EXHIBIT 4.5
================================================================================
PARAGON HEALTH NETWORK, INC.,
as Issuer
and
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
____________________
INDENTURE
Dated as of November 4, 1997
_____________________
9 1/2% Senior Subordinated Notes due 2007
9 1/2% Series B Senior Subordinated Notes due 2007
10 1/2% Senior Subordinated Discount Notes due 2007
10 1/2% Series B Senior Subordinated Discount Notes due 2007
================================================================================
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF NOVEMBER 4, 1997/***/
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1) ................................... 608
(a)(2) ................................... 608
(b) ................................... 609
(S) 312(a) ................................... 701
(c) ................................... 702
(S) 313(a) ................................... 703
(c) ................................... 703
(S) 314(a)(4) ................................... 1010(a)
(c)(1) ................................... 102
(c)(2) ................................... 102
(e) ................................... 102
(S) 315(a) ................................... 601(a)
(b) ................................... 602
(c) ................................... 601(b)
(d) ................................... 601(c), 603
316(a)(last sentence).................................
101 ("Outstanding")
(a)(1)(A) ................................... 502, 512
(a)(1)(B) ................................... 513
(b) ................................... 508
(c) ................................... 104(d)
(S) 317(a)(1) ................................... 503
(a)(2) ................................... 504
(b) ................................... 1003
(S) 318(a) ................................... 111
____________________________
/***/Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
TABLE OF CONTENTS/***/
Page
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions..................................................................... 1
SECTION 102. Compliance Certificates and Opinions............................................ 18
SECTION 103. Form of Documents Delivered to Trustee.......................................... 18
SECTION 104. Acts of Holders................................................................. 19
SECTION 105. Notices, Etc., to Trustee, the Company and any Guarantor........................ 19
SECTION 106. Notice to Holders; Waiver....................................................... 20
SECTION 107. Effect of Headings and Table of Contents........................................ 20
SECTION 108. Successors and Assigns.......................................................... 20
SECTION 109. Separability Clause............................................................. 20
SECTION 110. Benefits of Indenture........................................................... 21
SECTION 111. Governing Law................................................................... 21
SECTION 112. Legal Holidays.................................................................. 21
SECTION 113. No Personal Liability of Directors, Officers, Employees, Stockholders
or Incorporators......................................................................... 21
SECTION 114. Counterparts.................................................................... 21
SECTION 115. Communications by Holders with Other Holders.................................... 21
ARTICLE TWO. NOTE FORMS
SECTION 201. Forms Generally................................................................. 22
SECTION 202. Restrictive Legends............................................................. 22
SECTION 203. OID Legend...................................................................... 25
SECTION 204. Form of Senior Subordinated Note................................................ 25
SECTION 205. Form of Senior Subordinated Discount Note....................................... 38
SECTION 206. Form of Trustee's Certificate of Authentication................................. 50
ARTICLE THREE. THE NOTES
SECTION 301. Title and Terms................................................................. 50
SECTION 302. Denominations................................................................... 51
SECTION 303. Execution, Authentication, Delivery and Dating.................................. 51
SECTION 304. Temporary Notes................................................................. 52
SECTION 305. Registration, Registration of Transfer and Exchange............................. 52
SECTION 306. Book-Entry Provisions for Global Notes.......................................... 53
SECTION 307. Special Transfer Provisions..................................................... 54
SECTION 308. Form of Certificate to Be Delivered in Connection with Transfers to
Institutional Accredited Investors....................................................... 56
SECTION 309. Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S................................................................. 58
SECTION 310. Mutilated, Destroyed, Lost and Stolen Notes..................................... 59
SECTION 311. Payment of Interest; Interest Rights Preserved.................................. 59
SECTION 312. Persons Deemed Owners........................................................... 60
SECTION 313. Cancellation.................................................................... 60
___________________
/***/ Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
Page
----
SECTION 314. Computation of Interest......................................................... 61
SECTION 315. CUSIP Numbers................................................................... 61
ARTICLE FOUR. SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of
Indenture................................................................................ 61
SECTION 402. Application of Trust Money...................................................... 62
ARTICLE FIVE. REMEDIES
SECTION 501. Events of Default............................................................... 63
SECTION 502. Acceleration of Maturity; Rescission and Annulment.............................. 64
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee................. 65
SECTION 504. Trustee May File Proofs of Claim................................................ 65
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.......................... 66
SECTION 506. Application of Money Collected.................................................. 66
SECTION 507. Limitation on Suits............................................................. 66
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest................................................................................. 67
SECTION 509. Restoration of Rights and Remedies.............................................. 67
SECTION 510. Rights and Remedies Cumulative.................................................. 67
SECTION 511. Delay or Omission Not Waiver.................................................... 67
SECTION 512. Control by Holders.............................................................. 68
SECTION 513. Waiver of Past Defaults......................................................... 68
SECTION 514. Waiver of Stay or Extension Laws................................................ 68
SECTION 515. Undertaking for Costs........................................................... 69
ARTICLE SIX. THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities............................................. 69
SECTION 602. Notice of Defaults.............................................................. 70
SECTION 603. Certain Rights of Trustee....................................................... 70
SECTION 604. Trustee Not Responsible for Recitals or Issuance of Notes....................... 71
SECTION 605. May Hold Notes.................................................................. 72
SECTION 606. Money Held in Trust............................................................. 72
SECTION 607. Compensation and Reimbursement.................................................. 72
SECTION 608. Corporate Trustee Required; Eligibility......................................... 73
SECTION 609. Resignation and Removal; Appointment of Successor............................... 73
SECTION 610. Acceptance of Appointment by Successor.......................................... 74
SECTION 611. Merger, Conversion, Consolidation or Succession to Business..................... 74
SECTION 612. Trustee's Application for Instructions from the Company......................... 75
ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses.................................. 75
SECTION 702. Disclosure of Names and Addresses of Holders.................................... 75
SECTION 703. Reports by Trustee.............................................................. 75
ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms............................ 76
SECTION 802. Successor Substituted........................................................... 76
Page
----
ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
SECTION 901. Supplemental Indentures Without Consent of Holders.............................. 77
SECTION 902. Supplemental Indentures with Consent of Holders................................. 77
SECTION 903. Execution of Supplemental Indentures............................................ 78
SECTION 904. Effect of Supplemental Indentures............................................... 78
SECTION 905. Conformity with Trust Indenture Act............................................. 78
SECTION 906. Reference in Notes to Supplemental Indentures................................... 79
SECTION 907. Notice of Supplemental Indentures............................................... 79
SECTION 908. Effect on Senior Indebtedness................................................... 79
ARTICLE TEN. COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest............................ 79
SECTION 1002. Maintenance of Office or Agency................................................ 79
SECTION 1003. Money for Note Payments to Be Held in Trust.................................... 80
SECTION 1004. Corporate Existence............................................................ 81
SECTION 1005. Payment of Taxes and Other Claims.............................................. 81
SECTION 1006. Maintenance of Properties...................................................... 81
SECTION 1007. Insurance...................................................................... 81
SECTION 1008. Compliance with Laws........................................................... 81
SECTION 1009. Limitation on Restricted Payments.............................................. 82
SECTION 1010. Limitation on Indebtedness..................................................... 83
SECTION 1011. Limitation on Layering......................................................... 84
SECTION 1012. Limitation on Affiliate Transactions........................................... 85
SECTION 1013. Limitation on Restrictions on Distributions from Restricted
Subsidiaries............................................................................. 85
SECTION 1014. Limitation on Sale or Issuance of Preferred Stock of Restricted
Subsidiaries............................................................................. 86
SECTION 1015. Limitation on Liens............................................................ 86
SECTION 1016. Change of Control.............................................................. 87
SECTION 1017. Limitation on Sales of Assets.................................................. 87
SECTION 1018. Statement by Officers as to Default............................................ 89
SECTION 1019. Reporting Requirements......................................................... 89
SECTION 1020. Limitations on Issuances of Guarantees of Indebtedness by Restricted
Subsidiaries..................................................................
SECTION 1021. Designation of Unrestricted Subsidiaries....................................... 90
ARTICLE ELEVEN. REDEMPTION OF NOTES
SECTION 1101. Optional Redemption............................................................ 90
SECTION 1102. Applicability of Article....................................................... 90
SECTION 1103. Election to Redeem; Notice to Trustee.......................................... 90
SECTION 1104. Selection by Trustee of Notes to Be Redeemed................................... 90
SECTION 1105. Notice of Redemption........................................................... 91
SECTION 1106. Deposit of Redemption Price.................................................... 92
SECTION 1107. Notes Payable on Redemption Date............................................... 92
SECTION 1108. Notes Redeemed in Part......................................................... 92
ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Legal Defeasance or Covenant Defeasance............. 92
Page
----
SECTION 1202. Legal Defeasance and Discharge................................................. 92
SECTION 1203. Covenant Defeasance............................................................ 93
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance.......................... 93
SECTION 1205. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions........................................................... 95
SECTION 1206. Reinstatement.................................................................. 95
ARTICLE THIRTEEN. SUBORDINATION OF NOTES
SECTION 1301. Notes Subordinate to Senior Indebtedness....................................... 95
SECTION 1302. Payment over of Proceeds upon Dissolution, Etc................................. 96
SECTION 1303. Suspension of Payment When Senior Indebtedness in Default...................... 96
SECTION 1304. Acceleration of Notes.......................................................... 97
SECTION 1305. When Distribution Must Be Paid Over............................................ 97
SECTION 1306. Notice by Company.............................................................. 97
SECTION 1307. Payment Permitted If No Default................................................ 97
SECTION 1308. Subrogation to Rights of Holders of Senior Indebtedness........................ 97
SECTION 1309. Provisions Solely to Define Relative Rights.................................... 98
SECTION 1310. Trustee to Effectuate Subordination............................................ 98
SECTION 1311. Subordination May Not Be Impaired by Company................................... 98
SECTION 1312. Distribution or Notice to Representative....................................... 98
SECTION 1313. Notice to Trustee.............................................................. 99
SECTION 1314. Reliance on Judicial Order or Certificate of Liquidating Agent................. 99
SECTION 1315. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of
Trustee's Rights......................................................................... 100
SECTION 1316. Article Applicable to Paying Agents............................................ 100
SECTION 1317. No Suspension of Remedies...................................................... 100
SECTION 1318. Modification of Terms of Senior Indebtedness................................... 100
SECTION 1319. [Intentionally Omitted]........................................................ 100
SECTION 1320. Trust Moneys Not Subordinated.................................................. 100
SIGNATURES......................................................................................... 124
INDENTURE, dated as of November 4, 1997, between PARAGON HEALTH
NETWORK, INC., a Delaware corporation (the "Company"), having its principal
office at Xxx Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, and IBJ
XXXXXXXX BANK & TRUST COMPANY, a New York banking corporation, as trustee (the
"Trustee"), having its Corporate Trust Office at 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issuance of (i)
the Company's 9 1/2% Senior Subordinated Notes due 2007 (the "Senior
Subordinated Notes"), (ii) the Company's 10 1/2% Senior Subordinated Discount
Notes due 2007 (the "Senior Subordinated Discount Notes", and together with the
Senior Subordinated Notes, the "Initial Notes"), (iii) if and when issued in
exchange for Senior Subordinated Notes as provided in the Registration Rights
Agreement (as defined herein), the Company's 9 1/2% Series B Senior Subordinated
Notes due 2007 (the "Senior Subordinated Exchange Notes") and (iv) if and when
issued in exchange for Senior Subordinated Discount Notes as provided in the
Registration Rights Agreement, the Company's 10 1/2% Series B Senior
Subordinated Discount Notes due 2007 (the "Senior Subordinated Exchange Discount
Notes", and together with the Senior Subordinated Exchange Notes, the "Exchange
Notes") (collectively, the Initial Notes and the Exchange Notes are referred to
herein as the "Notes"), of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
Upon the issuance of the Exchange Notes, if any, or the effectiveness
of the Shelf Registration Statement (as defined herein), this Indenture will be
subject to, and shall be governed by, the provisions of the Trust Indenture Act
of 1939, as amended, that are required or deemed to be part of and to govern
indentures qualified thereunder.
All things necessary have been done to make the Notes, when executed
and duly issued by the Company and authenticated and delivered hereunder by the
Trustee or the Authenticating Agent, the valid obligations of the Company and to
make this Indenture a valid agreement of the Company in accordance with their
and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 100.
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and words in the singular include the plural as well
as the singular, and words in the plural include the singular as well as
the plural;
2
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or defined by
Commission rule and not otherwise defined herein have the meanings assigned
to them therein, and the terms "cash transaction" and "self-liquidating
paper", as used in TIA Section 311, shall have the meanings assigned to
them in the rules of the Commission adopted under the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined herein);
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) the word "or" is not exclusive; and
(f) provisions of this Indenture apply to successive events and
transactions.
Certain terms, used principally in Articles Two, Ten, Twelve and
Thirteen, are defined in those Articles.
"Accreted Value" with respect to any Senior Subordinated Discount Note
means, as of the date of issuance of the Senior Subordinated Discount Notes,
59.557% of the stated principal amount at maturity of such Senior Subordinated
Discount Note, and as of any date after such date of issuance and prior to
November 1, 2002 as of which the Accreted Value is being calculated (the
"Calculation Date"), (i) if the Calculation Date is a May 1 or November 1
interest payment date, the percentage of the stated principal amount of such
Senior Subordinated Discount Note as of such date as shown in the table below or
(ii) if the Calculation Date is not a May 1 or a November 1 interest payment
date, an amount equal to the sum of (A) the Accreted Value of such Senior
Subordinated Discount Note (as shown in the table below) as of the May 1 or
November 1, as the case may be, immediately preceding the Calculation Date plus
(B) the accrued amortization of the original issue discount from (but excluding)
such immediately preceding May 1 or November 1 to (and including) the
Calculation Date, calculated as the product of (x) 5.285% of the Accreted Value
of such Senior Subordinated Discount Note as of such immediately preceding May 1
or November 1 and (y) a fraction, the numerator of which is the number of days
from (but excluding) such immediately preceding May 1 or November 1 to (and
including) the Calculation Date (assuming a 360-day year of twelve 30-day
months), and the denominator of which is 180. The Accreted Value of each Senior
Subordinated Discount Note as of each May 1 and November 1 on or prior to
November 1, 2002 shall be an amount in dollars equal to a percentage of the
stated principal amount of such Senior Subordinated Discount Note as set forth
below:
MAY 1 INTEREST NOVEMBER 1 INTEREST
PAYMENT DATE PAYMENT DATE
-------------- -------------------
1998.......................... 62.740% 66.055%
1999.......................... 69.547% 73.222%
2000.......................... 77.092% 81.166%
2001.......................... 85.456% 89.972%
2002.......................... 94.727% 99.733%
Thereafter, the Accreted Value of each Senior Subordinated Discount
Note increases, such that on the Stated Maturity, the Accreted Value shall be
equal to 100% of the stated principal amount thereof.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock
3
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; (iii)
Capital Stock of any Person that at such time is a Restricted Subsidiary,
acquired from a third party; provided, however, that, in the case of clauses
(ii) and (iii), such Restricted Subsidiary is primarily engaged in a Related
Business; or (iv) Capital Stock or Indebtedness of any Person which is primarily
engaged in a Related Business; provided, however, for purposes of the covenant
described under Section 1017, (A) the aggregate amount of Net Available Cash
permitted to be invested pursuant to this clause (iv) shall not exceed at any
one time outstanding 5% of Consolidated Tangible Assets and (B) the aggregate
amount invested pursuant to this clause (iv) and clause (vi) of paragraph (b) of
Section 1009 shall not exceed at any one time outstanding 10% of Consolidated
Tangible Assets.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Chase and its Affiliates shall not be deemed an Affiliate of the Company.
"Apollo" means Apollo Management, L.P., Apollo Advisors, L.P., Lion
Advisors, L.P. or any entity controlled thereby or any of the partners and
associates thereof.
"Apollo Stockholders Agreement" means the Stockholders Agreement to be
dated as of the Issue Date among the Company and the Investors.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of inventory,
equipment, obsolete assets or surplus personal property in the ordinary course
of business, (iii) the sale of Temporary Cash Investments or Cash Equivalents in
the ordinary course or business, (iv) a transaction or a series of related
transactions in which either (x) the fair market value of the assets disposed
of, in the aggregate, does not exceed 2.5% of the Consolidated Tangible Assets
of the Company or (y) the EBITDA related to such assets does not, in the
aggregate, exceed 2.5% of the Company's EBITDA, (v) the sale or discount (with
or without recourse, and on commercially reasonable terms) of accounts
receivable or notes receivable arising in the ordinary course of business, or
the conversion or exchange of accounts receivable for notes receivable, (vi) the
licensing of intellectual property in the ordinary course of business, (vii) a
Healthcare Facility Swap, (viii) for purposes of the covenant contained in
Section 1017 only, a disposition subject to the covenant contained in Section
1009 or (ix) a disposition of property or assets that is governed by the
provisions of Article 8.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as of the time of determination, the present value (discounted at the interest
rate assumed in making calculations in accordance with FAS 13) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Indebtedness or Preferred
Stock multiplied by the amount of such payment by (ii) the sum of all such
payments.
4
"Bank Indebtedness" means any and all amounts, whether outstanding on
the Issue Date or thereafter incurred, payable under or in respect of the Senior
Credit Facility, including, without limitation, principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for postfiling interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees,
other monetary obligations of any nature and all other amounts payable
thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease.
"Cash Equivalents" means any of the following: (i) securities issued
or fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (ii) time deposits, certificates of deposit or bankers'
acceptances of (A) any lender under the Senior Credit Agreement or (B) any
commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), (iii) commercial paper rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency) and (iv)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the SEC under the Investment Company Act.
"Change of Control" means (i) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) directly or indirectly, of more than 50% of the Voting
Stock of the Company or a Successor Company (as defined below) (including,
without limitation, through a merger or consolidation or purchase of Voting
Stock of the Company); provided that the Permitted Holders do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of the
Company was approved by (A) Apollo in accordance with the Apollo Stockholders
Agreement or (B) a vote of a majority of the directors of the Company then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office; (iii)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any Person or group of related Persons (a "Group") (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act)
5
other than a Permitted Holder; or (iv) the adoption of a plan relating to the
liquidation or dissolution of the Company.
