior Indebtedness by or on behalf of the Company or by or
on behalf of the Holders by virtue of this Article X which otherwise would have
been made to the Holders shall, as between the Company and the Holders of the
Notes, be deemed to be a payment by the Company to or on account of the Senior
Indebtedness, it being understood that the provisions of this Article X are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article X shall have been
applied, pursuant to the provisions of this Article X, to the payment of amounts
payable under the Senior Indebtedness, then the Holders shall be entitled to
receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount sufficient to pay all amounts payable under or in respect of the Senior
Indebtedness in full in cash or Cash Equivalents.
Section 10.6. Obligations of the Company
Unconditional.
-------------
Nothing any contained in this Article X or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Notes, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders of the Notes the principal of and any interest on the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Holder of any
Note or the Trustee on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Section 10.7. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article X. Regardless
-93-
of anything to the contrary contained in this Article X or elsewhere in this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any default or event of default with respect to any Senior Indebtedness or of
any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing from
the Company, or from a holder of Senior Indebtedness or a Representative
therefor, and, prior to the receipt of any such written notice, the Trustee
shall be entitled to assume (in the absence of actual knowledge to the contrary)
that no such facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article X and, if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
Section 10.8. Reliance on Judicial Order or
Certificate of Liquidating Agent.
---------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article X, the Trustee, subject to the provisions of Article VII hereof,
and the Holders of the Notes shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which Insolvency or Liquidation
Proceedings are pending, or upon a certificate of the Custodian or other person
making such payment or distribution, delivered to the Trustee or the holders of
the Notes, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X.
Section 10.9. Trustee's Relation to
Senior Indebtedness.
-------------------
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article X with respect to any
Senior Indebtedness which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
-94-
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article X, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
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 Indebtedness 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 Indebtedness shall be entitled by virtue of this
Article, except if such payment is made as a result of willful misconduct or
gross negligence of the Trustee.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Indebtedness, the distribution may be made and the notice given
to their Representatives, if any.
Section 10.10. Subordination Rights Not Impaired
by Acts or Omissions of the Company
or Holders of Senior Indebtedness.
---------------------------------
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article X or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Indebtedness,
do any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness, or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the payment or
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
Section 10.11. Noteholders Authorize Trustee To
Effectuate Subordination of Notes.
---------------------------------
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to
-95-
take such action as may be necessary or appropriate to effectuate, as between
the holders of Senior Indebtedness and the Holders of Notes, the subordination
provided in this Article X, and appoints the Trustee its attorney-in-fact for
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business or assets of the Company, the filing of a claim for the unpaid balance
of its or his Notes and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holders any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
Section 10.12. This Article X Not To
Prevent Events of Default.
-------------------------
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article X shall not be construed
as preventing the occurrence of an Event of Default.
Section 10.13. Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article X shall apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE XI.
GUARANTEES
Section 11.1. Unconditional Guarantee.
-----------------------
Each Subsidiary Guarantor fully and unconditionally, jointly and
severally, Guarantees (such guarantee to be referred to herein as the
"Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
---------
and to the Trustee and its successors and assigns, the Notes or the obligations
of the Company hereunder or thereunder, that: (i) the principal of and
-96-
interest on the Notes shall be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, to the
extent lawful, of the Notes and all other Obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof and (ii) in case
of any extension of time of payment or renewal of any Notes or of any such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 11.4. Each Subsidiary Guarantor agrees that its Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
shall not be discharged except by complete performance of the Obligations
contained in the Notes, this Indenture and in this Guarantee. If any Noteholder
or the Trustee is required by any court or otherwise to return to the Company,
any Subsidiary Guarantor, or any Custodian acting in relation to the Company or
any Subsidiary Guarantor, any amount paid by the Company or any Subsidiary
Guarantor to the Trustee or such Noteholder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect as to such
amount only. Each Subsidiary Guarantor further agrees that as between each
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Obligations Guaranteed hereby may be
accelerated as provided in Article VI for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations Guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article VI, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Guarantee.
Section 11.2. Severability.
------------
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way
-97-
be affected or impaired thereby.
Section 11.3. Release of a Subsidiary Guarantor.
---------------------------------
(a) In the event of either (a) a sale or other disposition of all or
substantially all of the assets of any Subsidiary Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all
of the Capital Stock of any Subsidiary Guarantor, or (b) in the event that
the Company designates a Subsidiary Guarantor to be an Unrestricted
Subsidiary, or such Subsidiary Guarantor ceases to be a Subsidiary of the
Company, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of
the Capital Stock of such Subsidiary Guarantor to a Person other than the
Company or a Subsidiary Guarantor or any such designation) or the entity
acquiring the property (in the event of a sale or other disposition of all
or substantially all of the assets of such Subsidiary Guarantor) shall be
released and relieved of any obligations under its Guarantee; provided that
the Net Cash Proceeds of such sale or other disposition are applied in
accordance with Section 4.15 or 4.16, as applicable.
(b) In the case of a sale, assignment, lease, transfer, conveyance or
other disposition of all or substantially all of the assets of a Subsidiary
Guarantor, upon the assumption provided for in Section 11.5(b), such
Subsidiary Guarantor shall be discharged from all further liability and
obligation under the Indenture.
(c) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a written request by the Company accompanied
by an Officers' Certificate certifying as to the compliance with this
Section 11.3 and the other provisions of this Indenture.
(d) Any Subsidiary Guarantor not so released remains liable for the
full amount of principal of and interest on the Notes as provided in this
Article XI.
Section 11.4. Limitation of Subsidiary
Guarantor's Liability.
---------------------
Each Subsidiary Guarantor and by its acceptance hereof each Holder
hereby confirms that it is the intention of all such parties that the Guarantee
by such Subsidiary Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Holders and each such Subsidiary Guarantor hereby irrevocably agree that the
Obligations of such Subsidiary Guarantor under its Guarantee shall be limited to
the maximum
-98-
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (including, without limitation, any
Obligations under the Credit Facility) and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Guarantee or pursuant to Section 11.6, result in the Obligations of such
Subsidiary Guarantor under its Guarantee not constituting such fraudulent
transfer or conveyance.
Section 11.5. Subsidiary Guarantors May
Consolidate, Etc., on Certain Terms.
-----------------------------------
(a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person),
another corporation, Person or entity whether or not affiliated with such
Subsidiary Guarantor unless, either:
(x) such consolidation or merger constitutes an Asset Sale in
compliance with Sections 4.16 and 4.17 which is subject to the
provisions of Section 11.3(a); or
(y) (i) the Person formed by or surviving any such consolidation
or merger (if other than such Subsidiary Guarantor) assumes all the
Obligations of such Subsidiary Guarantor under the Notes, the
Guarantee, the Indenture, and the Registration Rights Agreement
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee; (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists; (iii) such
Subsidiary Guarantor, or any Person formed by or surviving any such
consolidation or merger, would have Consolidated Net Worth
(immediately after giving effect to such transaction), equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor
immediately preceding the transaction; and (iv) the Company would be
permitted to incur at least $1.00 of additional Indebtedness (in
addition to Permitted Indebtedness) pursuant to Section 4.12(a).
(b) The requirements of Section 11.5(a)(y)(i), (iii) and (iv) shall
not apply in the case of a consolidation with or merger with or into the
Company or another Subsidiary Guarantor.
Section 11.6. Contribution.
------------
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under this
-----------------
-99-
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Subsidiary Guarantors in a pro rata amount based on the Adjusted Net
Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's Obligations with respect to this Guarantee.
Section 11.7. Waiver of Subrogation.
---------------------
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's Obligations under this Guarantee and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Subsidiary Guarantor in violation of the preceding sentence
and the Notes shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Notes, and shall forthwith
be paid to the Trustee for the benefit of such Holders to be credited and
applied upon the Notes, whether matured or unmatured, in accordance with the
terms of this Indenture. Each Subsidiary Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.7 is knowingly made in contemplation of such benefits.
Section 11.8. Execution of Guarantee.
----------------------
To evidence their guarantee to the Noteholders specified in Section
11.1, the Subsidiary Guarantors hereby agree to execute the Guarantee in
substantially the form of Exhibit A recited to be endorsed on Note ordered to be
---------
authenticated and delivered by the Trustee. Each Subsidiary Guarantor hereby
agrees that its Guarantee set forth in Section 11.1 shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of
such Guarantee. Each such Guarantee shall be signed on behalf of each Subsidiary
Guarantor by two Officers, or an Officer and an Assistant Secretary or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Guarantee prior to the authentication of the Note
on which it is endorsed, and
-100-
the delivery of such Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of such Guarantee on behalf of such
Subsidiary Guarantor. Such signatures upon the Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such officer who shall have signed
the Guarantee shall cease to be such officer before the Note on which such
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Note nevertheless may be authenticated and
delivered or disposed of as though the person who signed the Guarantee had not
ceased to be such officer of the Subsidiary Guarantor.
ARTICLE XII.
SUBORDINATION OF GUARANTEES
Section 12.1. Subordination of Guarantee.
--------------------------
Each Subsidiary Guarantor covenants and agrees and the Trustee and
each Holder of the Guarantees, by its acceptance thereof, likewise covenants and
agrees, that all Guarantees shall be issued subject to the provisions of this
Article XII; and the Trustee and each person holding any Guarantee, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that the payment of all Obligations on the Guarantees by such Subsidiary
shall, to the extent and in the manner herein set forth, be subordinated and
junior in right of payment to the prior Payment in Full of all Obligations with
respect to any Guarantor Senior Indebtedness of such Subsidiary Guarantor,
whether outstanding on the Issue Date or thereafter incurred; that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Guarantor Senior Indebtedness, and that each holder of Guarantor
Senior Indebtedness whether now outstanding or hereinafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Guarantor Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Notes.
Section 12.2. No Payment on Guarantees in
Certain Circumstances.