"Chase" means The Chase Manhattan Bank.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Paragon Health Network, Inc., a Delaware corporation.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (ii)
Consolidated Interest Expense for such four fiscal quarters (in each of clause
(i) and (ii), determined, for each fiscal quarter (or portion thereof) of the
four fiscal quarters ending prior to the Issue Date, on a pro forma basis to
give effect to the Transactions as if they had occurred at the beginning of such
four-quarter period); provided, however, that: (1) if the Company or any
Restricted Subsidiary (x) has Incurred any Indebtedness since the beginning of
such period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (except that in making such computation, the amount of Indebtedness under
any revolving credit facility outstanding on the date of such calculation shall
be computed based on (A) the average daily balance of such Indebtedness during
such four fiscal quarters or such shorter period for which such facility was
outstanding or (B) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such Indebtedness during the
period from the date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, or (y) has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding on such date of
determination, or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid), EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to such discharge of such Indebtedness, including with the proceeds of
such new Indebtedness, as if such discharge had occurred on the first day of
such period; (2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition of any company or
any business or any group of assets constituting an operating unit of a
business, the EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets that are the subject of
such Asset Disposition for such period or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (and, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale); (3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired
any company or any business or any group of assets constituting an operating
unit of a business, including any such acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness
and including the pro forma expenses and cost reductions calculated on a basis
consistent
6
with Regulation S-X of the Securities Act) as if such Investment or acquisition
occurred on the first day of such period; and (4) if since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to an Asset Disposition, Investment or acquisition of assets, or any
transaction governed by the provisions of Article 8, or the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or repaid, repurchased, defeased or
otherwise discharged in connection therewith, the pro forma calculations in
respect thereof shall be as determined in good faith by a responsible financial
or accounting officer of the Company, based on reasonable assumptions. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term as at the
date of determination in excess of 12 months). If any Indebtedness bears, at the
option of the Company or a Restricted Subsidiary, a fixed or floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be computed by applying, at the option of the Company or such
Restricted Subsidiary, either a fixed or floating rate. If any Indebtedness
which is being given pro forma effect was Incurred under a revolving credit
facility, the interest expense on such Indebtedness shall be computed based upon
the average daily balance of such Indebtedness during the applicable period.
"Consolidated Interest Expense" means, as to any Person, for any
period, the total consolidated interest expense of such Person and its
Subsidiaries determined in accordance with GAAP, minus, to the extent included
in such interest expense, amortization or write-off of financing costs and cash
dividends paid to the Company with respect to its investment in Health and
Retirement Properties Trust, plus, to the extent incurred by such Person and its
Subsidiaries in such period but not included in such interest expense, without
duplication, (i) interest expense attributable to Capitalized Lease Obligations
and the interest component of rent expense associated with Attributable Debt in
respect of the relevant lease giving rise thereto, determined as if such lease
were a capitalized lease, in accordance with GAAP, (ii) amortization of debt
discount, (iii) interest in respect of indebtedness of any other Person that has
been Guaranteed by such Person or any Subsidiary, but only to the extent that
such interest is actually paid by such Person or any Restricted Subsidiary, (iv)
non-cash interest expense, (v) net costs associated with Hedging Obligations,
(vi) the product of (A) mandatory Preferred Stock cash dividends in respect of
all Preferred Stock of Subsidiaries of such Person and Disqualified Stock of
such Person held by Persons other than such Person or a Subsidiary multiplied by
(B) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, determined on a
consolidated basis in accordance with GAAP; and (vii) the cash contributions to
any employee stock ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest to any Person
(other than the referent Person or any Subsidiary thereof) in connection with
Indebtedness Incurred by such plan or trust; provided, however, that as to the
Company, there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed
or paid by the Company or any Restricted Subsidiary. For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by such Person and its Subsidiaries with respect
to Interest Rate Agreements.
"Consolidated Net Income" means, as to any Person, for any period, the
consolidated net income (loss) of such Person and its Subsidiaries, determined
in accordance with GAAP; provided, however,
7
that there shall not be included in such Consolidated Net Income: (i) any net
income (loss) of any Person if such Person is not (as to the Company) a
Restricted Subsidiary and (as to any other Person) an unconsolidated Person,
except that (A) subject to the limitations contained in clause (iv) below, the
referent Person's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such period to the referent
Person or a Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Subsidiary, to the limitations
contained in clause (iii) below) and (B) the net loss of such Person shall be
included to the extent of the aggregate Investment of the referent Person or any
of its Subsidiaries in such Person; (ii) any net income (loss) of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition; (iii) any net income (loss) of any Restricted Subsidiary
(as to the Company) or of any Subsidiary (as to any other Person) if such
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the limitations contained
in (iv) below, such Person's equity in the net income of any such Subsidiary for
such period shall be included in Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Subsidiary during such
period to such Person or another Subsidiary as a dividend (subject, in the case
of a dividend that could have been made to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the net loss of such Subsidiary
shall be included in determining Consolidated Net Income; (iv) any charges for
costs and expenses associated with the Mergers; (v) any extraordinary gain or
loss; (vi) the cumulative effect of a change in accounting principles; and (vii)
non-recurring items related to (A) costs and expenses incurred in connection
with acquisitions and dispositions of assets and (B) costs related to the
discharge of legal judgments or settlement costs related to the settlement of a
bona fide dispute between the Company and a third party.
"Consolidated Tangible Assets" means, as of any date of determination,
the total assets, less goodwill and other intangibles (other than patents,
trademarks, copyrights, licenses and other intellectual property), shown on the
balance sheet of the Company and its Restricted Subsidiaries as of the most
recent date for which such a balance sheet is available, determined on a
consolidated basis in accordance with GAAP less all write-ups (other than write-
ups in connection with acquisitions) subsequent to the date of this Indenture in
the book value of any asset (except any such intangible assets) owned by the
Company or any of its Restricted Subsidiaries.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP;
provided, however, that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of the Company in any
Unrestricted Subsidiary will be accounted for as an Investment. The term
"Consolidated" has a correlative meaning.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
(including derivative agreements or arrangements) as to which such Person is a
party or a beneficiary.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and
(ii) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount of, or under which, at the date of determination, the
holders thereof are committed to lend up to, at least $25.0 million and is
specifically designated by the Company in the instrument evidencing or governing
such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of
this Indenture.
8
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the 91st day
after the Stated Maturity of the Notes.
"EBITDA" means, as to any Person, for any period, the Consolidated Net
Income for such period, plus the following to the extent included in calculating
such Consolidated Net Income: (i) income tax expense, (ii) Consolidated
Interest Expense, (iii) depreciation expense, (iv) amortization of intangibles,
(v) other non-cash charges or non-cash losses and (vi) the rent expense
associated with Sale/Leaseback Transactions to the extent not included in
Consolidated Interest Expense and minus any gain (but not loss) realized upon
the sale or other disposition of any asset of the Company or its Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not
sold or otherwise disposed of in the ordinary course of business.
"Equity Offering" means a primary public or private offering or sale
of common stock of the Company, the proceeds of which shall be at least $25.0
million.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated Interest
Expense," "Consolidated Net Income" and "EBITDA," all defined terms in this
Indenture to the extent used in or relating to any of the foregoing definitions,
and all ratios and computations based on any of the foregoing definitions) and
as in effect from time to time (for all other purposes of this Indenture),
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
"GranCare Merger" means the merger of LCA Acquisition Sub, Inc. with
and into GranCare, Inc.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
nonfinancial obligation of any other Person, including any such obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or such other obligation of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection, or deposits made, in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each Subsidiary of the Company that executes a
Guarantee in respect of the Notes in accordance with the covenant described
under Section 1020, and their respective successors and assigns.
"Healthcare Facility" means (i) a hospital, outpatient clinic, nursing
center, assisted or independent living community, long-term care facility or any
other facility that is used or useful in the
9
provision of healthcare or custodial care services, (ii) any healthcare business
affiliated or associated with a Healthcare Facility described in clause (i) of
this definition or (iii) any business related or ancillary to the provision of
healthcare services or the operation of a Healthcare Facility, including, but
not limited to, contract therapy services such as rehabilitation, pharmacy,
respiratory, speech and occupational therapy services, as well as hospice and
home care services.
"Healthcare Facility Swap" means an exchange of assets (including
Capital Stock of a Subsidiary or the Company) by the Company or a Restricted
Subsidiary for one or more Healthcare Facilities or for Capital Stock,
Indebtedness or other securities (including cash, provided, however, that any
cash received must be applied in accordance with the covenant contained in
Section 1017 as if such cash were Net Available Cash) of any Person owning or
operating one or more Healthcare Facilities and primarily engaged in Related
Business.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Register.
"HRPT Agreements" means collectively, (i) the Restructure and Asset
Exchange Agreement to be dated on or about November 4, 1997 among Health and
Retirement Properties Trust ("HRPT"), GranCare, Inc., AMS Properties, Inc. and
GCI Health Care Centers, Inc., (ii) the Master Lease Document General Terms and
Conditions dated as of December 28, 1990, and related facility leases, as
amended, between HRPT and AMS Properties, Inc., (iii) the Master Lease Document
General Terms and Conditions dated as of June 30, 1992, and the related facility
leases, as amended, between HRPT and GCI Health Care Centers, Inc., and (iv) all
documents and agreements contemplated therein and executed in connection
therewith.
"Incur" means issue, assume, enter into any Guarantee, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Any
Indebtedness issued at a discount (including Indebtedness on which interest is
payable through the issuance of additional Indebtedness) shall be deemed
incurred at the time of original issuance of the Indebtedness at the initial
accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication): (i) the principal of indebtedness of such
Person for borrowed money, (ii) the principal of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
reimbursement obligations of such Person (including reimbursement obligations)
in respect of letters of credit or other similar instruments (the amount of such
obligations being equal at any time to the aggregate then undrawn and unexpired
amount of such letters of credit or other instruments plus the aggregate amount
of drawings thereunder that have not then been reimbursed), (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services (except Trade Payables), which purchase price is due more than one year
after the date of placing such property in final service or taking final
delivery and title thereto or the completion of such services, (v) all
Capitalized Lease Obligations and Attributable Debt of such Person, (vi) the
redemption, repayment or other repurchase amount of such Person with respect to
any Disqualified Stock or (if such Person is a Subsidiary of the Company) any
Preferred Stock of such Subsidiary, but excluding, in each case, any accrued
dividends (the amount of such obligation to be equal at any time to the maximum
fixed involuntary redemption, repayment or repurchase price for such Capital
Stock, or if such Capital Stock has no fixed price, to the involuntary
redemption, repayment or repurchase price therefor calculated in accordance with
the terms thereof as if then redeemed, repaid or repurchased, and if such price
is based upon or measured by the fair market value of such Capital Stock, such
fair market
10
value shall be as determined in good faith by the Board of Directors or the
board of directors of the issuer of such Capital Stock), (vii) all Indebtedness
of other Persons secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person; provided, however, that the amount
of Indebtedness of such Person shall be the lesser of (A) the fair market value
of such asset at such date of determination and (B) the amount of such
Indebtedness of such other Persons, (viii) all Indebtedness of other Persons to
the extent Guaranteed by such Person, and (ix) to the extent not otherwise
included in this definition, net Hedging Obligations of such Person (such
obligations to be equal at any time to the termination value of such agreement
or arrangement giving rise to such Hedging Obligation that would be payable by
such Person at such time). Notwithstanding the preceding sentence, obligations
arising under (i) the Master Lease Agreement dated October 10, 1996 between FBTC
Leasing Corp. and Living Centers Holding Company and the related agreements (as
amended) and (ii) the HRPT Agreements, in each case without giving effect to any
amendment or other modification thereto relating to the total amount of such
obligations, shall not be deemed Indebtedness for the purposes of this
Indenture.
The amount of Indebtedness of any Person at any date shall be
determined as set forth above or otherwise provided in this Indenture, or
otherwise in accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement (including derivative agreement or
arrangements) as to which such Person is party or a beneficiary; provided,
however, any such agreements entered into in connection with the Notes shall not
be included.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers,
directors, officers or employees of any Person in the ordinary course of
business) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by, such Person. 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 entity is no longer a
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 of.
"Investors" means Apollo, Chase Venture Partners L.P., Healthcare
Equity Partners L.P., Healthcare Equity QP Partners L.P., Walnut Growth
Partners, L.P., Xxxxx X. Xxxxx, Key Capital Corporation and Key Equity Partners
97.
"Issue Date" means the date on which the Initial Notes are originally
issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Mergers" means the Recapitalization Merger and the GranCare Merger.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in
11
the form of assumption by the acquiring person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of (i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred (including, without limitation, fees and expenses of
legal counsel, accountants and financial advisors), and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness that is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such assets, or
that must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition or to any other Person (other than the Company or a Restricted
Subsidiary) owning a beneficial interest in the assets disposed of in such Asset
Disposition and (iv) appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds" means, with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance, sale or
contribution and net of taxes paid or payable as a result thereof.
"Non-Recourse Debt" means indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (A) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (B) is directly or
indirectly liable (as a guarantor or otherwise) and (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 any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Offering Memorandum" means the Offering Memorandum dated October 30,
1997 relating to the Initial Notes.
"Officer" means the Chief Executive Officer, President, Chief
Financial Officer, any Vice President, Controller, Secretary or Treasurer of the
Company.
"Officer's Certificate" means a certificate signed by one Officer.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Business Venture" means a Person other than a Restricted
Subsidiary (i) that is engaged in a Related Business; (ii) no debt or equity
interest (except any director's qualifying shares) of which is or will be
directly or indirectly held by (A) an officer or director of either the Company
or any Restricted Subsidiary or (B) any other Affiliate of the Company; and
(iii) unless the Investment by the Company or a Restricted Subsidiary is less
than $5.0 million, the Company and/or any Restricted Subsidiary has at least a
35% ownership interest in each such Person, provided, however, that in no event
shall the aggregate amount of all Investments by the Company and all Restricted
Subsidiaries in Permitted Business Ventures wherein the ownership interest of
the Company or such Restricted Subsidiary is less than 35% exceed $20.0 million
in the aggregate.
12
"Permitted Holders" means the Investors, their respective Affiliates
and successors or assigns and any Person acting in the capacity of an
underwriter in connection with a public or private offering of the Company's
Capital Stock.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in any of the following:
(i) a Restricted Subsidiary, the Company or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
(ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a Restricted
Subsidiary;
(iii) Temporary Cash Investments or Cash Equivalents;
(iv) receivables owing to the Company or any Restricted
Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(v) securities or other Investments received in connection
with any Healthcare Facility Swaps or as consideration in sales or other
dispositions of property or assets, including Asset Dispositions made in
compliance with the covenant contained in Section 1017;
(vi) securities or other Investments received in settlement of
debts created in the ordinary course of business and owing to the Company
or any Restricted Subsidiary, or as a result of foreclosure, perfection or
enforcement of any Lien, or in satisfaction of judgments, including in
connection with any bankruptcy proceeding or other reorganization of
another Person;
(vii) binding written commitments in existence on the Issue
Date;
(viii) Currency Agreements, Interest Rate Agreements and
related Hedging Obligations, which obligations are Incurred in compliance
with the covenant contained in Section 1017;
(ix) pledges or deposits (A) provided to third parties in the
ordinary course of business with respect to leases or utilities or (B)
otherwise described in the definition of "Permitted Liens";
(x) Investments made on commercially reasonable terms by
wholly owned insurance subsidiaries of the Company that are permitted
pursuant to federal, state or local regulations governing the investment
activities of such Persons; and
(xi) other Investments in an aggregate amount outstanding at
any time not to exceed $10.0 million.
"Permitted Liens" means: (i) Liens for taxes, assessments or other
governmental charges not yet delinquent or the nonpayment of which in the
aggregate would not be reasonably expected to have a material adverse effect on
the Company and its Restricted Subsidiaries, or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Company or such Subsidiary, as the case may
be, in accordance with GAAP; (ii) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other like Liens arising in the
13
ordinary course of business in respect of obligations that are not overdue for a
period of more than 60 days or that are bonded or that are being contested in
good faith and by appropriate proceedings; (iii) pledges, deposits or liens in
connection with workers' compensation, unemployment insurance and other social
security legislation and/or similar legislation or other insurance-related
obligations (including without limitation, pledges or deposits securing
liability to insurance carriers under insurance or self-insurance arrangements);
(iv) pledges, deposits or liens to secure the performance of bids, tenders,
trade, government or other contracts (other than for borrowed money),
obligations for or under or in respect of utilities, leases, licenses, statutory
obligations, surety, judgment and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business; (v)
easements (including reciprocal easement agreements), rights-of-way, building,
zoning and similar restrictions, utility agreements, covenants, reservations,
restrictions, encroachments, changes, and other similar encumbrances or title
defects incurred, or leases or subleases granted to others, in the ordinary
course of business, which do not in the aggregate materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries, taken as a
whole; (vi) Liens existing on, or provided for under written arrangements
existing on, the Issue Date, or (in the case of any such Liens securing
Indebtedness of the Company or any of its Subsidiaries existing or arising under
written arrangements existing on the Issue Date) securing any Refinancing
Indebtedness in respect of such Indebtedness so long as the Lien securing such
Refinancing Indebtedness is limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or under such written arrangements could secure)
the original Indebtedness; (vii) Liens securing Hedging Obligations Incurred in
compliance with the covenant contained in Section 1010; (viii) Liens arising out
of judgments, decrees, orders or awards in respect of which the Company shall in
good faith be prosecuting an appeal or proceedings for review which appeal or
proceedings shall not have been finally terminated, or the period within which
such appeal or proceedings may be initiated shall not have expired; (ix) Liens
securing (A) Indebtedness incurred in compliance with clause (i), (iv) or (v) of
the second paragraph of Section 1010 or clause (iii) thereof (other than,
Refinancing Indebtedness Incurred in respect of Indebtedness described in the
first paragraph thereof) or (B) Bank Indebtedness; (x) Liens on properties or
assets of the Company securing Senior Indebtedness; (xi) Liens existing on
property or assets of a Person at the time such Person becomes a Subsidiary of
the Company (or at the time the Company or a Restricted Subsidiary acquires such
property or assets); provided, however, that such Liens are not created in
connection with, or in contemplation of, such other Person becoming such a
Subsidiary (or such acquisition of such property or assets), and that such Liens
are limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements under which such Liens arose, could
secure) the obligations to which such Liens relate, (xii) Liens on Capital Stock
of an Unrestricted Subsidiary that secure Indebtedness or other obligations of
such Unrestricted Subsidiary; (xiii) Liens securing the Notes; and (xiv) Liens
securing Refinancing Indebtedness Incurred in respect of any Indebtedness
secured by, or securing any refinancing, refunding, extension, renewal or
replacement (in whole or in part) of any other obligation secured by, any other
Permitted Liens, provided that any such new Lien is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Purchase Money Obligations" means any Indebtedness of the Company or
any Restricted Subsidiary incurred to finance the acquisition, construction or
capital improvement of any property or
14
business (including Indebtedness incurred within 90 days following such
acquisition or construction), including Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed by the Company or a
Restricted Subsidiary in connection with the acquisition of assets from such
Person; provided, however, that any Lien on such Indebtedness shall not extend
to any property other than the property so acquired or constructed.