--------------------------------
(a) If either (i) any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or
otherwise, of any principal of, interest on, reimbursement for drawings
under letters of credit issued as part of, or regularly accruing fees with
respect to, any Guarantor Senior Indebtedness or any Senior Indebtedness
guaranteed by a Subsidiary Guarantor (which guarantee constitutes Guarantor
Senior Indebtedness of such Subsidiary Guarantor), or (ii) any default
occurs and is continuing with respect to any Guarantor Designated Senior
Indebtedness resulting in the acceleration of the maturity
-101-
of all or any portion of any Guarantor Designated Senior Indebtedness, no
payment of any kind or character (other than Permitted Insolvency Payments)
shall be made by such Subsidiary Guarantor or any of its Subsidiaries with
respect to any Obligations on its Guarantee or to acquire any of the Notes
or the related Guarantee for cash or property. In addition, if any other
event of default occurs and is continuing with respect to any Guarantor
Designated Senior Indebtedness, as such event of default is defined in the
instrument creating or evidencing such Guarantor Designated Senior
Indebtedness, permitting the holders of such Guarantor Designated Senior
Indebtedness then outstanding to accelerate the maturity thereof and if the
Representative for the respective issue of Guarantor Designated Senior
Indebtedness gives written notice of the event of default to the Trustee (a
"Guarantor Default Notice"), then, unless and until all events of default
------------------------
have been cured or waived or have ceased to exist or the Trustee receives
notice from the Representative for the respective issue of Guarantor
Designated Senior Indebtedness terminating the Guarantor Blockage Period
(as defined below), during the 179 days after the delivery of such
Guarantor Default Notice (the "Guarantor Blockage Period"), neither the
-------------------------
Subsidiary Guarantor nor any of its Subsidiaries shall: (x) make any
payment of any kind or character (other than Permitted Insolvency Payments)
with respect to any Obligations on the Notes or its Guarantee or (y)
acquire any of the Notes or the related Guarantee for cash or property
(other than in exchange for Permitted Insolvency Payments). Notwithstanding
anything herein to the contrary, in no event shall a Guarantor Blockage
Period extend beyond 179 days from the date of the commencement of the
Guarantor Blockage Period and only one such Guarantor Blockage Period may
be commenced within any 365 consecutive days. No event of default which
existed or was continuing on the date of the commencement of any Guarantor
Blockage Period with respect to the Guarantor Designated Senior
Indebtedness shall be, or be made, the basis for commencement of a second
Guarantor Blockage Period by the Representative of such Guarantor
Designated Senior Indebtedness whether or not within a period of 365
consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Guarantor Blockage Period that, in either case, would give rise to an event
of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of
default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is
prohibited by Section 12.2(a), such
-102-
payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Indebtedness (pro rata to
such holders on the basis of the respective amount of Guarantor Senior
Indebtedness held by such holders) or their respective Representatives, as
their respective interests may appear for application to the payment of the
Guarantor Senior Indebtedness remaining unpaid until all such Guarantor
Senior Indebtedness has been paid in full, after giving effect to any
concurrent payment, distribution or provision therefor to or for the
holders of Guarantor Senior Indebtedness. The Trustee shall be entitled to
rely on information regarding amounts then due and owing on the Guarantor
Senior Indebtedness, if any, received from the holders of Guarantor Senior
Indebtedness (or their Representatives) or, if such information is not
received from such holders or their Representatives, from such Subsidiary
Guarantor and only amounts included in the information provided to the
Trustee shall be paid to the holders of Guarantor Senior Indebtedness.
(c) Nothing contained in this Article XII shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.2 or to pursue any rights or
remedies hereunder.
Section 12.3. Payment Over of Proceeds
Upon Dissolution, Etc.
------------------------
(a) Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or
securities, to creditors in an Insolvency or Liquidation Proceeding
relating to the Subsidiary Guarantor or its property, whether voluntary or
involuntary, all Obligations due upon all Guarantor Senior Indebtedness
shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Guarantor Senior
Indebtedness, by the Subsidiary Guarantor or any of its Subsidiaries,
before any payment or distribution of any kind or character is made on
account of any Obligations on the Notes or the related Guarantee, or for
the acquisition, by the Subsidiary Guarantor or any of its Subsidiaries, of
any of the Notes or the related Guarantees for cash or property, except for
Permitted Insolvency Payments. Upon any such Insolvency or Liquidation
Proceeding, any payment or distribution of assets of the Subsidiary
Guarantor of any kind or character, whether in cash, property or securities
(other than Permitted Insolvency Payments), to which the Holders of the
Notes or the Trustee would be entitled shall be paid by the Subsidiary
Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, or by the
Holders of the Notes or by the Trustee if received by them, directly to the
holders of Guarantor Senior Indebtedness (pro rata to
-103-
such holders on the basis of the amounts of Guarantor Senior Indebtedness
held by such holders) or their Representatives, as their interests may
appear, for application to the payment of the Guarantor Senior Indebtedness
remaining unpaid until all such Guarantor Senior Indebtedness has been paid
in full, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Guarantor Senior Indebtedness.
(b) To the extent any payment of Guarantor Senior Indebtedness
(whether by or on behalf of such Subsidiary Guarantor, as proceeds of
security or enforcement of any right of setoff or otherwise) is declared to
be fraudulent or preferential, set aside or required to be paid to any
Custodian, under any Bankruptcy Law, then, if such payment is recovered by,
or paid over to such Custodian, the Guarantor Senior Indebtedness or part
thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of a Subsidiary Guarantor of any kind or character,
whether in cash, property or securities, shall be received by any Holder
when such payment or distribution is prohibited by Section 12.3(a), such
payment or distribution shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective
amount of Guarantor Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Guarantor Senior Indebtedness may
have been issued, as their respective interests may appear, for application
to the payment of Guarantor Senior Indebtedness remaining unpaid until all
such Guarantor Senior Indebtedness has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior
Indebtedness.
Section 12.4. Payments May Be Paid
Prior to Dissolution.
--------------------
Nothing contained in this Article XII or elsewhere in this Indenture
shall prevent (i) any Subsidiary Guarantor, except under the conditions
described in Sections 12.2 and 12.3, from making payments at any time for the
purpose of making payments of principal of and interest on the Notes, or from
depositing with the Trustee any moneys for such payments, or (ii) in the absence
of actual knowledge by the Trustee that a given payment would be prohibited by
Section 12.2 or 12.3, the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of and interest on
the Notes to the Holders entitled thereto, unless at least one Business Day
prior
-104-
to the date upon which such payment would otherwise become due and payable, the
Trustee shall have received the written notice provided for in Section 12.2(a)
or in Section 12.7 (provided that, notwithstanding the foregoing, such
application shall otherwise be subject to the provisions of the first sentence
of Section 12.2(a) and Section 12.3). Each Subsidiary Guarantor shall give
prompt written notice to the Trustee of any dissolution, winding-up, liquidation
or reorganization of such Subsidiary Guarantor.
Section 12.5. Subrogation.