"Recapitalization Merger" means the merger of Apollo LCA Acquisition
Corp. with and into Living Centers of America, Inc. (renamed Paragon Health
Network, Inc.).
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances" and "refinanced"
shall have a correlative meaning) any Indebtedness existing on the date of this
Indenture or Incurred in compliance with this Indenture (including Indebtedness
of the Company that refinances Indebtedness of any Restricted Subsidiary (to the
extent permitted in this Indenture) and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness; provided,
however, that (i) the Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced and (iii) such Refinancing Indebtedness is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced, plus
fees, underwriting discounts, premiums and other costs and expenses incurred in
connection with such Refinancing Indebtedness; provided further, however, that
Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted
Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of November 4, 1997 among the Company, Chase Securities Inc.,
Xxxxx Xxxxxx Inc. and Credit Suisse First Boston Corporation.
"Regular Record Date" means, with respect to any Interest Payment
Date, the April 15 or October 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Related Business" means those businesses in which the Company or any
of its Subsidiaries is engaged on the date of this Indenture or that are
reasonably related or incidental thereto, including any aspect of the healthcare
or assisted living industry.
"Representative" means the trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility under
the Senior Credit Facility (which may include any swing line or letter of credit
facility or subfacility thereunder).
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or such Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases (i) between the Company and a Restricted Subsidiary or between
15
Restricted Subsidiaries or (ii) required to be classified and accounted for as
capitalized leases for financial reporting purposes in accordance with GAAP.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Agreement" means the credit agreement dated as of
November 4, 1997, among the Company, the banks and other financial institutions
party thereto from time to time, and Chase, as administrative agent, as such
agreement may be assumed by any successor in interest, and as such agreement may
be amended, supplemented, waived or otherwise modified from time to time, or
refunded, refinanced, restructured, replaced, renewed, repaid, increased or
extended front time to time (whether in whole or in part, whether with the
original agent and lenders or other agents and lenders or otherwise, and whether
provided under the original Senior Credit Agreement or otherwise).
"Senior Credit Facility" means the collective reference to the Senior
Credit Agreement, any Loan Documents (as defined therein), any notes and letters
of credit issued pursuant thereto and any guarantee and collateral agreement,
patent and trademark security agreement, mortgages, letter of credit
applications and other security agreements and collateral documents, and other
instruments and documents, executed and delivered pursuant to or in connection
with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise). Without limiting the generality
of the foregoing, the term "Senior Credit Facility" shall include any agreement
(i) changing the maturity of any Indebtedness Incurred thereunder or
contemplated thereby, (ii) adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder, (iii) increasing the amount of Indebtedness
Incurred thereunder or available to be borrowed thereunder or (iv) otherwise
altering the terms and conditions thereof.
"Senior Indebtedness" means the following obligations, whether
outstanding on the date of this Indenture or thereafter issued, without
duplication: (i) all obligations consisting of Bank Indebtedness; and (ii) all
obligations consisting of the principal of and premium, if any, and accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company regardless
of whether postfiling interest is allowed in such proceeding) on, and fees and
other amounts owing in respect of, all other Indebtedness of the Company,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness are not superior in right of payment to the Notes; provided,
however, that Senior Indebtedness shall not include (A) any obligation of the
Company to any Subsidiary or any other Affiliate of the Company, or any such
Affiliate's Subsidiaries, (B) any liability for federal, state, foreign, local
or other taxes owed or owing by the Company, (C) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities) or
other current liabilities (other than current liabilities which constitute Bank
Indebtedness or the current portion of any long-term Indebtedness which would
constitute Senior Indebtedness but for the operation of this clause (C)), (D)
any Indebtedness, Guarantee or obligation of the Company that is expressly
subordinate or junior to any other Indebtedness, Guarantee or obligation of the
Company, (E) Indebtedness which is represented by Disqualified Stock or (F) that
portion of any Indebtedness that is Incurred in violation of this Indenture. If
any Designated Senior Indebtedness is disallowed, avoided or subordinated
pursuant to the provisions of Section 548 of Title 11 of the United States Code
or any applicable state fraudulent conveyance law, such Designated Senior
Indebtedness nevertheless will constitute Senior Indebtedness.
16
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company that (i) specifically provides that such
Indebtedness is to rank pari passu with the Notes or is otherwise entitled
Senior Subordinated Indebtedness and (ii) is not subordinated by its terms to
any Indebtedness or other obligation of the Company that is not Senior
Indebtedness.
"Shelf Registration Statement" has the meaning ascribed thereto in the
Registration Rights Agreement.
"Significant Subsidiary" means each Restricted Subsidiary that for the
most recent fiscal year of such Restricted Subsidiary had consolidated revenues
greater than $10.0 million or as at the end of such fiscal year had assets or
liabilities greater than $10.0 million.
"S&P" means Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. and its successors.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the date of this Indenture or thereafter Incurred) which
is subordinate or junior in right of payment to the Notes pursuant to a written
agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Successor Company" shall have the meaning assigned thereto in Section
801.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations (x) of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof or (y) of any foreign country recognized by the United States of
America rated at least "A" by S&P or "A-1" by Moody's, (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company that is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital and surplus aggregating in excess of $250
17
million (or the foreign currency equivalent thereof), and whose long-term debt
is rated "A" by S&P or "A-1" by Moody's, (iii) repurchase obligations with a
term of not more than 180 days for underlying securities of the types described
in clause (i) or (ii) above entered into with a bank meeting the qualifications
described in clause (ii) above, (iv) Investments in commercial paper, maturing
not more than 180 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P, (v) Investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by
Moody's, (vi) any money market deposit accounts issued or offered by a domestic
commercial bank or a commercial bank organized and located in a country
recognized by the United States of America, in each case, having capital and
surplus in excess of $250 million (or the foreign currency equivalent thereof),
or investments in money market funds complying with the risk limiting conditions
of Rule 2a-7 (or any short-term successor rule) of the SEC, under the Investment
Company Act of 1940, as amended, and (vii) similar short-term investments
approved by the Board of Directors in the ordinary course of business.
"Term Loan Facility" means the term loan facilities provided under the
Senior Credit Facility.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture.
"Trade Payables" means, with respect to any Person, any accounts
payable or any Indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Transactions," means collectively the Mergers, the offering of the
Initial Notes, the initial borrowings under the Senior Credit Facility, and all
other transactions relating to the Mergers or the financing thereof.
"Transfer Restricted Notes" means Notes that bear or are required to
bear the legend set forth in Section 202 hereof.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means an officer of the Trustee assigned by the
Trustee to administer its corporate trust matters or to any other officer of the
Trustee to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that
is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that either (A) the Subsidiary to be so designated has total consolidated assets
of $10,000 or less or (B) if such Subsidiary has consolidated assets greater
than $10,000, then such designation would be permitted under Section 1009. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation, (x) the Company could Incur at least $1.00 of additional
Indebtedness under the first paragraph in the covenant contained in Section 1010
and (y) no Default or Event of Default shall have occurred and be continuing.
Any such designation by the Board of Directors shall be evidenced to the Trustee
by promptly filing with the Trustee a copy of the resolution of the Company's
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
18
"Voting Stock" of an entity means all classes of Capital Stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly Owned Subsidiary.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company and any Guarantor
(if applicable) and any other obligor on the Notes (if applicable) shall furnish
to the Trustee an Officers' Certificate in form and substance reasonably
acceptable to the Trustee stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided pursuant to Section 1018(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual or such
firm, he or it has made such examination or investigation as is necessary
to enable him or it 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, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor on the Notes may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company, any Guarantor or other obligor on the Notes stating
that the information with respect to such factual matters is in the possession
of the Company, any Guarantor or other obligor on the Notes unless
19
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 104.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Note Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Notes shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof (including in
accordance with Section 310) in respect of anything done, omitted or suffered to
be done by the Trustee, any Paying Agent or the Company or any Guarantor in
reliance thereon, whether or not notation of such action is made upon such Note.
20
SECTION 105. Notices, Etc., to Trustee, the Company and any
----------------------------------------------
Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor on the Notes shall be sufficient for every purpose
hereunder if made, given, furnished or delivered in writing and mailed,
first-class postage prepaid, or delivered by recognized overnight courier,
to or with the Trustee and received at its Corporate Trust Office,
Attention: Corporate Trust Administration.
(2) the Company or any Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or delivered, in writing, or
mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to the Company or such Guarantor addressed to it and received at
the address of its principal office specified in the first paragraph of
this Indenture, or at any other address previously furnished in writing to
the Trustee by the Company or such Guarantor.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. Neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice. Where this Indenture provides
for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
If the Company mails any notice or communication to any Holder, it
shall mail a copy to the Trustee at the same time.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
21
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, (other than the parties hereto, any agent and their
successors hereunder and each of the Holders and, with respect to any provisions
hereof relating to the subordination of the Notes or the rights of holders of
Senior Indebtedness, the holders of Senior Indebtedness) any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST
EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. UPON THE
ISSUANCE OF THE EXCHANGE NOTES OR THE EFFECTIVENESS OF THE SHELF REGISTRATION
STATEMENT, THIS INDENTURE SHALL BE SUBJECT TO THE PROVISIONS OF THE TRUST
INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE
EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE U.S. FEDERAL COURTS, IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN, AND
WAIVES ANY OBJECTION AS TO VENUE OR FORUM NON CONVENIENS.
SECTION 112. Legal Holidays.
--------------
In any case where any interest payment date, any date established for
payment of Defaulted Interest pursuant to Section 311 or redemption date or
Stated Maturity of any Note shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Notes) payment of principal (or
premium, if any) or interest need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the interest payment date or date established for payment of Defaulted Interest
pursuant to Section 311, Redemption Date, or at the Stated Maturity or Maturity;
provided that no interest shall accrue for the period from and after such
interest payment date, redemption date or date established for payment of
Defaulted Interest pursuant to Section 311, Stated Maturity or Maturity, as the
case may be, to the next succeeding Business Day.
SECTION 113. No Personal Liability of Directors, Officers, Employees,
--------------------------------------------------------
Stockholders or Incorporators.
-----------------------------
No director, officer, employee, incorporator or stockholders, as such,
of the Company or any Guarantor of the Notes shall have any liability for any
obligations of the Company or such Guarantor under the Notes, this Indenture or
any Guarantee of the Notes or for any claim based on, in respect of, or by
reason of, such obligations or their creations. 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.
22
SECTION 114. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be original; but such counterparts shall together constitute but one
and the same instrument.
SECTION 115. 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 Trustee, the Note Registrar and anyone else shall have the protection of TIA
(S) 312(c).
ARTICLE TWO. NOTE FORMS
200.
SECTION 201. Forms Generally.
---------------
The Notes and the Trustee's certificate of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with applicable laws or the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note. Each Note shall be dated the date of its
authentication.
Initial Notes offered and sold to the qualified institutional buyers
(as defined in Rule 144A under the Securities Act) in the United States of
America ("Rule 144A Note") will be issued on the Issue Date in the form of a
permanent global Note substantially in the form set forth in Sections 204 and
205 (a "Rule 144A Global Note") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Rule 144A Global Note may be represented by more than
one certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Rule 144A Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Notes offered and sold outside the United States of America
("Regulation S Note") in reliance on Regulation S shall be issued in the form of
a permanent global Note substantially in the form set forth in Sections 204 and
205 (a "Regulation S Global Note"). The Regulation S Global Note will be
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Regulation S Global Note may be represented by more than one certificate, if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Regulation S Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Initial Notes offered and sold to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act) in the
United States of America ("Institutional Accredited Investor Note") will be
issued in the form of a permanent global Note substantially in the form set
forth in Sections 204 and 205 (a "Institutional Accredited Investor Global
Note") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Institutional Accredited Investor Global Note may be represented
by more than one certificate, if so required by the Depositary's rules regarding
the maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Institutional Accredited Investor Global Note
may
23
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
The Rule 144A Global Note, the Regulation S Global Note and the
Institutional Accredited Investor Global Note are sometimes collectively herein
referred to as the "Global Notes".
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes.
24
SECTION 202. Restrictive Legends.
-------------------
Unless and until (i) an Initial Note is sold under an effective
Registration Statement or (ii) an Initial Note is exchanged for an Exchange Note
in connection with an effective Registration Statement, in each case pursuant to
the Registration Rights Agreement, such Rule 144A Global Note and the
Institutional Accredited Investor Global Notes shall bear the following legend
(the "Private Placement Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF SECTION 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL
AMOUNT OF $250,000 OF SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) ABOVE TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E),
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
The Regulation S Global Note shall bear the following legend on the
face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON AND IS
25
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF SECTION 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SUCH SECURITIES, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR
(F) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF
THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED
AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE
DAY ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS
(AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE
ORIGINAL OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
The Global Notes, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF DTC
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
26
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
SECTION 203. OID Legend.
----------
The Senior Subordinated Discount Notes shall also bear the following
legend on the face thereof:
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR THE
PURPOSES OF SECTIONS 1271-1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO
MATURITY OF THE NOTES MAY BE OBTAINED BY CONTACTING THE ISSUER'S INVESTORS
RELATIONS DEPARTMENTS, TELEPHONE NO. (___) ________.
SECTION 204. Form of Senior Subordinated Note.
--------------------------------
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
9 1/2% [Series B]/1/ Senior Subordinated Note due 2007
Paragon Health Network, Inc., a Delaware corporation promises to pay
to [___________], or registered assigns, the principal sum of
[__________________] Dollars on November 1, 2007.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: PARAGON HEALTH NETWORK, INC.
By:_________________________________
[Title]
By:_________________________________
[Title]
__________________________________
/1/ Include only for the Exchange Notes
27
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ XXXXXXXX BANK & TRUST COMPANY
as Trustee, certifies
that this is one of the
Notes referred to
in the Indenture.
By________________________________
Authorized Signatory November 4, 1997
28
[FORM OF REVERSE SIDE OF SENIOR SUBORDINATED NOTE]
9 1/2% [Series B]/2/ Senior Subordinated Note due 2007
1. Interest
--------
Paragon Health Network, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company")) promises to pay interest on the
principal amount of this Note at the rate per annum shown above.
The Company will pay interest semiannually in cash and in arrears to
Holders of record at the close of business on the April 15 and October 15
immediately preceding the interest payment date on May 1 and November 1 of each
year, commencing May 1, 1998. Interest on the Senior Subordinated Notes will
accrue from the most recent date to which interest has been paid on the Senior
Subordinated Notes or, if no interest has been paid, from November 4, 1997. The
Company shall pay interest on overdue principal or premium, if any (plus
interest on such interest to the extent lawful), at the rate borne by the Senior
Subordinated Notes to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on the Notes is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the April 15 or October 15 next preceding the
interest payment date even if the Notes are cancelled, repurchased or redeemed
after the record date and on or before the interest payment date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However,
the Company may pay interest by check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Trustee, Paying Agent and Registrar
-----------------------------------
Initially, IBJ Xxxxxxxx Bank & Trust Company, a New York banking
corporation (the "Trustee"), will act as Trustee, Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Noteholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-
registrar.
4. Indenture
---------
The Company issued the Notes under an Indenture dated as of November
4, 1997 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
__________________________________
/2// Include only for the Initial Notes
-
29
The Notes are general unsecured senior subordinated obligations of the
Company limited to $275 million aggregate principal amount (subject to Section
310 of the Indenture). This Note is one of the [Initial]/3/ Notes referred to
in the Indenture. The Notes include the Initial Notes and any Exchange Notes
issued in exchange for the Initial Notes pursuant to the Indenture and the
Registration Rights Agreement. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the Incurrence of Indebtedness by the Company and
its Restricted Subsidiaries, the payment of dividends on, and the purchase or
redemption of, Capital Stock of the Company and its Restricted Subsidiaries,
certain purchases or redemptions of Subordinated Indebtedness, the sale or
transfer of assets and Capital Stock of Restricted Subsidiaries, investments of
the Company and its Restricted Subsidiaries and transactions with Affiliates.
In addition, the Indenture limits the ability of the Company and its
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Optional Redemption
-------------------
The Senior Subordinated Notes will be redeemable, at the Company's
option, in whole or in part, at any time and from time to time on and after
November 1, 2002 and prior to maturity, upon not less than 30 nor more than 90
days' prior notice mailed by first-class mail to each Holder's registered
address, at the following redemption prices (expressed as a percentage of
principal amount), plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on November 1 of the years set forth below:
Year Redemption Price
---- ----------------
2002.............................. 104.750%
2003.............................. 103.167%
2004.............................. 101.583%
2005 and thereafter............... 100.000%
In addition, at any time and from time to time prior to November 1,
2000, the Company may redeem in the aggregate up to 33-% of the original
aggregate principal amount of the Senior Subordinated Notes with the proceeds of
one or more Equity Offerings by the Company at a redemption price (expressed as
a percentage of principal amount thereof) of 109.5% plus accrued interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 50% of the original aggregate principal
amount of the Notes must remain outstanding after each such redemption and that
any such redemption occurs within 90 days following the closing of any such
Equity Offering.
The aggregate principal amount of the Notes and the Senior
Subordinated Discount Notes to be redeemed shall be allocated by the Company
between the Notes and the Senior Subordinated Discount Notes in the Company's
sole discretion.
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than
90 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations of principal amount larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on all
Notes (or portions thereof) to be redeemed on the redemption date is deposited
with the Paying Agent on or before the
___________________________________
/3/ Include only for the Initial Notes.
30
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Notes (or such portions thereof) called
for redemption.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Notes will have the right to
cause the Company to repurchase all or any part of the Notes of such Holder at a
repurchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of repurchase as provided in, and subject to the
terms of, the Indenture.
8. Subordination and Ranking
-------------------------
The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Notes may be paid. The Company agrees, and each Noteholder by
accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose. The Notes and the Senior
Subordinated Discount Notes will in all respects rank pari passu with each other
and with all other Senior Subordinated Indebtedness of the Company.
9. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange of (i)
any Note selected for redemption (except, in the case of a Note to be redeemed
in part, the portion of the Note not to be redeemed) for a period beginning 15
days before a selection of Notes to be redeemed and ending on the date of such
selection or (ii) any Notes for a period beginning 15 days before an interest
payment date and ending on such interest payment date.
10. Persons Deemed Owners
---------------------
The registered holder of this Note may be treated as the owner of it
for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Notes and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be. The Company in its sole discretion can defease
either or both of the Notes and the Senior Subordinated Discount Notes.
31
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the outstanding
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company and the Trustee may amend the Indenture
or the Notes to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated Notes
in addition to or in place of certificated Notes, or to add guarantees with
respect to the Notes or to secure the Notes, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any Noteholder,
or to provide for the issuance of Exchange Notes. However, no amendment may be
made to the subordination provisions of the Indenture that adversely affects the
rights of any holder of Senior Indebtedness then outstanding unless the holders
of such Senior Indebtedness (or any group or representative thereof authorized
to give a consent) consent to such change.
The Notes and the Senior Subordinated Discount Notes will vote
together as a single class of securities under the Indenture with respect to
matters on which Holders are required or permitted to vote.
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) a default in any
payment of interest on any Note when due (whether or not such payment is
prohibited by Article 13 of the Indenture), continued for 30 days, (ii) a
default in the payment of principal of any Note when due at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment is prohibited by Article 13 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 801 of the Indenture, (iv) the failure by the Company to comply for 30
days after written notice with any of its obligations under Section 1016 of the
Indenture or Sections 1003, 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1017, 1019
or 1020 of the Indenture (in each case, other than a failure to purchase Notes
when required under Sections 1016 or 1017 of the Indenture), (v) the failure by
the Company to comply for 60 days after notice with its other agreements
contained in the Notes or the Indenture, (vi) the failure by the Company or any
Significant Subsidiary to pay any Indebtedness within any applicable grace
period after final maturity or the acceleration of any such Indebtedness by the
holders thereof because of a default if the total amount of such Indebtedness
unpaid or accelerated exceeds $20.0 million, (vii) certain events of bankruptcy,
insolvency or reorganization of the Company or a Significant Subsidiary, (viii)
the rendering of any judgment or decree for the payment of money in an amount
(net of any insurance or indemnity payments actually received in respect thereof
prior to or within 90 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful) in excess of
$20.0 million against the Company or a Significant Subsidiary that is not
discharged, bonded or insured by a third Person if (A) an enforcement proceeding
thereon is commenced or (B) such judgment or decree remains outstanding for a
period of 90 days following such judgment or decree and is not discharged,
waived or stayed or (ix) the failure of any Guarantee of the Notes by a
Guarantor made pursuant to Section 1020 of the Indenture to be in full force and
effect (except as contemplated by the terms thereof or of the Indenture) or the
denial or disaffirmation in writing by any such Guarantor of its obligations
under the Indenture or any such Guarantee if such Default continues for 10 days.
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least a majority in principal amount of the outstanding applicable Notes may
declare all such Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the
32
Trustee in its exercise of any trust or power. The Trustee may withhold from
Noteholders notice of any continuing Default or Event of Default (except a
Default or Event of Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Company or its affiliates and may otherwise deal with the
Company or its affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
17. Authentication
--------------
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
33
[18. Registration Rights
-------------------
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of November 4, 1997 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that either (i) an Exchange Offer Registration Statement
is not filed with the Commission on or prior to 60 days after the Issue Date,
(A) an Exchange Offer Registration Statement or a Shelf Registration Statement
is not declared effective within 150 days after the Issue Date, or (B) the
Exchange Offer is not consummated on or prior to 180 days after the Issue Date
in respect of tendered Notes and a Shelf Registration Statement has not been
declared effective or a Shelf Registration Statement is filed and declared
effective within 150 days after the Issue Date but shall thereafter cease to be
effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 45 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (A) and (B), a "Registration Default"), the Company will pay
liquidated damages to each holder of Transfer Restricted Securities (as defined
in the Registration Rights Agreement), during the period of one or more such
Registration Defaults, in an amount equal to $.192 per week per $1,000 principal
amount of the Notes constituting Transfer Restricted Securities held by such
holder until the applicable Registration Statement is filed or declared
effective, the Exchange Offer is consummated or the Shelf Registration Statement
again becomes effective, as the case may be, provided that, except in certain
limited circumstances, the Company's obligation to pay liquidated damages will
terminate upon consummation of the Exchange Offer. All accrued liquidated
damages shall be paid to holders in the same manner as interest payments on the
Notes on semi-annual payment dates which correspond to interest payment dates
for the Notes. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease.]/4//
-
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. Governing Law
-------------
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY
LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
__________________________________
/4// Include only for the Initial Notes
-
34
The Company will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture. Requests may be made
to:
Paragon Health Network, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention of General Counsel
35
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:_____________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for, STAMP), pursuant to S.E.C. Rule
17Ad-15.
[In connection with any transfer or exchange of any of the Notes evidenced by
this certificate occurring prior to the date that is two years after the later
of the date of original issuance of such Notes and the last date, if any, on
which such Notes were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
1 [_] acquired for the undersigned's own account, without transfer; or
2 [_] transferred to the Company; or
3 [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
4 [_] transferred pursuant to an effective registration statement under
the Securities Act; or
5 [_] transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
6 [_] transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933), that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter appears as Exhibit E to the Indenture); or
36
7 [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (5), (6) or (7) is
checked, the Trustee or the Company may require, prior to registering any such
transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
_____________________________
Signature
Signature Guarantee:
____________________________________ _____________________________
(Signature must be guaranteed) Signature
_________________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15]./5//
-
___________________________________
/5// Include only for the Initial Notes
-
37
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount of this Global Signature of authorized
Principal Amount of Principal Amount of Note following such decrease signatory of Trustee or
this Global Note this Global Note or increase Notes Custodian
38
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 1016 or 1017 of the Indenture, check the box:
[__]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 1016 or 1017 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ____________________________________________
(Sign exactly as your name appears on the
other side of the Note)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
39
SECTION 205. Form of Senior Subordinated Discount Note.
-----------------------------------------
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
101/2% [Series B]/6// Senior Subordinated Discount Note due 2007
-
Paragon Health Network, Inc., a Delaware corporation promises to pay
to [___________], or registered assigns, the principal sum of
[__________________] Dollars on November 1, 2007.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
This Note shall not bear interest prior to November 1, 2002. From
November 4, 1997 through November 1, 2002, the Accreted Value of this Note will
increase as specified on the reverse side hereof.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: PARAGON HEALTH NETWORK, INC.
By:________________________________________
[Title]
By:________________________________________
[Title]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ XXXXXXXX BANK & TRUST COMPANY
as Trustee, certifies
that this is one of
the Notes referred
to in the Indenture.
By_____________________________
Authorized Signatory November 4, 1997
_________________________
/6// Include only for the Exchange Notes
-
40
[FORM OF REVERSE SIDE OF SENIOR SUBORDINATED DISCOUNT NOTE]
10 1/2% [Series B]/7/ Senior Subordinated Discount Note due 2007
-
1. Interest
--------
Paragon Health Network, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company")) promises to pay interest on the
principal amount of this Note as described below.
The Senior Subordinated Discount Notes due 2007 (the "Notes") will
accrete in value until November 1, 2002 at a rate of 10.57% per annum,
compounded semiannually, to an aggregate principal amount of $294,000,000. Cash
interest will not accrue on the Senior Subordinated Discount Notes prior to
November 1, 2002. Thereafter, interest will accrue at the rate of 10 1/2% per
annum and will be payable semiannually in cash and in arrears to the Holders of
record on each April 15 or October 15 immediately preceding the interest payment
date on May 1 and November 1 of each year, commencing May 1, 2003. Cash
interest on the Senior Subordinated Discount Notes will accrue from the most
recent interest payment date to which interest has been paid or, if no interest
has been paid, from November 1, 2002. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on the Notes is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the April 15 or October 15 next preceding the
interest payment date even if the Notes are cancelled, repurchased or redeemed
after the record date and on or before the interest payment date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However,
the Company may pay interest by check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Trustee, Paying Agent and Registrar
-----------------------------------
Initially, IBJ Xxxxxxxx Bank & Trust Company, a New York banking
corporation ("Trustee"), will act as Trustee, Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Noteholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-
registrar.
4. Indenture
---------
The Company issued the Notes under an Indenture dated as of November
4, 1997 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
__________________________________
/7// Include only for the Exchange Notes
-
41
The Notes are general unsecured senior subordinated obligations of the
Company limited to $294 million aggregate principal amount (subject to Section
310 of the Indenture). This Note is one of the Initial Notes referred to in the
Indenture. The Notes include the Initial Notes and any Exchange Notes issued in
exchange for the Initial Notes pursuant to the Indenture and the Registration
Rights Agreement. The Initial Notes and the Exchange Notes are treated as a
single class of securities under the Indenture. The Indenture imposes certain
limitations on the Incurrence of Indebtedness by the Company and its Restricted
Subsidiaries, the payment of dividends on, and the purchase or redemption of,
Capital Stock of the Company and its Restricted Subsidiaries, certain purchases
or redemptions of Subordinated Indebtedness, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, investments of the Company and its
Restricted Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. Optional Redemption
-------------------
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time and from time to time on and after November 1, 2002 and prior
to maturity, upon not less than 30 nor more than 90 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as a percentage of the Accreted value thereof),
plus accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record dated to receive interest due
on the relevant interest payment date), if redeemed during the 12 month period
beginning on November 1 of the years indicated below:
Year Redemption Price
---- ----------------
2002.............................. 105.250%
2003.............................. 103.500%
2004.............................. 101.750%
2005 and thereafter............... 100.000%
In addition, at any time and from time to time prior to November 1,
2000, the Company may redeem up to 33% of the originally issued principal
amount at maturity of Notes at a redemption price equal to 110.5% of the
Accreted Value at the redemption date of the Notes so redeemed with the net
proceeds of one or more Equity Offerings by the Company; provided, however, that
at least 50% of the originally issued principal amount at maturity of Notes must
remain outstanding immediately after each such redemption and that any such
redemption occurs within 90 days following the closing of any such Equity
Offering.
The aggregate principal amount of the Notes and the Senior
Subordinated Notes to be redeemed shall be allocated by the Company between the
Notes and the Senior Subordinated Notes in the Company's sole discretion.
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than
90 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations of principal amount larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on all
Notes (or portions thereof) to be redeemed on the redemption date is deposited
with the Paying Agent on or before the redemption date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Notes (or such portions thereof) called for redemption.
42
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Notes will have the right to
cause the Company to repurchase all or any part of the Notes of such Holder at a
repurchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of repurchase as provided in, and subject to the
terms of, the Indenture.
8. Subordination and Ranking
-------------------------
The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Notes may be paid. The Company agrees, and each Noteholder by
accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose. The Notes and the Senior
Subordinated Notes will in all respects rank pari passu with each other and with
all other Senior Subordinated Indebtedness of the Company.
9. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange of (i)
any Note selected for redemption (except, in the case of a Note to be redeemed
in part, the portion of the Note not to be redeemed) for a period beginning 15
days before a selection of Notes to be redeemed and ending on the date of such
selection or (ii) any Notes for a period beginning 15 days before an interest
payment date and ending on such interest payment date.
10. Persons Deemed Owners
---------------------
The registered holder of this Note may be treated as the owner of it
for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Notes and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be. The Company in its sole discretion can defease
either or both of the Notes and the Senior Subordinated Notes.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the outstanding
Notes. Subject to certain
43
exceptions set forth in the Indenture, without the consent of any Noteholder,
the Company and the Trustee may amend the Indenture or the Notes to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Notes in addition to or in place of
certificated Notes, or to add guarantees with respect to the Notes or to secure
the Notes, or to add additional covenants or surrender rights and powers
conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Noteholder, or to provide for the issuance of
Exchange Notes. However, no amendment may be made to the subordination
provisions of the Indenture that adversely affects the rights of any holder of
Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
The Notes and the Senior Subordinated Notes will vote together as a
single class of securities under the Indenture with respect to matters on which
Holders are required or permitted to vote.
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) a default in any
payment of interest on any Note when due (whether or not such payment is
prohibited by Article 13 of the Indenture), continued for 30 days, (ii) a
default in the payment of principal of any Note when due at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment is prohibited by Article 13 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 801 of the Indenture, (iv) the failure by the Company to comply for 30
days after written notice with any of its obligations under Section 1016 of the
Indenture or Sections 1003, 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1017, 1019
or 1020 of the Indenture (in each case, other than a failure to purchase Notes
when required under Sections 1016 or 1017 of the Indenture), (v) the failure by
the Company to comply for 60 days after notice with its other agreements
contained in the Notes or the Indenture, (vi) the failure by the Company or any
Significant Subsidiary to pay any Indebtedness within any applicable grace
period after final maturity or the acceleration of any such Indebtedness by the
holders thereof because of a default if the total amount of such Indebtedness
unpaid or accelerated exceeds $20.0 million, (vii) certain events of bankruptcy,
insolvency or reorganization of the Company or a Significant Subsidiary, (viii)
the rendering of any judgment or decree for the payment of money in an amount
(net of any insurance or indemnity payments actually received in respect thereof
prior to or within 90 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful) in excess of
$20.0 million against the Company or a Significant Subsidiary that is not
discharged, bonded or insured by a third Person if (A) an enforcement proceeding
thereon is commenced or (B) such judgment or decree remains outstanding for a
period of 90 days following such judgment or decree and is not discharged,
waived or stayed or (ix) the failure of any Guarantee of the Notes by a
Guarantor made pursuant to Section 1020 of the Indenture to be in full force and
effect (except as contemplated by the terms thereof or of the Indenture) or the
denial or disaffirmation in writing by any such Guarantor of its obligations
under the Indenture or any such Guarantee if such Default continues for 10 days.
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least a majority in principal amount of the outstanding applicable Notes may
declare all such Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
15. Trustee Dealings with the Company
---------------------------------
44
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Company or its affiliates and may otherwise deal with the
Company or its affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
17. Authentication
--------------
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
[18. Registration Rights
-------------------
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of November 4, 1997 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that either (i) an Exchange Offer Registration Statement
is not filed with the Commission on or prior to 60 days after the Issue Date,
(A) an Exchange Offer Registration Statement or a Shelf Registration Statement
is not declared effective within 150 days after the Issue Date, or (B) the
Exchange Offer is not consummated on or prior to 180 days after the Issue Date
in respect of tendered Notes and a Shelf Registration Statement has not been
declared effective or a Shelf Registration Statement is filed and declared
effective within 150 days after the Issue Date but shall thereafter cease to be
effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 45 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (A) and (B), a "Registration Default"), the Company will pay
liquidated damages to each holder of Transfer Restricted Securities (as defined
in the Registration Rights Agreement), during the period of one or more such
Registration Defaults, in an amount equal to $.192 per week per $1,000 principal
amount of the Notes constituting Transfer Restricted Securities held by such
holder until the applicable Registration Statement is filed or declared
effective, the Exchange Offer is consummated or the Shelf Registration Statement
again becomes effective, as the case may be, provided that, except in certain
limited circumstances, the Company's obligation to pay liquidated damages will
terminate upon consummation of the Exchange Offer. All accrued liquidated
damages shall be paid to holders in the same manner as interest payments on the
Notes on semi-annual payment dates which correspond to interest payment dates
for the Notes. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease.]/8//
-
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
___________________________
/8// Include only for Initial Notes.
-
45
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. Governing Law
-------------
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY
LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
The Company will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture. Requests may be made
to:
Paragon Health Network, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention of General Counsel
46
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule -15.
In connection with any transfer or exchange of any of the Notes evidenced by
this certificate occurring prior to the date that is two years after the later
of the date of original issuance of such Notes and the last date, if any, on
which such Notes were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
1[_] acquired for the undersigned's own account, without transfer; or
2[_] transferred to the Company; or
3[_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
4[_] transferred pursuant to an effective registration statement under
the Securities Act; or
5[_] transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
6[_] transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933), that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter appears as Exhibit E to the Indenture); or
47
7[_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (5), (6) or (7) is
checked, the Trustee or the Company may require, prior to registering any such
transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
__________________________________ ______________________________
(Signature must be guaranteed) Signature
____________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Principal Amount of this Global Signature of authorized
Date of Amount of decrease in Principal Amount of increase in Principal Note following such decrease or signatory of Trustee or
Exchange Amount of this Global Note Amount of this Global Note increase Notes Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
[_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.6 or 4.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ___________________________________________
(Sign exactly as your name appears on
the other side of the Note)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
50
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL 144A CERTIFICATES]
In connection with any transfer of this Note occurring prior to the
date that is the earlier of the date of an effective Registration Statement (as
defined in the Registration Rights Agreement dated as of November 4, 1997) or
November 4, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
---------
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided
by Rule 144A thereunder.
or
--
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished that comply with the
conditions of transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date: ________________ _______________________________________________________
NOTICE: The signature must correspond with the name
as written upon the face of the within-
mentioned instrument in every particular,
without alteration or any change whatsoever.
Signature Guarantee:_________________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date: ________________ _______________________________________________
NOTICE: To be executed by an executive officer.
51
SECTION 206. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned Indenture.
IBJ Xxxxxxxx Bank & Trust
Company, as Trustee
By _____________________________
Authorized Signatory
Dated: __________________
ARTICLE THREE. THE NOTES
300.