-----------
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness, the Holders of the Notes shall be subrogated to
the rights of the holders of Guarantor Senior Indebtedness to receive payments
or distributions of cash, property or securities of such Subsidiary Guarantor
applicable to the Guarantor Senior Indebtedness of such Subsidiary Guarantor
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Guarantor
Senior Indebtedness by or on behalf of such Subsidiary Guarantor or by or on
behalf of the Holders by virtue of this Article XII which otherwise would have
been made to the Holders shall, as between the Subsidiary Guarantor and the
Holders of the Notes, be deemed to be a payment by such Subsidiary Guarantor to
or on account of the Guarantor Senior Indebtedness, it being understood that the
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Guarantor Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under the Guarantor Senior Indebtedness, then the Holders shall
be entitled to receive from the holders of such Guarantor Senior Indebtedness
any payments or distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of the Guarantor Senior Indebtedness in full in cash or Cash
Equivalents.
Section 12.6. Obligations of Each Subsidiary Guarantor
Unconditional.
-------------
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Notes or the Guarantees is intended to or shall impair, as among any
Subsidiary Guarantor, its creditors other than the holders of Guarantor Senior
Indebtedness, and the Holders of the Notes, the obligation of such Subsidiary
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Notes the principal of and any interest on the Notes as and when the same shall
become due and payable in
-105-
accordance with the terms of the Guarantees, or is intended to or shall affect
the relative rights of the Holders of the Notes and creditors of any Subsidiary
Guarantor other than the holders of Guarantor Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, in respect of cash,
property or securities of any Subsidiary Guarantor received upon the exercise of
any such remedy.
Section 12.7. Notice to Trustee.
-----------------
The Company or any Subsidiary Guarantor shall give prompt written
notice to the Trustee of any fact known to the Company or any such Subsidiary
Guarantor which would prohibit the making of any payment to or by the Trustee in
respect of the Guarantees pursuant to the provisions of this Article XII.
Regardless of anything to the contrary contained in this Article XII or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Guarantor
Senior Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company or a Subsidiary Guarantor, or from a holder
of Guarantor Senior Indebtedness or a Representative therefor, and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume (in
the absence of actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article XII, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amounts of
Guarantor Senior Indebtedness held by such person, the extent to which such
person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such person under this Article XII, and if such
evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Section 12.8. Reliance on Judicial Order or
Certificate of Liquidating Agent.
--------------------------------
Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article XII, the Trustee, subject to the provisions of
Article VII hereof, and the Holders of the Notes shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
Insolvency or Liquidation Proceedings are pending, or upon
-106-
certificate of the Custodian or other person making such payment or
distribution, delivered to the Trustee or the holders of the Notes, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Guarantor Senior Indebtedness and other
Indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII.
Section 12.9. Trustee's Relation to Guarantor
Senior Indebtedness.
-------------------
The Trustee and any agent of any Subsidiary Guarantor or the Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Guarantor Senior Indebtedness which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Guarantor Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XII, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and shall not be liable to any such holders if the Trustee shall
pay over or distribute to or on behalf of Holders or any such Subsidiary
Guarantor or any other person money or assets to which any holders of Guarantor
Senior Indebtedness shall be entitled by virtue of this Article, except if such
payment is made as a result of willful misconduct or gross negligence of the
Trustee.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Indebtedness, the distribution may be made and the
notice given to their Representatives, if any.
Section 12.10. Subordination Rights Not Impaired
by Acts or Omissions of a Subsidiary
Guarantor or Holders of Guarantor
Senior Indebtedness.
-------------------
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Subsidiary Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by such Subsidiary Guarantor with the terms
of this Indenture, regardless of any knowledge thereof which any such holder may
have or
-107-
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders of the Notes to the holders of the Guarantor Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Guarantor Senior Indebtedness, or otherwise amend or supplement in any manner
Guarantor Senior Indebtedness, or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Indebtedness; (iii) release any person
liable in any manner for the payment or collection of Guarantor Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
such Subsidiary Guarantor and any other person.
Section 12.11. Noteholders Authorize Trustee To
Effectuate Subordination of Guarantees.
--------------------------------------
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Guarantor
Senior Indebtedness and the Holders of Notes, the subordination provided in this
Article XII, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Subsidiary Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business or assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its or his Notes and accrued interest in the form required in
those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Guarantor Senior
Indebtedness or their Representative are or is hereby authorized to have the
right to file and are or is hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Notes. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Guarantor Senior Indebtedness
or their Representative to authorize or consent to or accept or adopt on behalf
of any Holders any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder
-108-
thereof, or to authorize the Trustee or the holders of Guarantor Senior
Indebtedness or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
Section 12.12. This Article XII Not To Prevent
Events of Default.
-----------------
The failure to make a payment on account of principal of or interest
on the Guarantees by reason of any provision of this Article XII shall not be
construed as preventing the occurrence of an Event of Default.
Section 12.13. Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article XII shall apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
Section 13.2. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by private courier service guaranteeing next day delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or the Subsidiary Guarantors, if any:
Everest Healthcare Services Corporation
000 Xxxxx Xxxxxxxx
Xxx Xxxx, Xxxxxxxx 00000
Attention:Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx
Attention: Xxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
-109-
if to the Trustee:
American National Bank and Trust Company of Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Division
Telecopy: (000) 000-0000
with a copy to:
American National Bank and Trust Company of Chicago
00 Xxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx l0005
Attention: Corporate Trust
Each of the Company, the Subsidiary Guarantors, and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Company, the Subsidiary Guarantors, or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered or delivered
by private courier service guaranteeing next day delivery; when answered back,
if telexed; when receipt is acknowledged, if faxed; and five (5) calendar days
after mailing if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first class mail or other equivalent means at such Holder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 13.3. Communications by Holders
with Other Holders.