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $275 million, in the case of the
Senior Subordinated Notes, and $294 million, in the case of Senior Subordinated
Discount Notes, except for Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Section 304, 305, 306, 307, 310, 906, 1016, 1017 or 1108 or pursuant to an
Exchange Offer.
The Initial Notes shall be known and designated as the "9 1/2% Senior
Subordinated Notes due 2007" and "10 1/2% Senior Subordinated Discount Notes due
2007," as applicable, and the Exchange Notes shall be known and designated as
the "9 1/2% Series B Senior Subordinated Notes due 2007" and "10 1/2% Series B
Senior Subordinated Discount Notes," as applicable, in each case, of the
Company. The Stated Maturity of the Senior Subordinated Notes shall be November
1, 2007, and they shall bear interest at the rate of 9 1/2% per annum from
November 4, 1997, or from the most recent interest payment date to which
interest has been paid or duly provided for, payable semiannually in cash and in
arrears to the Person in whose name the Note (or any predecessor Note) is
registered at the close of business on the April 15 and October 15 immediately
preceding the interest payment date on May 1 and November 1 of each year,
commencing May 1, 1998. The Stated Maturity of the Senior Subordinated Discount
Notes shall be November 1, 2007, and they will accrete until November 1, 2002 at
a rate of 10.57% per annum, compounded semiannually. Cash interest will not
accrue on the Senior Subordinated Discount Notes prior to November 1, 2002.
Thereafter, interest will accrue at the rate of 10 1/2% per annum and will be
payable semiannually in cash and in arrears to the Person in whose name the Note
(or any predecessor Note) is registered at the close of business on the April 15
or October 15 next preceding such interest payment date, commencing May 1, 2003.
Cash interest on the Senior Subordinated Discount Notes will accrue from the
most recent interest payment date to which interest has been paid or, if no
interest has been paid, from November 1, 2002. All references to the principal
amount of the Senior Subordinated Discount Notes herein are references to the
principal amount at final maturity. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months, until the principal thereof is
paid or duly provided for. Interest on any overdue principal, interest (to the
extent lawful) or premium, if any, shall be payable on demand.
52
The principal of (and premium, if any) and interest on the Notes shall
be payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; provided, however, that, at the option of the
Company, interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Note Register.
Holders shall have the right to require the Company to purchase their
Notes, in whole or in part, in the event of a Change of Control pursuant to
Section 1016.
The Notes shall be subject to repurchase by the Company pursuant to an
Asset Disposition as provided in Section 1017.
The Notes shall be redeemable as provided in Article Eleven and in the
Notes.
The Indebtedness evidenced by the Notes shall be subordinated in right
of payment to Senior Indebtedness as provided in Article Thirteen.
SECTION 302. Denominations.
-------------
The Notes shall be issuable only in fully registered form, without
coupons, and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Notes shall be executed on behalf of the Company by two Officers,
of which at least one Officer shall be the President or the Chief Financial
Officer of the Company. The signature of any Officer on the Notes may be manual
or facsimile signatures of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Initial Notes executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee in accordance with
such Company Order shall authenticate and deliver such Initial Notes directing
the Trustee to authenticate the Notes and certifying that all conditions
precedent to the issuance of Notes contained herein have been fully complied
with, and the Trustee in accordance with such Company Order shall authenticate
and deliver such Initial Notes. On Company Order, the Trustee shall
authenticate for original issue Exchange Notes in an aggregate principal amount
not to exceed $275,000,000, in the case of the Senior Subordinated Notes, and
$294,000,000, in the case of Senior Subordinated Discount Notes; provided that
such Exchange Notes shall be issuable only upon the valid surrender for
cancellation of Initial Notes of a like aggregate principal amount in accordance
with an Exchange Offer pursuant to the Registration Rights Agreement. In each
case, the Trustee shall be entitled to receive an Officers' Certificate and an
Opinion of Counsel of the Company that it may reasonably request in connection
with such authentication of Notes. Such order shall specify the amount of Notes
to be authenticated and the date on which the original issue of Initial Notes or
Exchange Notes is to be authenticated.
Each Note shall be dated the date of its authentication.
53
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company or any Guarantor (if applicable), pursuant to
Article Eight, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Guarantor shall have been merged, or the Person which shall have received a
conveyance, transfer, lease or other disposition as aforesaid, shall have
executed an indenture supplemental hereto with the Trustee pursuant to Article
Eight, any of the Notes authenticated or delivered prior to such consolidation,
merger, conveyance, transfer, lease or other disposition may, from time to time,
at the request of the successor Person, be exchanged for other Notes executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Notes
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Notes as specified in such request for the purpose of such exchange. If Notes
shall at any time be authenticated and delivered in any new name of a successor
Person pursuant to this Section 303 in exchange or substitution for or upon
registration of transfer of any Notes, such successor Person, at the option of
the Holders but without expense to them, shall provide for the exchange of all
Notes at the time Outstanding for Notes authenticated and delivered in such new
name.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes on behalf of the Trustee. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Note Registrar or Paying Agent
to deal with the Company and its Affiliates.
SECTION 304. Temporary Notes.
---------------
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination. Temporary Notes shall be
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The
54
Note Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
the Note Register shall be open to inspection by the Trustee. The Trustee is
hereby initially appointed as security registrar (the Trustee in such capacity,
together with any successor of the Trustee in such capacity, the "Note
Registrar") for the purpose of registering Notes and transfers of Notes as
herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interest in such Global Note may
be effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange (including an exchange of Initial Notes
for Exchange Notes), the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive; provided that no exchange of Initial Notes for Exchange
Notes shall occur until an Exchange Offer Registration Statement shall have been
declared effective by the Commission, the Trustee shall have received an
Officers' Certificate confirming that the Exchange Offer Registration Statement
has been declared effective by the Commission and the Initial Notes to be
exchanged for the Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906, 1016, 1017 or 1108, not involving any
transfer.
The Register shall be in written form in the English language or in
any other form including computerized records, capable of being converted into
such form within a reasonable time.
SECTION 306. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) Each Global Note initially shall (i) be registered in the name of
the Depositary for such global Note or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear legends
as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes
55
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 307. If required to do so pursuant to any applicable
law or regulation, beneficial owners may obtain Notes in definitive form
("Physical Notes") in exchange for their beneficial interests in a Global Note
upon written request in accordance with the Depositary's and the Registrar's
procedures. In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in a Global Note if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Note or the Depositary ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depositary is required to
be so registered in order to act as Depositary, and in each case a successor
depositary is not appointed by the Company within 90 days of such notice or,
(ii) the Company executes and delivers to the Trustee and Note Registrar an
Officers' Certificate stating that such Global Note shall be so exchangeable or
(iii) an Event of Default has occurred and is continuing and the Note Registrar
has received a request from the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Note pursuant to subsection (b) of this Section to
beneficial owners who are required to hold Physical Notes, the Note Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of such Global Note in an amount equal to the principal amount of the
beneficial interest in 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 an entire Global Note to
beneficial owners pursuant to subsection (b) of this Section, such 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 Depositary in exchange for its beneficial
interest in such Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note delivered in exchange for an interest in a
Global Note pursuant to subsection (c) or subsection (d) of this Section shall,
except as otherwise provided by paragraph (a)(i)(x) and paragraph (f) of Section
307, bear the applicable legend regarding transfer restrictions applicable to
the Physical Note set forth in Section 202.
(f) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 307. Special Transfer Provisions.
---------------------------
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior
to the expiration of the Resale Restriction Termination Date (as defined in
Section 202 hereof):
(i) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB shall be
made upon the representation of the transferee 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 "qualified
institutional buyer" within the meaning of Rule 144A under the Securities
Act of 1933, as amended, and is aware that the sale to
56
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 its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the Trustee
or its agent of a certificate substantially in the form set forth in
Section 308 hereof from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 309 hereof from
the proposed transferee and, if requested by the Company or the Trustee,
the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee
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 "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act of 1933, as amended, 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 its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in Section 308 hereof from the proposed transferee and, if requested
by the Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them; and
(iii) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon, if requested by
the Company or the Trustee, receipt by the Trustee or its agent of an
opinion of counsel, certification and/or other information satisfactory to
each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring certification set forth
in Section 308 or any additional certification.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Note Registrar shall deliver only Notes that bear the
Private Placement Legend unless there is delivered to the Note Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
57
(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.
(e) The Company shall deliver to the Trustee an Officer's
Certificate setting forth the dates on which the Restricted Period terminates
(the "Resale Restriction Termination Date").
The Note Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Note Registrar.
(f) No Obligation of the Trustee: (i) The Trustee shall have no
----------------------------
responsibility or obligation to any beneficial owner of a Global Note, a member
of, or a participant in the Depository or other Person with respect to any
ownership interest in the Notes, with respect to the accuracy of the records of
the Depository or its nominee or of any participant or member thereof or with
respect to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such Notes.
All notices and communications to be given to the Holders and all payments to be
made to Holders under the Notes shall be given or made only to the registered
Holders (which shall be the Depository or its nominee in the case of a Global
Note). The rights of beneficial owners in any Global Note in global form shall
be exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected
and indemnified pursuant to Section 607 in relying upon information furnished by
the Depository with respect to any beneficial owners, its members and
participants.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including without limitation any transfers between or
among Depository participants, members or beneficial owners in any Global Note)
other than to require delivery of such certificates and other documentation of
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 308. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers to Institutional Accredited Investors.
-----------------------------------------------
[date]
PARAGON HEALTH NETWORK, INC.
c/o IBJ Xxxxxxxx Bank & Trust Company, as Trustee
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $______
principal amount of the [9 1/2% Senior Subordinated Notes due 2007] [10 1/2%
Senior Subordinated Discount Notes due 2007] (the "Notes") of Paragon Health
Network, Inc. (the "Company").
58
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
(1) We are an institutional "accredited investor" (as defined in
Rules 501(a)(1), (2), (3) and (7) under the Securities Act of 1933, as amended
(the "Securities Act")), purchasing for our own account or for the account of an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We 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 invest in
or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
(2) We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to
a registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional "accredited investor", in each case
in a minimum principal amount of Notes of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Termination Date of the Notes pursuant to clauses (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:
BY:
Upon transfer the Notes would be registered in the name of the new beneficial
owner as follows:
59
TAXPAYER ID
NAME ADDRESS NUMBER:
------ ------- ------
Very truly yours,
[Name of Transferor]
By:______________________________ _________________________________
Name: Signature Medallion Guaranteed
Title:
SECTION 309. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S.
----------------------------------
[date]
IBJ Xxxxxxxx Bank & Trust Company, as Trustee
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: PARAGON HEALTH NETWORK, INC. (the "Company")
[9 1/2% Senior Subordinated Notes due 2007]
[10 1/2% Senior Subordinated Discount Notes] (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 United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Notes was not made to a person in the United
States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) 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;
(c) 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; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
60
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
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 Signature Medallion Guaranteed
SECTION 310. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company,
any Guarantor (if applicable) and the Trustee such security or indemnity, in
each case, as may be required by them to save each of them harmless, then, in
the absence of notice to the Company any Guarantor or the Trustee that such Note
has been acquired by a bona fide purchaser, the Company shall execute and upon
Company Order the Trustee shall authenticate and deliver, in exchange for any
such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new
Note of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, any Guarantor and any other
obligor upon the Notes, whether or not the mutilated, destroyed, lost or stolen
Note shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 311. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any interest payment date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; provided,
however, that each installment of interest may at the Company's option be paid
by (i) mailing a check for such interest, payable to or upon the written order
of the Person entitled thereto pursuant to Section 312, to the address
61
of such Person as it appears in the Note Register or (ii) wire transfer to an
account located in the United States maintained by the payee.
Any interest on any Note which is payable, but is not paid when the
same becomes due and payable and such nonpayment continues for a period of 30
days shall forthwith cease to be payable to the Holder on the Regular Record
Date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Notes (such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") shall be paid by the Company, at its election in each
case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
(not less than 30 days after such notice) of the proposed payment (the
"Special Interest Payment Date"), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a record date (the
"Special Record Date") for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
Special Interest Payment Date and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date, and in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date and Special
Interest Payment Date therefor to be given in the manner provided for in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor having been so
given, such Defaulted Interest shall be paid on the Special Interest
Payment Date to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 312. Persons Deemed Owners.
---------------------
Prior to the due presentment of a Note for registration of transfer,
the Company, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the Person in whose name such Note is registered as the owner
of such Note for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 311) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of the
Company, any Guarantor, the Trustee nor any agent of the Company, any Guarantor
or the Trustee shall be affected by notice to the contrary.
62
SECTION 313. Cancellation.
------------
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. If the
Company shall acquire any of the Notes other than as set forth in the preceding
sentence, the acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 313. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes held by the Trustee shall be destroyed by the Trustee and
the Trustee shall send a certificate of such destruction to the Company.
SECTION 314. Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 315. CUSIP Numbers.
-------------
The Company in issuing Notes may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers,
either as printed on the Notes or as contained in any notice of a redemption or
repurchase and that reliance may be placed only on the serial or other
identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such CUSIP
numbers. The Company will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE FOUR. SATISFACTION AND DISCHARGE
400.
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes expressly provided for herein or pursuant hereto) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(i) either
(A) all Notes theretofore authenticated and delivered (other than
(1) Notes which have been lost, stolen or destroyed and which have
been replaced or paid as provided in Section 310 and (2) Notes for
whose payment money has theretofore been deposited in trust with the
Trustee or any Paying Agent or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all Notes not theretofore delivered to the Trustee for
cancellation
(1) have become due and payable by reason of the making of a
notice of redemption or otherwise; or
63
(2) will become due and payable at their Stated Maturity
within one year; or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in cash or Government Obligations
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee for cancellation, for
principal of (and premium, if any) and interest to the date of such
deposit (in the case of Notes which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(ii) 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 will
not result in a breach or violation of, or constitute a default under, any
other instrument or agreement to which the Company or any Guarantor of the
Notes is a party or by which it is bound;
(iii) the Company or any Guarantor has paid or caused to be paid all
sums payable hereunder by the Company or any Guarantor in connection with
all the Notes including all fees and expenses of the Trustee;
(iv) the Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of such Notes at
maturity or the Redemption Date, as the case may be; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture and the termination of the Company's obligation hereunder
have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (i) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive any such satisfaction and discharge.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 401 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 any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 401; provided that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement
64
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money or Government Obligations
held by the Trustee or Paying Agent.
ARTICLE FIVE. REMEDIES
500.
SECTION 501. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in any payment of interest on any Note when the
same becomes due and such default continues for a period of 30 days whether
or not such payment shall be prohibited by Article Thirteen;
(ii) default in the payment of the principal of any Note when
the same becomes due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, whether or not such
payment shall be prohibited by Article Thirteen;
(iii) the Company fails to comply with Section 801;
(iv) the Company fails to comply with Section 1003, 1009, 1010,
1011, 1012, 1013, 1014, 1015, 1016, 1017, 1019 or 1020 (other than a
failure to purchase Notes when required under Section 1016 or 1017) and
such failure continues for 30 days after the notice specified below;
(v) the Company fails to comply with any of its agreements in
the Notes or this Indenture (other than those referred to in (i), (ii),
(iii) or (iv) above) and such failure continues for 60 days after the
notice specified below;
(vi) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or the
acceleration by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $20 million;
(vii) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against
it in an involuntary case;
(C) consents to the appointment of a Custodian of it or
for any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws relating
to insolvency; or
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
65
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 90 days;
(ix) any judgment or decree for the payment of money in excess of $20
million (net of any insurance or indemnity payments actually received in
respect thereof prior to or within 90 days from the entry thereof, or to be
received in respect thereof in the event any appeal thereof shall be
unsuccessful) is rendered against the Company or any Significant Subsidiary
that is not discharged, or bonded or insured by a third Person and either
(A) an enforcement proceeding has been commenced upon such judgment or
decree or (B) such judgment or decree remains outstanding for a period of
90 days following the entry of such judgment or decree and is not
discharged, waived or stayed; or
(x) the failure of any Notes Guarantee by a Guarantor made pursuant
to Section 1020 to be in full force and effect (except as contemplated by
the terms thereof or of this Indenture) or the denial or disaffirmation in
writing by any such Guarantor of its obligations under this Indenture or
any such Guarantee of the Notes if such Default continues for 10 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
A Default under clause (iv) or (v) above shall not constitute an Event
of Default until the Trustee or the Holders of at least 25% in principal amount
of the outstanding Notes notify the Company of the Default and the Company does
not cure such Default within the time specified in clause (iv) or (v), as the
case may be, after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clause (iv), (v) or (viii) above, its status and what
action the Company is taking or proposes to take with respect thereto.
If a Default occurs and is continuing and is known to the Trustee, the
Trustee must mail to each Holder notice of the Default within 90 days after it
occurs. Except in the case of a Default in the payment of principal of, premium,
if any, or interest on any Note, the Trustee may withhold such notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of the Holders. In addition, the Company
is required to deliver to the Trustee, within 120 days after the end of each
fiscal year, a certificate indicating whether the signers thereof know of any
Default that occurred during the previous year.
66
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than by reason of an Event of Default
specified in Section 501(vii) or 501(viii)) occurs and is continuing, the
Trustee by notice to the Company or the Holders of at least a majority in
principal amount of the applicable Notes Outstanding may declare the principal
(and premium, if any), accrued and unpaid interest and any other monetary
obligations on all such then outstanding Notes to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders). Upon the effectiveness of such declaration, such principal (and
premium, if any) and interest will be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default specified in
Section 501(vii) or 501(viii) occurs and is continuing, then the principal
amount of all the Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
The Holders of a majority in principal amount of the outstanding Notes
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. The Trustee may
rely upon such notice of rescission without nay independent investigation as to
the satisfaction of the conditions in the preceding sentence. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
If an Event of Default specified in Section 501(i) or 501(ii) occurs
and is continuing, the Trustee, in its own name as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any Guarantor (in accordance with the
applicable Guarantee of the Notes) or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company, any Guarantor or any other obligor upon
the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or any Guarantee of the Notes by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, including, seeking recourse against any Guarantor
pursuant to the terms of any Guarantee of the Notes, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy
including, without limitation, seeking recourse against any Guarantor pursuant
to the terms of a Guarantee of the Notes, or to enforce any other proper remedy,
subject however to Section 513. No recovery of any such judgment upon any
property of the Company or any Guarantor shall affect or impair any rights,
powers or remedies of the Trustee or the Holders.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Guarantor, upon the Notes or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
67
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes, to
take such other actions (including participating as a member, voting or
otherwise, of any official committee of creditors appointed in such matter)
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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; provided, however, that the
Trustee may, on behalf of such Holders, vote for the election of a trustee in
bankruptcy or other similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture, the Notes or the
Guarantees of the Notes may be prosecuted and enforced by the Trustee without
the possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Subject to Article Thirteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To holders of Senior Indebtedness to the extent required by
Article Thirteen;
THIRD: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Notes for principal (and premium, if any) and interest,
respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled
thereto, including the Company or any other obligor on the Notes, as their
interests may appear or as a court of competent jurisdiction may direct,
provided that all sums due and owing to the Holders and the Trustee have
been paid in full as required by this Indenture.
68
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(ii) the Holders of at least 25% in principal amount of the
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(v) the Holders of a majority in principal amount of the
outstanding Notes do not give the Trustee a direction inconsistent with the
request during such 60-day period.
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, any Note or any Guarantee of the Notes to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, any Note or any Guarantee of the Notes, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture (other than
Article XIII), the Holder of any Note shall have the right, which is absolute
and unconditional, to receive payment, as provided herein (including, if
applicable, Article Eleven) and in such Note of the principal of (and premium,
if any) and (subject to Section 311) interest on such Note on the respective
Stated Maturities expressed in such Note (or, in the case of redemption or
repurchase, on the Redemption Date or repurchase) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. 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 Guarantee of the Notes and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, any
Guarantor, any other obligor on the Notes, the Trustee and the Holders shall 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.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 310, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other
69
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
------------------
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture or any Guarantee of the Notes,
(ii) the Trustee need not take any action which might involve
it in personal liability or be unduly prejudicial to the Holders not
consenting, it being understood that (subject to Section 601) the Trustee
shall have no duty to ascertain whether or not such actions or forbearance
are unduly prejudicial to such Holders; and
(iii) subject to the provisions of Section 315 of the Trust
Indenture Act, the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Prior to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Sections 508 and 902, the Holders of a majority in
aggregate principal amount of the Outstanding Notes (including consents obtained
in connection with a tender offer or exchange offer for the Notes) may on behalf
of the Holders of all the Notes, by written notice to the Trustee, waive any
existing Default or Event of Default and its consequences under this Indenture
or any Guarantee of the Notes except a continuing Default or Event of Default in
the payment of interest on, premium, if any, or the principal of, any such Note
held by a non-consenting Holder, or in respect of a covenant or a provision
which cannot be amended or modified without the consent of all Holders.
In the event that any Event of Default specified in Section 501(vi)
shall have occurred and be continuing, such Event of Default and all
consequences thereof (including without limitation any acceleration or resulting
payment default) shall be annulled, waived and rescinded, automatically and
without any action by the Trustee or the Holders of the Notes, if within 30 days
after such Event of Default arose (i) the Indebtedness that is the basis for
such Event of Default has been discharged, or (ii) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default, or (iii) if the Default that is the basis
for such Event of Default has been cured.
70
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------
The Company, the Guarantors and any other obligors upon the Notes,
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which would prohibit or forgive the Company, any
Guarantor or any such obligor from paying all or any portion of the principal
of, premium, if any, or interest on the Notes contemplated herein or in the
Notes or which may affect the covenants or the performance of this Indenture;
and each of the Company, any Guarantor and any such obligor (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Notes, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Note on or after the
respective Stated Maturities expressed in such Note (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX. THE TRUSTEE 600.
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a Default or an Event of
Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and the Trustee
should not be liable except for the performance of such duties as
specifically set forth in the Indenture and no others; and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith or willful misconduct 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; but in the case of any such certificates or opinions, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but not to verify
the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Trust Officer of the Trustee has actual knowledge or of
which written notice of such Default or Event of
71
Default shall have been given to the Trustee by the Company, any other obligor
of the Notes or by any Holder, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(i) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in aggregate principal amount of
the Outstanding Notes relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section and to the TIA.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such Default hereunder actually known to a Trust Officer of
the Trustee, unless such Default shall have been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest on any Note, the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Trust Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders; and provided further that in the case of any
Default of the character specified in Section 501(iii) no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
Notwithstanding anything to the contrary expressed in this Indenture, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
hereunder unless and until the Trustee shall have received written notice
thereof from the Company at its principal Corporate Trust Office as specified in
Section 105, except in the case of an Event of Default under Sections 501(i) or
501(ii) (provided that the Trustee is the Paying Agent).
SECTION 603. Certain Rights 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 their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Subject to the provisions of TIA Sections 315(a) through 315(d):
(i) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon (whether in its original or facsimile
form) any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
72
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties
and the Trustee need not investigate any fact or matter stated in the
documents;
(ii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(iii) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith or willful misconduct on its part, request and rely
upon an Officers' Certificate or an Opinion of Counsel and shall not liable
for any action it takes or omits to take in good faith reliance on such
Officer's Certificate or Opinion of Counsel;
(iv) the Trustee may consult with counsel of its selection and
any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to the Trustee against the costs, expenses, losses and
liabilities which might be incurred by it in compliance with such request
or direction;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(viii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(c) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
73
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Notes.
-----
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness and
it shall not be responsible for the Company's use of the proceeds from the
Notes. The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Notes, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the Notes
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee shall
not be accountable for the use or application by the Company of the proceeds of
the Notes.
SECTION 605. May Hold Notes.
--------------
The Trustee, any Paying Agent, any Note Registrar, any Authenticating
Agent or any other agent of the Company or of the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Notes and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Note Registrar,
Authenticating Agent or such other agent.
SECTION 606. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees:
(i) to pay to the Trustee from time to time such compensation
as shall be agreed to in writing between the Company and the Trustee for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents, consultants and counsel
and costs and expenses of collection), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify each of the Trustee or any predecessor Trustee
(and their respective directors, officers, stockholders, employees and
agents) for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based on the
income of the Trustee) incurred without negligence, willful misconduct or
bad faith on their part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of the Trustee's powers
or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless
74
the Trustee shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. As security for the
performance of such obligations of the Company, the Trustee shall have a lien
prior to the Holders of the Notes upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the payment of principal
of (and premium, if any) or interest on particular Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(vii) or (viii), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1), and which shall have an
office in The City of New York and shall have a combined capital and surplus of
at least $50,000,000. If the Trustee does not have an office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to the Company to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 608,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 608, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee by written instrument executed by
authority of the Board of Directors, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance required by this Section shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company. The Trustee so removed may, at the expense
of the Company, petition any court of competent jurisdiction for the appointment
of a successor Trustee if no successor Trustee is appointed within 30 days of
such removal.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
75
(ii) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Note for at least six
months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a Custodian of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company, by a Board Resolution, may remove the
Trustee, or (B) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Note for at least six months may, at the expense of the Company
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 610. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Notwithstanding the replacement of the Trustee
pursuant to this Section 610, the Company's obligations under Section 607 shall
continue for the benefit of the retiring Trustee with regard to expenses and
liabilities incurred by it and compensation earned by it prior to such
replacement or otherwise under the Indenture. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
76
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 612. Trustee's Application for Instructions from the Company.
-------------------------------------------------------
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. Subject to Section 610, the Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted.
ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY 700.
SECTION 701. Company to Furnish Trustee Names and Addresses.
----------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a list
of similar form and content to that in Subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished.
SECTION 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the
77
Holders in accordance with TIA Section 312, regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Notes, the Trustee shall transmit to the Holders,
in the manner and to the extent provided in TIA Section 313(c), a brief report
dated as of such May 15 if required by TIA Section 313(a).Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on
Officer's Certificates).
The Trustee also shall comply with TIA (S) 313(b). A copy of each
report at the time of its mailing to Holders shall be filed by the Trustee with
the Commission and each stock exchange (if any) on which the Notes are listed.
The Company agrees to notify promptly the Trustee whenever the Notes become
listed on any stock exchange and of any delisting thereof.
ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS 800.
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company will not in a single transaction or series of transactions
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and the
Successor Company (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Notes and hereunder;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing;
(iii) immediately before and after giving effect to such
transaction, the Company or the Successor Company if the Company is not the
continuing obligor under this Indenture would at the time of such
transaction or series of transactions, after giving pro forma effect to
such transaction as if such transaction had occurred on the first day of
the four quarter period ending on or immediately prior to the date of such
transaction, be able to Incur at least $1.00 of Indebtedness pursuant to
clause (a) of Section 1010; and
(iv) the Company shall have delivered to the Trustee (A) an
Officers' Certificate, stating that (1) such Officers are not aware of any
Default or Event of Default that shall have happened and be continuing and
(2) such consolidation, merger or transfer and such supplemental indenture
comply with this Indenture; provided that no Officers' Certificate will be
required as to matters described in clause (A)(1) of this clause (iv) for a
consolidation, merger or transfer described in the last paragraph of this
Section 801, and (B) an Opinion of Counsel, stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture, both in the form
78
required by this Indenture; provided that (1) in giving such opinion such
counsel may rely on such officer's certificate as to any matters of fact
(including without limitation as to compliance with the foregoing clauses
(ii) and (iii)), and (2) no Opinion of Counsel will be required for a
consolidation, merger or transfer described in the last paragraph of this
Section 801.
Notwithstanding the foregoing clauses (ii) and (iii), (x) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company and (y) the Company may merge with
an Affiliate incorporated solely for the purpose of reincorporating the Company
in another jurisdiction to realize tax or other benefits.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with or merger of the Company
with or into any other corporation or any conveyance, transfer, lease or other
disposition of all or substantially all of the assets of the Company to any
Person in accordance with Section 801, the Successor Company will succeed to,
and be substituted for, and may exercise every right and power of, the Company
hereunder and thereafter the predecessor Company shall be released from all
obligations and covenants hereunder, but, in the case of conveyance, transfer or
lease of all or substantially all its assets, the predecessor Company will not
be released from the obligation to pay the principal of and interest on the
Notes.
ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE 900.
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, the Guarantors, if
any (with respect to a Guarantee of the Notes to which it is a party), and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(i) to cure any ambiguity, defect or inconsistency; or
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code); or
(iii) to add Guarantees with respect to the Notes; or
(iv) to provide for the assumption by a successor corporation,
partnership, trust or limited liability company of the obligations of the
Company hereunder; or
(v) to secure the Notes; or
(vi) to confirm and evidence the release and discharge of any
Guarantee of the Notes or Lien with respect to or securing the Notes when
such release and discharge is permitted by and provided for hereunder; or
(vii) to provide that any Indebtedness that becomes or will
become an obligation of the Successor Company pursuant to a transaction
governed by Section 801 (and that is not a Subordinated Obligation) is
Senior Subordinated Indebtedness for purposes of this Indenture; or
79
(viii) to add to the covenants of the Company for the benefit
of the Holders or to surrender any right or power conferred upon the
Company; or
(ix) to make any other change that does not adversely affect
the rights of any Holder; or
(x) to comply with any requirement of the Commission in
connection with the qualification of this Indenture under the Trust
Indenture Act.
However, no amendment may be made to the subordination provisions of
the Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of at least a majority in principal
amount of the Outstanding Notes (including consents obtained in connection with
a tender offer or exchange offer for the Notes), the Company, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby (with respect to any Notes held by a nonconsenting Holder of
the Notes):
(i) reduce the amount of Notes whose Holders must consent to
an amendment; or
(ii) reduce the stated rate of or extend the stated time for
payment of interest on any Note or amend the rate of accretion on the
Senior Subordinated Discount Notes or amend the definition of Accreted
Value; or
(iii) reduce the principal of or Accreted Value of or extend
the Stated Maturity of any Note; or
(iv) reduce the premium payable upon the redemption or
repurchase of any Note or change the time at which any Note may be redeemed
as described in Section 1101; or
(v) make any Note payable in money other than that stated in
the Note; or
(vi) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such Holder's Notes; or
(vii) make any change in the amendment provisions which
require each Holder's consent or in the waiver provisions; or
(viii) make any change to the subordination provisions of this
Indenture that adversely affects the rights of any Holder.
80
The consent of the Holders is not necessary under this Indenture to
approve the particular form of any proposed supplemental indenture. It is
sufficient if such consent approves the substance of the proposed supplemental
indenture.
The Senior Subordinated Notes and the Senior Subordinated Discount
Notes will vote together as a single class of securities under the Indenture
with respect to matters on which Holders are required or permitted to vote.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities, as determined by the Trustee in its sole discretion under this
Indenture or otherwise. In signing or refusing to sign any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby (except as provided in Section 902).
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Notes so modified as to conform to any such supplemental
indenture may be prepared and executed by the Company, and the Company shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms, the cost and expense of which will be borne by the Company in exchange
for Outstanding Notes.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Note affected, in
the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture. The failure to give such notice to
all the Holders, or any defect therein, will not impair or affect the validity
of the supplemental indenture.
81
SECTION 908. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights of any
holders of Senior Indebtedness under Article Thirteen unless the requisite
holders of each issue of Senior Indebtedness affected thereby shall have
consented to such supplemental indenture.
ARTICLE TEN. COVENANTS 1000.
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
---------------------------------------------------
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in The City of New York, an office or agency
where the Notes may be presented or surrendered for payment, where, if
applicable, the Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Corporate Trust Office of the
Trustee shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
-------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal of (or premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure to so act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of (or premium, if
any) or interest on any Notes, deposit with a Paying Agent a sum in same day
funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) that shall be available to
the Trustee by 11:00 a.m. Eastern Standard Time on such due date sufficient to
pay the principal (and premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium or interest,
82
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of such action or any failure to so act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(i) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Company (or
any other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest; and
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium, if
any) or interest on any Note and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment to the Company, may at the expense of the Company
cause to be published once, in a leading daily newspaper (if practicable, The
Wall Street Journal (Eastern Edition)) printed in the English language and of
general circulation in New York City, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and that of each Restricted Subsidiary and the corporate rights
(charter and statutory) licenses and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve any such existence (except the Company) right, license or franchise
if the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not, and will not be, disadvantageous in any material respect to the Holders.
83
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (ii)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material liability or lien upon the property of the Company or any
Restricted Subsidiary; 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 and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Company) are being
maintained in accordance with GAAP.
SECTION 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in normal
condition, repair and working order and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly conducted at all times; provided, however,
that nothing in this Section shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any Restricted Subsidiary and not adverse in
any material respect to the Holders.
SECTION 1007. Insurance.
---------
To the extent available at commercially reasonable rates, the Company
will maintain, and will cause its Restricted Subsidiaries to maintain, insurance
with responsible carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance provisions, as
are customarily carried by similar businesses, of similar size in their country
of organization, including professional and general liability, property and
casualty loss, workers' compensation and interruption of business insurance. In
the event the Company determines that insurance satisfying the first sentence of
this Section 1007 is not available at commercially available rates, it shall
provide an Officer's Certificate to such effect to the Trustee and the Trustee
may conclusively rely on the determinations set forth therein.
SECTION 1008. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Restricted
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 regulatory authority, in respect of the conduct
of their respective businesses and the ownership of their respective properties,
except for such noncompliances as would not in the aggregate have a material
adverse effect on the financial condition or results of operations of the
Company and its Restricted Subsidiaries, taken as a whole.
SECTION 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock (including any payment to
its stockholders in connection with any merger or consolidation involving the
Company) except (A) dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and (B) dividends or distributions payable
to the Company or any Restricted Subsidiary (and, if such Restricted Subsidiary
is not a Wholly Owned Subsidiary, to its other shareholders on no more than a
pro rata basis, measured by value), (ii) purchase, redeem, retire or otherwise
acquire for value any Capital Stock of
84
the Company or any Restricted Subsidiary held by Persons other than the Company
or another Restricted Subsidiary), (iii) purchase, repurchase, redeem, defease
or otherwise acquire or retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Obligations (other
than the purchase, repurchase, redemption or other acquisition of Subordinated
Obligations in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition) or (iv) make any Investment (other than a Permitted Investment) in
any Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
as a "Restricted Payment") if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment: (A) a Default shall have occurred and
be continuing (or would result therefrom); (B) the Company could not incur at
least an additional $1.00 of Indebtedness under the first paragraph (a) of the
covenant contained in Section 1010; or (C) the aggregate amount of such
Restricted Payment and all other Restricted Payments (the amount so expended, if
other than in cash, to be determined in good faith by the Company's Board of
Directors, whose determination shall be conclusive and evidenced by a resolution
of the Company's Board of Directors) declared or made subsequent to the date of
this Indenture would exceed the sum of: (1) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting period) from the end of the
most recent fiscal quarter ending prior to the Issue Date to the end of the most
recent fiscal quarter ending prior to the date of such Restricted Payment for
which consolidated financial statements of the Company are available (or, in
case such Consolidated Net Income shall be a deficit, minus 100% of such
deficit); (2) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of its Capital Stock (other than Disqualified Stock) plus the
principal amount of convertible securities which have been converted into or
exchanged for Capital Stock (other than Disqualified Stock), in each case,
subsequent to the Issue Date (other than an issuance or sale to a Restricted
Subsidiary of the Company); provided that in the event such issuance or sale is
to an employee stock ownership plan or other trust established by the Company or
any of its Subsidiaries for the benefit of their employees, to the extent the
purchase by such plan or trust is financed by Indebtedness of such plan or trust
and for which the Company is liable as Guarantor or otherwise, such aggregate
amount of Net Cash Proceeds shall be limited to the aggregate amount of
principal payments made by such plan or trust with respect to such
Indebtedness); and (3) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment (without duplication of any amount
deducted in calculating the amount of Investments at any time outstanding
included in the amount of Restricted Payments), an amount equal to the lesser of
(x) the return of capital or similar repayment with respect to such Investment
and (y) the initial amount of such Investment, in either case, less the cost of
the disposition of such Investment.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(i) any purchase, redemption, repurchase, defeasance, retirement or other
acquisition of Capital Stock of the Company or Subordinated Obligations made by
exchange (including any such exchange pursuant to the exercise of a conversion
right or privilege in connection with which cash is paid in lieu of the issuance
of fractional shares) for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or other trust established by the Company or any of its
Subsidiaries); provided, however, that (A) such purchase, redemption,
repurchase, defeasance, retirement or other acquisition shall be excluded in
subsequent calculations of the amount of Restricted Payments and (B) the Net
Cash Proceeds or reduction of Indebtedness from such sale shall be excluded in
calculations under clauses (B) and (C) of the previous paragraph; (ii) any
purchase, redemption, repurchase, defeasance, retirement or other acquisition of
Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations of the Company that
is permitted to be Incurred pursuant to the covenant contained in Section 1010;
provided, however, that such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent calculations of
the amount of Restricted Payments; (iii) any purchase, redemption, repurchase,
defeasance, retirement or other acquisition of Subordinated Obligations from Net
Available Cash to the extent permitted by the covenant contained in Section
1017; provided, however, that such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent calculations of
the amount of Restricted Payments; (iv)
85
dividends paid within 60 days after the date of declaration thereof if at such
date of declaration such dividend would have complied with paragraph (a);
provided, however, that such dividend shall be included in subsequent
calculations of the amount of Restricted Payments; (v) any purchase or
redemption of any shares of Capital Stock of the Company from employees of the
Company and its Subsidiaries pursuant to the repurchase provisions under
employee stock option or stock purchase agreements or other agreements to
compensate management employees in an aggregate amount after the date of this
Indenture not in excess of $1.0 million in any fiscal year (excluding
repurchases and redemptions in connection with the Mergers), plus any unused
amounts under this clause (v) from prior fiscal years; provided, however, that
such purchases or redemptions shall be excluded in subsequent calculations of
the amount of Restricted Payments; (vi) Investments in Permitted Business
Ventures that in the aggregate do not exceed at any one time outstanding 10% of
Consolidated Tangible Assets less any amounts invested under clause (iv) of the
definition of "Additional Assets" (exclusive of those Permitted Business
Ventures in existence on the Issue Date); provided, however, that any such
Investments in Permitted Business Ventures shall be included in subsequent
calculations of the amount of Restricted Payments; (vii) any purchase,
redemption or repurchase of any shares of Capital Stock of the Company in
connection with the Mergers and as described in or contemplated by the Offering
Memorandum; provided, however, that any such purchases or redemptions shall be
excluded in subsequent calculations of the amount of Restricted Payments; or
(viii) other Restricted payments not to exceed $10.0 million in the aggregate.