------------------
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Subsidiary Guarantors, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S) 312(c).
Section 13.4. 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
-110-
shall furnish to the Trustee upon request:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(3) where applicable, a certificate or opinion by an
independent certified public accountant reasonably satisfactory to the
Trustee that complies with TIA (S) 314(c).
Section 13.5. 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 the Officers'
Certificate required by Section 4.6, 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 reasonably necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with.
Section 13.6. Rules by Trustee, Paying Agent,
Registrar.
---------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make
-111-
reasonable rules for its functions.
Section 13.7. Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 13.8. Governing Law.
-------------
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE.
Section 13.9. No Adverse Interpretation
of Other Agreements.
-------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 13.10. No Recourse Against Others.
--------------------------
No director, officer, employee or stockholder, as such, of the Company
or any Subsidiary shall have any liability for any obligations of the Company or
any Subsidiary under the Notes, any Guarantee or this Indenture. Each Holder by
accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes. This
provision does not affect any possible claims under federal securities laws.
Section 13.11. Successors.
----------
All agreements of the Company and the Subsidiary Guarantors in this
Indenture, the Notes and the Guarantees shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
Section 13.12. Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
-112-
Section 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in the
Notes or in the Guarantees shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and 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 fullest extent permitted by law.
-113-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
EVEREST HEALTHCARE SERVICES CORPORATION
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
AMARILLO ACUTE DIALYSIS SPECIALISTS, L.L.C.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
CON-MED SUPPLY COMPANY, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
CONTINENTAL HEALTH CARE, LTD.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
DIALYSIS SPECIALISTS OF CORPUS CHRISTI, L.L.C.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
DIALYSIS SPECIALISTS OF SOUTH TEXAS, L.L.C.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
-114-
DUPAGE DIALYSIS LTD.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
EVEREST MANAGEMENT, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
HEMO DIALYSIS OF AMARILLO L.L.C.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
HOME DIALYSIS OF AMERICA, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
HOME DIALYSIS OF DAYTON, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
LAKE AVENUE DIALYSIS CENTER, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
MERCY DIALYSIS CENTER, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
-115-
NEW YORK DIALYSIS MANAGEMENT, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
NORTH XXXXXXX DIALYSIS CENTER, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
NORTHWEST INDIANA DIALYSIS, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
OHIO VALLEY DIALYSIS CENTER, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
WSKC DIALYSIS SERVICES, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
as Trustee
By: /s/ XXXXXX XXXXXXXXX
---------------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Assistant Vice President
-116-
EXHIBIT A(l)
------------
[FORM OF INITIAL NOTE]
----------------------
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT)
OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 000X XXXXX XXX XXX,
(X) XXXXXX XXX XXXXXX XXXXXX TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE ACT.
CUSIP No.:
EVEREST HEALTHCARE SERVICES CORPORATION
9-3/4% SENIOR SUBORDINATED NOTE DUE 2008
No. $
EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum
of Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
EVEREST HEALTHCARE SERVICES CORPORATION
By:
_______________________________________
Name:
Title:
By:
_______________________________________
Name:
Title:
Dated: [ ], 1998
Certificate of Authentication
This is one of the 9-3/4% Senior Subordinated Notes due 2008 referred
to in the within-mentioned Indenture.
AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, as Trustee
By:
_______________________________________
Authorized Signatory
A.1-2
(REVERSE OF SECURITY)
---------------------
9-3/4% Senior Subordinated Note due 2008
----------------------------------------
1. Interest. EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware
--------
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from May 5, 1998. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing November 1, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes 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 ("U.S. Legal Tender"). Payments
in respect of the Notes represented by the Restricted Global Note (including
principal of, interest and premium, if any, on the Restricted Global Note) shall
be made by wire transfer of immediately available funds to the accounts
specified by the Restricted Global Note Holder. In all other cases, however,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, American National Bank and
--------------------------
Trust Company of Chicago (the "Trustee") will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated as
---------
of May 5, 1998 (the "Indenture"), by and among the Company, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Note is one of a duly authorized
issue of Initial Notes of the Company designated as its 9-3/4% Senior
Subordinated Notes due 2008 (the "Initial Notes"). The Notes include the Initial
Notes, the Private
A.1-3
and the Unrestricted Notes issued in exchange for the Initial Notes pursuant to
the Registration Rights Agreement or, with respect to Initial Notes issued under
the Indenture subsequent to the Issue Date, a registration rights agreement
substantially identical to the Registration Rights Agreement. The Initial Notes
and the Unrestricted Notes are treated as a single class of securities under the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of them. The Notes are general unsecured obligations
of the Company limited in aggregate principal amount to $150,000,000. As
provided for in Article XI of the Indenture, the payment on each Note is
guaranteed on a senior subordinated basis by the Subsidiary Guarantors. Each
Holder, by accepting a Note, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended from time to time.
5. Subordination. The Notes are subordinated in right of payment,
-------------
in the manner and to the extent set forth in the Indenture, to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding on the
date of the Indenture or thereafter created, incurred, assumed or guaranteed.
The Guarantees in respect of the Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Guarantor Senior Indebtedness of each Subsidiary Guarantor, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assured or guaranteed. Each Holder by its acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on its
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
6. Redemption Provisions. Except as provided below, the Notes may
---------------------
not be redeemed prior to May 1, 2003.