(c) Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 1009 were computed, which calculations may
be based upon the Company's latest available financial statements. The Trustee
shall have no duty to recompute or recalculate or verify the accuracy of the
information set forth in such Officers' Certificate.
(d) The Company will not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except pursuant to the second to last sentence of the
definition of "Unrestricted Subsidiary."
SECTION 1010. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Indebtedness; provided, however, that the Company or
any Restricted Subsidiary may Incur Indebtedness if on the date of the
Incurrence of such Indebtedness the Consolidated Coverage Ratio would be greater
than (i) 1.75 to 1.00, if such Indebtedness is Incurred on or prior to the
second anniversary of the Issue Date and (ii) 2.00 to 1.00 if such Indebtedness
is Incurred thereafter.
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may Incur the following Indebtedness: (i) Indebtedness Incurred
pursuant to the Senior Credit Facility (or any refinancing thereof) in a maximum
principal amount not to exceed at any time (A) an aggregate principal amount of
$740.0 million under the Term Loan Facility, plus (in the case of any
refinancing thereof) the aggregate amount of fees, underwriting discounts,
premiums and other costs and expenses incurred in connection with such
refinancing, less (1) the aggregate amount of all scheduled repayments of
principal applied to permanently reduce the Indebtedness outstanding under the
Term Loan Facility and (2) the excess of (a) the aggregate amount of all
mandatory prepayments of principal with Net Available Cash from
Asset Dispositions applied to permanently reduce the Indebtedness outstanding
under the Term Loan Facility over (b) $75.0 million and (B) an aggregate
principal amount outstanding at any time under the Revolving Credit Facility (or
any refinancing thereof) not to exceed $175.0 million; (ii) Indebtedness (A) of
the Company to any Restricted Subsidiary and (B) of any Wholly Owned Subsidiary
to the Company or any Restricted Subsidiary; provided, however, that any
subsequent issuance or transfer of any Capital Stock or any other event that
results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any other subsequent transfer of any such Indebtedness (except to
the Company or a Wholly Owned Subsidiary) will be deemed, in each case, an
Incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, in the amount that remains outstanding following such issuance or
transfer
86
of such securities; (iii) Indebtedness represented by the Notes, any
Indebtedness (other than the Indebtedness described in clauses (i) or (ii)
above) outstanding on the date of this Indenture and any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause
(iii) or the previous paragraph; (iv) Indebtedness of the Company or any
Restricted Subsidiary in the form of Capitalized Lease Obligations, Purchase
Money Obligations or Attributable Debt, and any Refinancing Indebtedness with
respect thereto, in an aggregate amount not in excess of 7.5% of Consolidated
Tangible Assets at any one time outstanding; (v) Indebtedness represented by
Guarantees of Indebtedness Incurred pursuant to the covenant contained in this
section; (vi) Indebtedness under Hedging Obligations; provided, however, that
such Hedging Obligations are entered into for bona fide hedging purposes of the
Company or any Restricted Subsidiary and are in the ordinary course of business;
(vii) Indebtedness evidenced by letters of credit issued in the ordinary course
of business of the Company to secure workers' compensation and other insurance
coverages; and (viii) Indebtedness (which may comprise Bank Indebtedness) in an
aggregate principal amount at any one time outstanding not in excess of the
greater of (A) $75.0 million and (B) an amount equal to 5.0% of Consolidated
Tangible Assets.
(c) Notwithstanding the foregoing, the Company shall not Incur any
Indebtedness pursuant to the foregoing paragraph that permits Refinancing
Indebtedness in respect of Indebtedness constituting Subordinated Obligations if
the proceeds of such Refinancing Indebtedness are used, directly or indirectly,
to Refinance such Subordinated Obligations, unless such Refinancing Indebtedness
will be subordinated to the Notes at least to the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this covenant, (i) in the event that Indebtedness meets the
criteria of more than one of the types of Indebtedness described in paragraph
(b) of this Section, the Company, in its sole discretion, shall classify such
item of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses; and (ii) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with GAAP.
(e) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt and Guarantees of Indebtedness
Incurred in accordance with paragraphs (a) and (b) of the covenant contained in
this section; provided, however, if any such Indebtedness ceases to be Non-
Recourse Debt, such event shall be deemed to constitute an incurrence of
Indebtedness by the Company or a Restricted Subsidiary.
SECTION 1011. Limitation on Layering.
----------------------
The Company shall not incur any Indebtedness that is expressly
subordinate in right of payment to any Senior Indebtedness unless such
Indebtedness is Senior Subordinated Indebtedness or is contractually
subordinated in right of payment to Senior Subordinated Indebtedness. Unsecured
Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness
merely because it is unsecured, and Indebtedness that is not guaranteed by a
particular person is not deemed to be subordinate or junior to Indebtedness that
is so guaranteed merely because it is not so guaranteed.
SECTION 1012. Limitation on Affiliate Transactions.
------------------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into or conduct any transaction or
series of transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service with any Affiliate of the Company (an
"Affiliate Transaction") on terms (i) that taken as a whole are less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not such an Affiliate and (ii) that, in the event such
Affiliate Transaction involves an aggregate amount in excess of $10.0 million,
are not in writing and have not been approved by
87
a majority of the members of the Board of Directors having no material personal
financial interest in such Affiliate Transaction or, in the event there are no
such members, as to which the Company has not obtained a Fairness Opinion (as
hereinafter defined). In addition, any transaction involving aggregate payments
or other transfers by the Company and its Restricted Subsidiaries in excess of
$20.0 million will also require an opinion (a "Fairness Opinion") from an
independent investment banking firm or appraiser, as appropriate, of national
prominence, to the effect that the terms of such transaction are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not an Affiliate.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted by Section 1009, any Permitted Investment,
or any other transaction specifically excluded from the definition of
"Restricted Payment", (ii) the performance of the Company's or Restricted
Subsidiary's obligations under any employment contract, collective bargaining
agreement, agreement for the provision of services, employee benefit plan,
related trust agreement or any other similar arrangement heretofore or hereafter
entered into in the ordinary course of business, (iii) payment of compensation,
performance of indemnification or contribution obligations, or any issuance,
grant or award of stock, options or other securities, to employees, officers or
directors in the ordinary course of business, (iv) any transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries, (v) the
Transactions and the incurrence and payment of all fees and expenses payable in
connection therewith as described in or contemplated by the Offering Memorandum,
(vi) any other transaction arising out of agreements in existence on the Issue
Date, including, without limitation, the Stockholders Agreement and the
Registration Rights Agreement (each as described in the Offering Memorandum
under "Certain Related Transactions and Agreements"), and (vii) transactions
with suppliers or other purchasers or sellers of goods or services, in each case
in the ordinary course of business and on terms no less favorable to the Company
or the Restricted Subsidiary, as the case may be, than those that could be
obtained at such time in arm's-length dealings with a Person which is not an
Affiliate.
SECTION 1013. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company will not, and will not permit any Restricted Subsidiary
to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except (A) any encumbrance or restriction pursuant to
an agreement in effect at or entered into on the date of the Indenture
(including, without limitation, the Senior Credit Facility); (B) any encumbrance
or restriction with respect to a Restricted Subsidiary (1) pursuant to an
agreement relating to any Indebtedness Incurred by a Restricted Subsidiary prior
to the date on which such Restricted Subsidiary was acquired by the Company, or
of another Person that is assumed by the Company or a Restricted Subsidiary in
connection with the acquisition of assets from, or merger or consolidation with,
such Person (other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company, or
such acquisition of assets, merger or consolidation) and outstanding on the date
of such acquisition, merger or consolidation or (2) pursuant to any agreement
(not relating to any Indebtedness) in existence when a Person becomes a
Subsidiary of the Company or when such agreement is acquired by the Company or
any Subsidiary thereof, that is not created in contemplation of such Person
becoming such a Subsidiary or such acquisition (for purposes of this clause (B),
if another Person is the Successor Company, any Subsidiary or agreement thereof
shall be deemed acquired or assumed, as the case may be, by the Company when
such Person becomes the Successor Company); (C) any encumbrance or restriction
with respect to a Restricted Subsidiary pursuant to an agreement (a "Refinancing
Agreement") effecting a refinancing of Indebtedness Incurred pursuant to, or
that otherwise extends, renews, refinances or replaces, an agreement referred to
in clause (A) or (B) of this covenant or this clause (C) or contained in any
amendment to an agreement referred to in clause (A) or (B) of this covenant or
this clause (C) (an "Initial
88
Agreement") or contained in any amendment to an Initial Agreement; provided,
however, that the encumbrances and restrictions contained in any such
Refinancing Agreement or amendment are no less favorable to the Holders of the
Notes taken as a whole than encumbrances and restrictions contained in the
Initial Agreement or Agreements to which such Refinancing Agreement or amendment
relates; (D) any encumbrance or restriction (1) that restricts in a customary
manner the subletting, assignment or transfer of any property or asset that is
subject to a lease, license or similar contract, or the assignment or transfer
of any lease, license or other contract, (2) by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any property
or assets of the Company or any Restricted Subsidiary not otherwise prohibited
by the Indenture, (3) contained in mortgages, pledges or other security
agreements securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restrictions restrict the transfer of the property subject to
such mortgages, pledges or other security agreements or (4) pursuant to
customary provisions restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the Company or any Restricted
Subsidiary; (E) any restriction with respect to a Restricted Subsidiary (or any
of its property or assets) imposed pursuant to an agreement entered into for the
direct or indirect sale or disposition of all or substantially all the Capital
Stock or assets of such Restricted Subsidiary (or the property or assets that
are subject to such restriction) pending the closing of such sale or
disposition; and (F) any encumbrance or restriction on the transfer of property
or assets required by any regulatory authority having jurisdiction over the
Company or any Restricted Subsidiary or any of their businesses.
SECTION 1014. Limitation on Sale or Issuance of Preferred Stock of
----------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not sell any shares of Preferred Stock of a
Restricted Subsidiary, and shall not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell any shares of its Preferred Stock to any Person
(other than to the Company or a Restricted Subsidiary).
SECTION 1015. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or permit to exist any Lien (other than
Permitted Liens) on any of its property or assets (including Capital Stock),
whether owned on the date of this Indenture or thereafter acquired, securing any
Indebtedness that is not Senior Indebtedness (the "Initial Lien"), unless
contemporaneously therewith effective provision is made to secure the
obligations due under this Indenture and the Notes or, in respect of Liens on
any Restricted Subsidiary's property or assets, equally and ratably with such
obligation for so long as such obligation is secured by such Initial Lien. Any
such Lien thereby created in favor of the Notes will be automatically and
unconditionally released and discharged upon (i) the release and discharge of
the Initial Lien to which it relates, or (ii) any sale, exchange or transfer to
any Person not an Affiliate of the Company of the property or assets secured by
such Initial Lien, or of all of the Capital Stock held by the Company or any
Restricted Subsidiary in, or all or substantially all the assets of, any
Restricted Subsidiary creating such Lien.
SECTION 1016. Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder will have
the right to require the Company to repurchase all or any part of such Holder's
Notes at a purchase price in cash equal to 101% of the principal amount (or
Accreted Value, as the case may be) thereof, plus accrued and unpaid interest,
if any, to the date of repurchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date) (the "Change of Control Offer"); provided, however, that
notwithstanding the occurrence of a Change of Control, the Company shall not be
obligated to purchase the Notes pursuant to this covenant in the event that it
has exercised its right to redeem all of the Notes pursuant to Section 1101.
89
(b) Within 30 days following any Change of Control, unless the Company
has mailed a redemption notice in connection with such Change of Control as
described in Section 1105, the Company shall mail a notice to each holder with a
copy to the Trustee stating:
(i) that a Change of Control has occurred or will occur and
that such Holder has (or upon such occurrence will have) the right to
require the Company to purchase such Holder's Notes at a purchase price in
cash equal to (i) 101% of the principal amount thereof, in the case of
Senior Subordinated Notes, plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of Holders of record on a record
date to receive interest on the relevant interest payment date) and (ii)
prior to November 1, 2002, 101% of the Accreted Value on the purchase date,
in the case of the Senior Subordinated Discount Notes, and thereafter, 101%
of the principal amount, plus accrued and unpaid interest, if any, thereon,
to the purchase date;
(ii) the circumstances and relevant facts and financial
information regarding such Change of Control;
(iii) the date of purchase (which shall be no earlier than 30
days nor later than 90 days from the date such notice is mailed);
(iv) the instructions determined by the Company, consistent
with this covenant, that a Holder must follow in order to have its Notes
purchased; and
(v) that, if such offer is made prior to such Change of
Control, payment is conditioned on the occurrence of such Change of
Control.
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue thereof.
SECTION 1017. Limitation on Sales of Assets.
-----------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Disposition unless (i) at least 75% of the
consideration therefor (excluding, in the case of an Asset Disposition of
assets, any consideration by way of relief from, or by any other person assuming
responsibility for, any liabilities, contingent or otherwise, which are not
Indebtedness) received by the Company or such Restricted Subsidiary is in the
form of cash and (ii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be) (A) first, to the extent the Company elects (or is required
by the terms of any Senior Indebtedness or Indebtedness (other than Preferred
Stock) of a Restricted Subsidiary), to prepay, repay or purchase Senior
Indebtedness or such Indebtedness of a Restricted Subsidiary (in each case other
than Indebtedness owed to the Company or a Restricted Subsidiary of the Company)
within 365 days after the date of such Asset Disposition; (B) second, to the
------
extent of the balance of Net Available Cash after application in accordance with
clause (A), to the extent the Company or such Restricted Subsidiary elects, to
reinvest in Additional Assets (including by means of an Investment in Additional
Assets by a Restricted Subsidiary with Net Available Cash received by the
Company or another Restricted Subsidiary) within 365 days from the date of such
Asset Disposition or, if such reinvestment in Additional Assets is a project
authorized by the Board of Directors that will take longer than 365 days to
complete, the period of time necessary to complete such project; (C) third, to
-----
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B) (such balance, the "Excess Proceeds"), to
make an offer to purchase Notes at a price in cash equal to (i) in the case of
the Senior Subordinated Notes, 100% of the principal amount thereof, plus
90
accrued and unpaid interest, if any, to the purchase date and (ii) in the case
of the Senior Subordinated Discount Notes, prior to November 1, 2002, 100% of
the Accreted Value thereof on the purchase date and thereafter, 100% of the
Accreted Value thereof, plus accrued and unpaid interest, if any, thereon to the
purchase date, and (to the extent required by the terms thereof) any other
Senior Subordinated Indebtedness pursuant and subject to the conditions of the
agreements governing such other Indebtedness at a purchase price of 100% of the
principal amount thereof plus accrued and unpaid interest to the purchase date
and (D) fourth, to the extent of the balance of such Excess Proceeds after
application in accordance with clauses (A), (B) and (C) above, to fund (to the
extent consistent with any other applicable provision of this Indenture) any
general corporate purpose (including the repayment of Subordinated Obligations);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this covenant, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this covenant
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not applied in accordance with this covenant exceeds $10.0
million.
To the extent that the aggregate principal amount (or Accreted Value,
as the case may be) of the Notes and other Senior Subordinated Indebtedness
tendered pursuant to an offer to purchase made in accordance with clause (C)
above exceeds the amount of Excess Proceeds, the Trustee shall select the Notes
and Senior Subordinated Indebtedness to be purchased on a pro rata basis, based
on the aggregate principal amount (or Accreted Value, as applicable) thereof
surrendered in such offer to purchase. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset to zero.
For the purposes of this covenant, the following are deemed to be
cash: (v) Cash Equivalents, (w) the assumption of Indebtedness of the Company
(other than Disqualified Stock of the Company) or any Restricted Subsidiary and
the release of the Company or such Restricted Subsidiary from all liability on
such Indebtedness in connection with such Asset Disposition, (x) Indebtedness of
any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result
of such Asset Disposition, to the extent that the Company and each other
Restricted Subsidiary is released from any Guarantee (or is the beneficiary of
any indemnity with respect thereto which is secured by any letter of credit or
cash equivalents) of such Indebtedness in connection with such Asset
Disposition, (y) securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash, and (z) consideration consisting of
Indebtedness of the Company or any Restricted Subsidiary.