(a) Optional Redemption. On or after such date, the Notes may be redeemed
-------------------
at the option of the Company, at any time as a whole, or from time to time in
part, on not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest (if any) to the date of redemption (subject to the rights of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing May 1:
A.1-4
Redemption
Price
-----------
2003......................... 104.875%
2004......................... 103.250%
2005......................... 101.625%
2006 and thereafter.......... 100.000%
(b) Notwithstanding the foregoing, at any time prior to May 1, 2001, the
Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to an aggregate of 35% of the principal amount of
the Notes originally issued at a redemption price equal to 109.75% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption (subject to the rights of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided that at least 65% of the aggregate principal amount of the Notes
originally issued in the offering remain outstanding immediately after the
occurrence of any such redemption. In order to effect the foregoing redemption
with the proceeds of any Public Equity Offering, the Company shall make such
redemption not more than 60 days after the consummation of any such Public
Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption shall cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Section 4.15 of the Indenture provides that,
------------------
upon a Change of Control, each holder will have the right, subject to certain
conditions set forth in the Indenture, to require the Company to repurchase such
holder's Notes at a price equal to 101% of the principal amount thereof plus
accrued interest to the date of repurchase. Section 4.16 of the Indenture
provides that, after certain Asset Sales, and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
A.1-5
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Indenture, the Notes or the Guarantees may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes, or comply with Article V
of the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, incur
Indebtedness that is subordinated in right of payment to Senior Indebtedness and
senior in right of
A.1-6
payment to the Notes, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation and sell Capital Stock of a Restricted
Subsidiary. Such limitations are subject to a number of important qualifications
and exceptions. The Company must annually report to the Trustee on compliance
with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No director, officer, employee or
--------------------------
stockholder, as such, of the Company shall have any liability for any obligation
of the Company or any Subsidiary under the Notes, any Guarantee or the
Indenture. Each Holder of a Note by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The laws of the State of New York shall govern
-------------
this Note and the Indenture, without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note or an
A.1-7
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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Everest Healthcare Services Corporation,
000 Xxxxx Xxxxxxxx, Xxx Xxxx, Xxxxxxxx 00000, Attn: Chief Financial Officer.
A.1-8
SENIOR SUBORDINATED GUARANTEE
-----------------------------
Amarillo Acute Dialysis Specialists, L.L.C., Con-Med Supply Company,
Inc., Continental Health Care, Ltd., Dialysis Specialists of Corpus Christi,
L.L.C., Dialysis Specialists of South Texas, L.L.C., Dupage Dialysis Ltd.,
Everest Management, Inc., Hemo Dialysis of Amarillo L.L.C., Home Dialysis of
America, Inc., Home Dialysis of Dayton, Inc., Lake Avenue Dialysis Center, Inc.,
Mercy Dialysis Center, Inc., New York Dialysis Management, Inc., North Xxxxxxx
Dialysis Center, Inc., Northwest Indiana Dialysis, Inc., Ohio Valley Dialysis
Center, Inc., and WSKC Dialysis Services, Inc. (the "Subsidiary Guarantors")
have unconditionally guaranteed on a senior subordinated basis (such guarantee
by each Subsidiary Guarantor being referred to herein as the "Guarantee") (i)
the due and punctual payment of the principal of and interest on the Notes,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other Obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article XI of the Indenture and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, to the extent and in the manner provided, in Article XII
of the Indenture, and reference is hereby made to such Indenture for the precise
terms of the Guarantee therein made.
No stockholder, director, officer, employee or stockholder, as such,
of the Subsidiary Guarantor shall have any liability under the Guarantee. Each
holder of a Note by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Guarantees.
A.1-9
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
AMARILLO ACUTE DIALYSIS
SPECIALISTS, L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
CON-MED SUPPLY COMPANY, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
CONTINENTAL HEALTH CARE, LTD.
By:_________________ By:_________________
Name: Name:
Title: Title:
DIALYSIS SPECIALISTS OF CORPUS
CHRISTI,L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
DIALYSIS SPECIALISTS OF SOUTH
TEXAS, L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.1-10
DUPAGE DIALYSIS LTD.
By:_________________ By:_________________
Name: Name:
Title: Title:
EVEREST MANAGEMENT, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
HEMO DIALYSIS OF AMARILLO
L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
HOME DIALYSIS OF AMERICA, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
HOME DIALYSIS OF DAYTON, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
X.0-00
XXXX XXXXXX XXXXXXXX XXXXXX,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
MERCY DIALYSIS CENTER, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NEW YORK DIALYSIS MANAGEMENT,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NORTH XXXXXXX DIALYSIS CENTER,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NORTHWEST INDIANA DIALYSIS,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
OHIO VALLEY DIALYSIS CENTER,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.1-12
WSKC DIALYSIS SERVICES, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.1-13
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint, ___________________, agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date: ________________________ Signed: __________________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:__________________________________
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) May 6, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
[Check One]
---------
(1) ____ to the Company or a subsidiary thereof; or
(2) ____ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) ____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ____ outside the United States to a "foreign person" in
compliance with Rule 904 of Regulation S under the
A.1-14
Securities Act ; or
(5) ____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) ____ pursuant to an effective registration statement under the
Securities Act; or
(7) ____ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Date: _________________________ Signed: ___________________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:__________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
----------------------------------------------------
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's
A.1-15
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Date: _________________________ Signed: ___________________________
NOTICE: To be executed by
an executive
officer
A.1-16
[OPTION OF HOLDER TO ELECT PURCHASE]
----------------------------------
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
principal amount you elect to have purchased:
$________________
Dated:_________________________ ______________________________
NOTICE: The signature on this
assignment must correspond
with the name as it appears
upon the face of the within
Note in every particular
without alteration or
enlargement or any change
whatsoever and be guaranteed
by the endorser's bank or
broker.