(b) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this covenant by virtue thereof.
(c) In the event of an Asset Disposition that requires the purchase of
Notes pursuant to clause (a)(iii)(C), the Company will be required to purchase
Notes tendered pursuant to an offer by the Company for the Notes at a purchase
price of 100% of their principal amount plus accrued and unpaid interest, if
any, to the purchase date in accordance with the procedures (including prorating
in the event of oversubscription) set forth in this Indenture.
SECTION 1018. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing officers
91
with a view to determining whether it has kept, observed, performed and
fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe,
perform and fulfill its obligations under this Indenture and further stating, as
to each such officer signing such certificate, that, to the best of his or her
knowledge, the Company during such preceding fiscal year has kept, observed,
performed and fulfilled, and has caused each of its Restricted Subsidiaries to
keep, observe, perform and fulfill each and every such covenant contained in
this Indenture 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 which
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe its status, with particularity
and that, to the best of his or her knowledge, no event has occurred and remains
by reason of which payments on the account of the principal of or interest, if
any, on the Notes is prohibited or if such event has occurred, a description of
the event and what action each is taking or proposes to take with respect
thereto. The Officers' Certificate shall also notify the Trustee should the
Company elect to change the manner in which it fixes its fiscal year end. For
purposes of this Section 1018(a), such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Significant Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $20 million), the
Company shall deliver to the Trustee by registered or certified mail or
facsimile transmission an Officers' Certificate specifying such event, notice or
other action within five Business Days of its occurrence.
SECTION 1019. Reporting Requirements.
----------------------
As long as any of the Notes is outstanding, the Company will file with
the Commission the annual reports, quarterly reports and other documents
required to be filed with the Commission pursuant to Sections 13 and 15 of the
Exchange Act, whether or not the Company is then obligated to file reports
pursuant to such sections. The Company will be required to file with the Trustee
and provide to each holder of Notes within 15 days after filing with the
Commission (or if any such filing is not required under the Exchange Act, 15
days after the Company would have been required to make such filing) copies of
such reports and documents.
SECTION 1020. Limitations on Issuances of Guarantees of Indebtedness
------------------------------------------------------
by Restricted Subsidiaries.
--------------------------
The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee the payment of any Senior Subordinated Indebtedness (or
other Indebtedness ranking junior thereto) of the Company or any of its
Restricted Subsidiaries unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture providing for
the Guarantee of the payment of the Notes by such Restricted Subsidiary, which
Guarantee shall be senior to or pari passu with such Restricted Subsidiary's
Guarantee of such Indebtedness. Notwithstanding the foregoing, any such
Guarantee by a Restricted Subsidiary of the Notes shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
a sale or other disposition, by way of merger or otherwise, to any Person not an
Affiliate of the Company, of the Company's stock in, or the assets of, such
Restricted Subsidiary, which sale or other disposition results in such
Restricted Subsidiary ceasing to be a Restricted Subsidiary and such sale or
other disposition is made in compliance with, and the net proceeds therefrom are
applied in accordance with, the applicable provisions of this Indenture. The
foregoing provisions will not be applicable to (i) Guarantees by Restricted
Subsidiaries of the Company's Indebtedness under the Senior Credit Agreement and
with respect to Hedging Obligations related to the Senior Credit Agreement and
(ii) Guarantees of Indebtedness of a Person by its subsidiaries in effect prior
to the time such Person is merged with or into or become a Restricted
Subsidiary, provided that such Guarantees do not extend to any other
Indebtedness of such Person or any other Person.
92
SECTION 1021. Designation of Unrestricted Subsidiaries.
----------------------------------------
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and would otherwise be permitted under
Section 1009 (including pursuant to clause (vi) thereof relating to Permitted
Business Ventures). All such outstanding Investments will be deemed to
constitute Investments in an amount equal to the greater of the fair market
value or the book value of such Investments at the time of such designation.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be
subject to any of the restrictive covenants set forth in this Indenture.
1100. ARTICLE ELEVEN. REDEMPTION OF NOTES
SECTION 1101. Optional Redemption.
-------------------
The Notes may or shall, as the case may be, be redeemed, as a whole or
from time to time in part, subject to the conditions and at the Redemption
Prices specified in the form of Note, together with accrued interest to the
redemption date. The aggregate principal amount of the Senior Subordinated
Notes and the Senior Subordinated Discount Notes to be redeemed shall be
allocated by the Company between the Senior Subordinated Notes and the Senior
Subordinated Discount Notes in the Company's sole discretion.
SECTION 1102. Applicability of Article.
------------------------
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 90 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
--------------------------------------------
If less than all the Notes are to be redeemed at any time pursuant to
an optional redemption, the particular Notes to be redeemed shall be selected
not more than 90 days prior to the Redemption Date by the Trustee, from the
Outstanding Notes not previously called for redemption, in compliance with the
requirements of the principal securities exchange, if any, on which such Notes
are listed, or, if such Notes are not so listed, on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and appropriate (and in such
manner as complies with applicable legal requirements) and which may provide for
the selection for redemption of portions of the principal of the Notes;
provided, however, that no such partial redemption shall reduce the portion of
the principal amount of a Note not redeemed to less than $1,000.
93
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 90 days prior to the Redemption Date,
to each Holder of Notes to be redeemed. The Trustee shall give notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 1107, if any,
(iii) if less than all Outstanding 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,
(iv) in case any Note is to be redeemed in part only, the
notice which relates to such Note shall state that on and after the
Redemption Date, upon surrender of such Note, the holder will receive,
without charge, a new Note or Notes of authorized denominations for the
principal amount thereof remaining unredeemed,
(v) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and, unless the Company defaults in making
the redemption payment, that interest on Notes called for redemption (or
the portion thereof) will cease to accrue on and after said date,
(vi) the place or places where such Notes are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(vii) the name and address of the Paying Agent,
(viii) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price,
(ix) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any, listed in such
notice or printed on the Notes, and
(x) the paragraph of the Notes or Section of the Indenture
pursuant to which the Notes are to be redeemed.
94
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
--------------------------------
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Regular Record Date or Special Record Date, as the case
may be, according to their terms and the provisions of Section 311.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Notes.
SECTION 1108. Notes Redeemed in Part.
----------------------
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 1002 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and deliver to
the Holder of such Note at the expense of the Company, a new Note or Notes, of
any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered, provided, that each such new Note will be
in a principal amount of $1,000 or integral multiple thereof.
1200. ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Legal Defeasance or Covenant
-------------------------------------------------------
Defeasance.
----------
The Company and the Guarantors may, at their option, at any time, with
respect to the Notes, elect to have either Section 1202 or Section 1203 be
applied to all Outstanding Notes upon compliance with the conditions set forth
in this Article Twelve. The Company in its sole discretion can defease either
or both of the Senior Subordinated Notes and the Senior Subordinated Discount
Notes.
SECTION 1202. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company and any Guarantor shall be deemed
to have been discharged from its obligations with respect to all Outstanding
Notes on the date the conditions set forth in Section 1204 are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company and any such Guarantor shall be deemed to have paid and
discharged the entire Indebtedness
95
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1205 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 insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following 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 1204 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any, on) and interest on such Notes when such
payments are due, (ii) the Company's obligations with respect to such Notes
under Sections 304, 305, 310, 1002 and 1003, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, and the Company's obligations in
connection therewith and (iv) this Article Twelve.
If the Company exercises its Legal Defeasance Option, payment of the
Notes may not be accelerated because of an Event of Default.
Subject to compliance with this Article Twelve, the Company may
exercise its option under this Section 1202 notwithstanding the prior exercise
of its option under Section 1203 with respect to the Notes.
SECTION 1203. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203, the Company may terminate (i) its obligations
under any covenant contained in Sections 1004 through 1021, (ii) the operation
of Section 501(vi), Section 501(vii) (with respect only to Significant
Subsidiaries), Section 501(viii) (with respect only to Significant Subsidiaries)
and Section 501(ix) and (iii) the limitations contained in Sections 801(a)(iii)
and (iv) 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 to be "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 will not be outstanding for accounting purposes). If
the Company exercises its covenant defeasance option, payment of the Notes may
not be accelerated because of an Event of Default specified under Section
501(iv), (vi), (vii) (with respect only to Significant Subsidiaries), (viii)
(with respect only to Significant Subsidiaries) and (ix) or because of the
failure of the Company to comply with Sections 801(a)(iii) and (iv). 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 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 of Default under Section 501(iv),
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance.
-----------------------------------------------------
The following shall be the conditions to application of either Section
1202 or Section 1203 to the Outstanding Notes:
(i) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of this Indenture who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in trust
money or Government Obligations, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants selected by the Company, to pay the principal of, premium, if
any,
96
and interest due on the Outstanding Notes on the Stated Maturity or on the
applicable Redemption Date as the case may be, of such principal, premium,
if any, or interest on the Outstanding Notes;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee (which opinion may be subject to
customary assumptions and exclusions) confirming that (A) the Company has
received from, or there has been published by, the United States Internal
Revenue Service a ruling or (B) since the Issue Date, there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel in the United States
(which opinion may be subject to customary assumptions and exclusions)
shall confirm that the Holders of the Outstanding Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of
such Legal Defeasance and will be subject to U.S. 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;
(iii) in the case of Covenant Defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the Outstanding Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Covenant Defeasance and will be subject to such 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;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 123rd day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(vi) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that, as of the date of such opinion and subject
to customary assumptions and exclusions following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally under any applicable U.S. federal or state law, and that the
Trustee has a perfected security interest in such trust funds for the
ratable benefit of the Holders;
(vii) 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 defeating, hindering, delaying or defrauding any
creditors of the Company or any Guarantor or others;
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States (which
Opinion of Counsel may be subject to customary assumptions and exclusions)
each stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance, as the case may be, have been
complied with; and
(ix) the Company shall have delivered to the Trustee the
opinion of a nationally recognized firm of independent public accountants
stating the matters set forth in paragraph (i) above.
97
SECTION 1205. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law. Money and Government Obligations so held in
trust are not subject to Article Thirteen.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1204 or the principal and interest received in
respect thereof.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in Section
1204 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 which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
SECTION 1206. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 1205 by reason of any legal
proceeding or by any reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1202 or 1203, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1205; provided, however, that if the Company makes any payment of principal of
(or premium, if any) or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money and Government Obligations
held by the Trustee or Paying Agent.
1300. ARTICLE THIRTEEN. SUBORDINATION OF NOTES
SECTION 1301. Notes Subordinate to Senior Indebtedness.
----------------------------------------
The Company covenants and agrees, and each Holder of a Note, by his
acceptance thereof, likewise covenants and agrees, for the benefit of the
holders, from time to time, of Senior Indebtedness that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Notes and the payment of the principal of (and premium, if any) and
interest on each and all of the Notes and all other Subordinated Obligations are
hereby expressly made subordinate and subject in right of payment as provided in
this Article to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness, whether outstanding on the Issue Date or thereafter
incurred, created, assumed or, except as set forth in Section 1014, guaranteed.
The Senior Subordinated Notes and the Senior Subordinated Discount Notes will in
all respects rank pari passu with each other and with all other Senior
Subordinated Indebtedness of the Company.
98
SECTION 1302. Payment over of Proceeds upon Dissolution, Etc.
----------------------------------------------
Upon any payment or distribution of the assets of the Company upon a
total or partial liquidation or dissolution or reorganization or bankruptcy of
or similar proceeding relating to the Company or its property:
(i) the holders of Senior Indebtedness will be entitled to
receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness (including interest after, or which would accrue but for, the
commencement of any proceeding at the rate specified in the applicable
Senior Indebtedness, whether or not a claim for such interest would be
allowed in a proceeding) before the holders of the Notes are entitled to
receive any payment, and
(ii) until the Senior Indebtedness is paid in full in cash or
Cash Equivalents, any payment or distribution to which holders of the Notes
would be entitled but for the subordination provisions of this Indenture
will be made to holders of the Senior Indebtedness as their interests may
appear (except that holders of Notes may receive securities that are
subordinated at least to the same extent as the Notes to the Senior
Indebtedness and any securities issued in exchange for any Senior
Indebtedness).
SECTION 1303. Suspension of Payment When Senior Indebtedness in
-------------------------------------------------
Default.
-------
(a) The Company may not pay principal of, premium, if any, or interest
on, the Notes or make any deposit pursuant to the provisions described under
"Defeasance" and may not otherwise purchase or retire any Notes (collectively,
"pay the Notes") if:
(i) any Senior Indebtedness is not paid when due in cash or
Cash Equivalents; or
(ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, the default has been cured or waived and any
such acceleration has been rescinded or such Senior Indebtedness has been
paid in full in cash or Cash Equivalents;
provided, however, the Company may pay the Notes without regard to the foregoing
if the Company and the Trustee receive written notice approving such payment
from the Representative of the Senior Indebtedness with respect to which either
of the events set forth in clause (i) or (ii) above has occurred and is
continuing.
(b) During the continuance of any default (other than a default
described in clause (a) (i) or (a) (ii) above) with respect to any Designated
Senior Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Notes for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full (or
such payment has been duly provided for in a manner acceptable to the holders of
such Designated Senior Indebtedness). Notwithstanding the provisions described
in the immediately preceding sentence (but subject to Section 1303(a)), unless
the holders of such Designated Senior Indebtedness or the Representative of such
holders have accelerated the maturity of such Designated Senior Indebtedness,
the Company may resume payments on the Notes after the end of such Payment
Blockage Period. Not more than one Blockage Notice may be given in any
consecutive 360-
99
day period, irrespective of the number of defaults with respect to Designated
Senior Indebtedness during such period. However, if any Blockage Notice within
such 360-day period is given by or on behalf of any holders of Designated Senior
Indebtedness other than Bank Indebtedness, a Representative of Bank Indebtedness
may give one additional Blockage Notice within such period. In no event,
however, may the total number of days during which any Payment Blockage Period
or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period.
SECTION 1304. Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness or the Representative of such holders of the acceleration.
The Company may not pay the Notes until five Business Days after such holders or
the Representative of the Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if the subordination
provisions of this Indenture otherwise permit payment at that time.
SECTION 1305. When Distribution Must Be Paid Over.
-----------------------------------
If a distribution is made to Holders of the Notes that, due to the
provisions of this Article Thirteen, should not have been made to them, such
Holders are required to hold it in trust for the Holders of Senior Indebtedness
and pay it over to them as their interests may appear.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article Thirteen, 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
Thirteen, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee.
SECTION 1306. Notice by Company.
-----------------
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes that violate this Article, but failure to give such
notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article Thirteen.
SECTION 1307. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Notes shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1302 or under the conditions
described in Section 1303, from making payments at any time of principal of (and
premium, if any, on) or interest on the Notes.
SECTION 1308. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or
Cash Equivalents, the Holders shall be subrogated (equally and ratably with the
holders of all Pari Passu Indebtedness of the Company) to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
Subordinated Obligations shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Senior
100
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Notes or on their behalf or by
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness; it
being understood that the provisions of this Article are intended solely for the
purpose of determining the relative rights of the Holders of the Notes, on the
one hand, and the holders of Senior Indebtedness, on the other hand.
SECTION 1309. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
(a) impair, as between the Company and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders the
principal of (and premium, if any) and interest on the Notes as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders and creditors of the
Company other than their rights in relation to holders of Senior Indebtedness;
or (c) prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness. If
the Company fails because of this Article to pay principal (or premium, if any)
or interest on a Note on the due date, the failure is still a Default or Event
of Default.
SECTION 1310. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Note by his acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes. If the
Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 504 hereof at least 30 days
before the expiration of the time to file such claim, the agent bank under the
Senior Credit Facility (if the such facility is still outstanding) is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 1311. Subordination May Not Be Impaired by Company.
--------------------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
SECTION 1312. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article Thirteen, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
101
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other acts pertinent thereto or
to this Article Thirteen.
SECTION 1313. Notice to Trustee.
-----------------
(a) 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. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the Company,
agent bank under the Senior Credit Facility or a holder of Senior Indebtedness
or from any trustee, fiduciary or agent therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to TIA Sections 315(a) through
315(d), shall be entitled in all respects to assume that no such facts exist;
provided, however, that, if the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within three Business Days prior to such date.
(b) Subject to TIA Sections 315(a) through 315(d), the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor). In
the event that the Trustee determines in good faith that further 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, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 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 1314. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
-----------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to TIA Sections 315(a) through 315(d), and
the Holders of the Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Notes, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article;
provided that such court, trustee, receiver, custodian, assignee, agent or other
Person has been apprised of, or the order, decree or certificate makes reference
to, the provisions of this Article.
102
SECTION 1315. Rights of Trustee as a Holder of Senior Indebtedness;
-----------------------------------------------------
Preservation of Trustee's Rights.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
SECTION 1316. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1315 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1317. No Suspension of Remedies.
-------------------------
Nothing contained in this Article 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 Article Five or to pursue any rights or remedies hereunder or
under applicable law, except as provided in Article Five.
SECTION 1318. Modification of Terms of Senior Indebtedness.
--------------------------------------------
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including, without limitation, the waiver of default thereunder, may be made or
done all without notice to or assent from the Holders or the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness is outstanding or of such Senior Indebtedness, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this Article
Thirteen or of the Notes relating to the subordination thereof.
SECTION 1319. [Intentionally Omitted].
-----------------------
SECTION 1320. Trust Moneys Not Subordinated.
-----------------------------
Notwithstanding anything contained herein to the contrary, payments
from cash or the proceeds of Government Obligations held in trust under Article
Twelve hereof by the Trustee (or other qualifying trustee) and which were
deposited in accordance with the terms of Article Twelve hereof and not in
violation of Section 1303 hereof for the payment of principal of (and premium,
if any) and interest on the Notes shall not be subordinated to the prior payment
of any Senior Indebtedness or subject to the restrictions set forth in this
Article Thirteen, and none of the Holders shall be obligated to pay over any
such amount to the Company or any holder of Senior Indebtedness or any other
creditor of the Company.
103
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
PARAGON HEALTH NETWORK, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
By /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