Signature Guarantee: _________________________________
A.1-17
EXHIBIT A(2)
------------
[FORM OF EXCHANGE NOTE]
---------------------
CUSIP No.:
EVEREST HEALTHCARE SERVICES CORPORATION
9-3/4% SENIOR SUBORDINATED NOTE DUE 2008
No. $
EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum
of Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
EVEREST HEALTHCARE SERVICES
CORPORATION
By:_______________________________________
Name:
Title:
By:_______________________________________
Name:
Title:
Dated: [ ], 1998
Certificate of Authentication
This is one of the 9-3/4% Senior Subordinated Notes due 2008 referred
to in the within-mentioned Indenture.
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, as Trustee
By:_______________________________________
Authorized Signatory
(REVERSE OF SECURITY)
---------------------
9-3/4% Senior Subordinated Note due 2008
----------------------------------------
1. Interest. EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware
--------
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from May 5, 1998. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing November 1, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes 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 ("U.S. Legal Tender"). Payments
in respect of the Notes represented by the Restricted Global Note (including
principal of, interest and premium, if any, on the Restricted Global Note) shall
be made by wire transfer of immediately available funds to the accounts
specified by the Restricted Global Note Holder. In all other cases, however,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, American National Bank
--------------------------
and Trust Company of Chicago (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture,
---------
dated as of May 5, 1998 (the "Indenture"), by and among the Company, the
Subsidiary Guarantors and the Trustee. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. This Note is one of a
duly authorized issue of Exchange Notes of the Company designated as its 9-3/4%
Senior Subordinated Notes due 2008 (the "Initial Notes"). The Notes include the
Initial Notes, the Private
A.2-2
Exchange Notes and the Unrestricted Notes issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement or, with respect to Initial
Notes issued under the Indenture subsequent to the Issue Date, a registration
rights agreement substantially identical to the Registration Rights Agreement.
The Initial Notes and the Unrestricted Notes are treated as a single class of
securities under the Indenture. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and the TIA for a statement of them. The Notes are
general unsecured obligations of the Company limited in aggregate principal
amount to $150,000,000. As provided for in Article XI of the Indenture, the
payment on each Note is guaranteed on a senior subordinated basis by the
Subsidiary Guarantors. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
5. Subordination. The Notes are subordinated in right of payment,
-------------
in the manner and to the extent set forth in the Indenture, to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding on the
date of the Indenture or thereafter created, incurred, assumed or guaranteed.
The Guarantees in respect of the Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Guarantor Senior Indebtedness of each Subsidiary Guarantor, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assured or guaranteed. Each Holder by its acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on its
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
6. Redemption Provisions. Except as provided below, the Notes may
---------------------
not be redeemed prior to May 1, 2003.
(a) Optional Redemption. On or after such date, the Notes may be
-------------------
redeemed at the option of the Company, at any time as a whole, or from time to
time in part, on not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of principal amount), plus
accrued and unpaid interest (if any) to the date of redemption (subject to the
rights of holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing May 1:
A.2-3
Redemption
Price
-----------
2003.............................. 104.875%
2004.............................. 103.250%
2005.............................. 101.625%
2006 and thereafter............... 100.000%
(b) Notwithstanding the foregoing, at any time prior to May 1, 2001, the
Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to an aggregate of 35% of the principal amount of
the Notes originally issued at a redemption price equal to 109.75% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption (subject to the rights of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided that at least 65% of the aggregate principal amount of the Notes
originally issued in the offering remain outstanding immediately after the
occurrence of any such redemption. In order to effect the foregoing redemption
with the proceeds of any Public Equity Offering, the Company shall make such
redemption not more than 60 days after the consummation of any such Public
Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption shall cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Section 4.15 of the Indenture provides that,
------------------
upon a Change of Control each holder will have the right, subject to certain
conditions set forth in the Indenture, to require the Company to repurchase such
holder's Notes at a price equal to 101% of the principal amount thereof plus
accrued interest to the date of repurchase. Section 4.16 of the Indenture
provides that, after certain Asset Sales, and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
A.2-4
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture, the Notes or the Guarantees, may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes, or comply with Article V
of the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, incur
Indebtedness that is subordinated in right of payment to Senior Indebtedness and
senior in right of
A.2-5
payment to the Notes, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation and sell Capital Stock of a Restricted
Subsidiary. Such limitations are subject to a number of important qualifications
and exceptions. The Company must annually report to the Trustee on compliance
with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No director, officer, employee or
--------------------------
stockholder, as such, of the Company shall have any liability for any obligation
of the Company under the Notes or the Indenture. Each Holder of a Note by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The laws of the State of New York shall govern
-------------
this Note and the Indenture, without regard to principles of conflict of laws.
A.2-6
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note 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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Everest Healthcare Services Corporation,
000 Xxxxx Xxxxxxxx, Xxx Xxxx, Xxxxxxxx, 00000 Attn: Chief Financial Officer.
A.2-7
SENIOR SUBORDINATED GUARANTEE
-----------------------------
Amarillo Acute Dialysis Specialists, L.L.C., Con-Med Supply Company,
Inc., Continental Health Care, Ltd., Dialysis Specialists of Corpus Christi,
L.L.C., Dialysis Specialists of South Texas, L.L.C., Dupage Dialysis Ltd.,
Everest Management, Inc., Hemo Dialysis of Amarillo L.L.C., Home Dialysis of
America, Inc., Home Dialysis of Dayton, Inc., Lake Avenue Dialysis Center, Inc.,
Mercy Dialysis Center, Inc., New York Dialysis Management, Inc., North Xxxxxxx
Dialysis Center, Inc., Northwest Indiana Dialysis, Inc., Ohio Valley Dialysis
Center, Inc., and WSKC Dialysis Services, Inc. (the "Subsidiary Guarantors")
have unconditionally guaranteed on a senior subordinated basis (such guarantee
by each Subsidiary Guarantor being referred to herein as the "Guarantee") (i)
the due and punctual payment of the principal of and interest on the Notes,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other Obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article XI of the Indenture and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, to the extent and in the manner provided, in Article XII
of the Indenture, and reference is hereby made to such Indenture for the precise
terms of the Guarantee therein made.
No director, officer, employee or stockholder, as such, of the
Subsidiary Guarantor shall have any liability under the Guarantee. Each holder
of a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Guarantees.
A.2-8
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
AMARILLO ACUTE DIALYSIS
SPECIALISTS, L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
CON-MED SUPPLY COMPANY, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
CONTINENTAL HEALTH CARE, LTD.
By:_________________ By:_________________
Name: Name:
Title: Title:
DIALYSIS SPECIALISTS OF CORPUS
CHRISTI, L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.2-9
DIALYSIS SPECIALISTS OF SOUTH
TEXAS, L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
DUPAGE DIALYSIS LTD.
By:_________________ By:_________________
Name: Name:
Title: Title:
EVEREST MANAGEMENT, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
HEMO DIALYSIS OF AMARILLO
L.L.C.
By:_________________ By:_________________
Name: Name:
Title: Title:
HOME DIALYSIS OF AMERICA, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
HOME DIALYSIS OF DAYTON, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
X.0-00
XXXX XXXXXX XXXXXXXX XXXXXX,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
MERCY DIALYSIS CENTER, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NEW YORK DIALYSIS MANAGEMENT,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NORTH XXXXXXX DIALYSIS CENTER,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
NORTHWEST INDIANA DIALYSIS,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
OHIO VALLEY DIALYSIS CENTER,
INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.2-11
WSKC DIALYSIS SERVICES, INC.
By:_________________ By:_________________
Name: Name:
Title: Title:
A.2-12
ASSIGNMENT FORM
---------------
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint, ___________________, agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date: _________________ Signed: _______________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:______________________________
A.2-13
[OPTION OF HOLDER TO ELECT PURCHASE]
-----------------------------------
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
principal amount you elect to have purchased:
$________________
Dated:____________________ ____________________________________________
NOTICE: The signature on this assignment
must correspond with the name as it appears
upon the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed
by the endorser's bank or broker.
Signature Guarantee:____________________________________
A.2-14
EXHIBIT B
---------
FORM OF LEGEND FOR GLOBAL NOTES
-------------------------------
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE
AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE
OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
EXHIBIT C
---------
Form of Certificate To Be Delivered
-----------------------------------
in Connection with Transfers to
-------------------------------
Non-QIB Institutional Accredited Investors
------------------------------------------
__________, ____
American National Bank and Trust Company of Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Division
Re: EVEREST HEALTHCARE SERVICES CORPORATION
(the "Company")
9 3/4 Senior Subordinated
Notes due 2008 (the "Notes")
----------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated April 30, 1998, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages (i)-
(iii) of the Offering Memorandum and in the section entitled "Transfer
Restrictions" in the Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (the "Indenture") and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act") and all applicable State securities
laws.
3. We understand that the offer and sale of the Notes (and the
related Guarantees) have not been registered under the Securities Act, and that
the Notes (and the related Guarantees) may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. Persons except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter stated, that if we should
sell or otherwise transfer any Notes we will do so only (i) to the Company or
any subsidiary thereof, (ii) inside the United States in accordance with Rule
144A promulgated under the Securities Act to a "qualified institutional buyer"
(as defined in Rule 144A under the
Securities Act), (iii) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Notes, substantially in the form of this letter, (iv) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare Plan (as defined the section
entitled "Transfer Restrictions" in the Offering Memorandum), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You, the Company and the Initial Purchaser (as defined in the Offering
Memorandum) are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferee]
By: _______________________________
Authorized Signature
C-2
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------------------
American National Bank and Trust Company of Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Division
Re: EVEREST HEALTHCARE SERVICES CORPORATION
(the "Company") 9-3/4% Senior Subordinated
Notes due 2008 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
1. the offer of the Notes was not made to a person in the United
States;
2. either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;
3. no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters
covered hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
[Name of Transferor]
By: _____________________________________
Authorized Signature
D-2
EXHIBIT E
---------
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________ __, ____ between Subsidiary Guarantor (the "New Subsidiary Guarantor"),
a direct or indirect domestic Restricted Subsidiary of Everest Healthcare
Services Corporation (the "Company") and American National Bank and Trust
Company of Chicago, as trustee under the indenture referred to below (the
"Trustee"). Capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of May 5, 1998, providing for
the issuance of an aggregate principal amount of $___________ of 9-3/4% Senior
Subordinated Notes due 2008 (the "Notes");
WHEREAS, Section 4.10 of the Indenture provides that under certain
circumstances the Company may cause, and Section 4.20 of the Indenture provides
that under certain circumstances the Company must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Notes pursuant to a Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee
the Company's Obligations under the Notes and the Indenture on the terms and
subject to the conditions set forth in Article XI and XII of the Indenture and
to be bound by all other applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Subsidiary Guarantor shall have any liability for
any obligations of the Company or any Subsidiary under the Notes, any
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The Internal law of the State of New
York shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
8. EFFECT OF SUPPLEMENTAL INDENTURE. Except as amended by this
Supplemental Indenture, the terms and provisions of the Indenture shall remain
in full force and effect.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: __________________ [Name of New Subsidiary Guarantor]
By:_____________________________
Name:
Title:
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
as Trustee
By:_______________________________________
Name:
Title:
E-3
