Exhibit T3C
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HARBORSIDE HEALTHCARE CORPORATION,
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee,
______________________
INDENTURE
Dated as of [DATE]
______________________
12% Senior Subordinated Discount Notes due 2007
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE................................................. 1
SECTION 1.01. Definitions....................................................................... 1
SECTION 1.02. Other Definitions................................................................. 22
SECTION 1.03. Incorporation by Reference of Trust Indenture Act................................. 23
SECTION 1.04. Rules of Construction............................................................. 23
ARTICLE II THE SECURITIES............................................................................ 24
SECTION 2.01. Form and Dating................................................................... 24
SECTION 2.02. Global Securities Legend.......................................................... 25
SECTION 2.03. Execution, Authentication and Denominations....................................... 25
SECTION 2.04. Registrar and Paying Agent........................................................ 26
SECTION 2.05. Paying Agent to Hold Money in Trust............................................... 27
SECTION 2.06. Transfer and Exchange............................................................. 27
SECTION 2.07. Book-Entry Provisions for Global Securities....................................... 28
SECTION 2.08. Intentionally Omitted............................................................. 29
SECTION 2.09. Replacement Securities............................................................ 29
SECTION 2.10. Outstanding Securities............................................................ 29
SECTION 2.11. Temporary Securities.............................................................. 30
SECTION 2.12. Cancellation...................................................................... 30
SECTION 2.13. CUSIP Numbers..................................................................... 30
SECTION 2.14. Defaulted Interest................................................................ 30
SECTION 2.15. Issuance of Additional Securities................................................. 31
ARTICLE III REDEMPTION............................................................................... 31
SECTION 3.01. Notices to Trustee................................................................ 31
i
SECTION 3.02. Selection and Notice.............................................................. 31
SECTION 3.03. Notice............................................................................ 31
SECTION 3.04. Effect of Notice of Redemption.................................................... 32
SECTION 3.05. Deposit of Redemption Price....................................................... 32
SECTION 3.06. Securities Redeemed in Part....................................................... 33
SECTION 3.07. Optional Redemption............................................................... 33
SECTION 3.08. Intentionally Omitted............................................................. 33
SECTION 3.09. Repurchase Offers................................................................. 33
SECTION 3.10. No Sinking Fund................................................................... 36
ARTICLE IV COVENANTS................................................................................. 36
SECTION 4.01. Payment of Securities............................................................. 36
SECTION 4.02. Reports........................................................................... 37
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock................................ 37
SECTION 4.04. Restricted Payments............................................................... 39
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries......... 42
SECTION 4.06. Asset Sales....................................................................... 44
SECTION 4.07. Transactions with Affiliates...................................................... 45
SECTION 4.08. Change of Control................................................................. 47
SECTION 4.09. Compliance Certificate............................................................ 47
SECTION 4.10. Liens............................................................................. 47
SECTION 4.11. Additional Security Guarantees.................................................... 47
SECTION 4.12. Restriction on Senior Subordinated Debt........................................... 48
ARTICLE V SUCCESSOR COMPANY.......................................................................... 48
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets
of the Company.............................................................................. 48
ii
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All Assets of a Guarantor... 49
ARTICLE VI DEFAULTS AND REMEDIES..................................................................... 49
SECTION 6.01. Events of Default and Remedies.................................................... 49
SECTION 6.02. Acceleration...................................................................... 51
SECTION 6.03. Other Remedies.................................................................... 52
SECTION 6.04. Waiver of Past Defaults........................................................... 52
SECTION 6.05. Control by Majority............................................................... 52
SECTION 6.06. Limitation on Suits............................................................... 52
SECTION 6.07. Rights of Holders to Receive Payment.............................................. 53
SECTION 6.08. Collection Suit by Trustee........................................................ 53
SECTION 6.09. Trustee May File Proofs of Claim.................................................. 53
SECTION 6.10. Priorities........................................................................ 53
SECTION 6.11. Undertaking for Costs............................................................. 54
SECTION 6.12. Waiver of Stay or Extension Laws.................................................. 54
ARTICLE VII TRUSTEE.................................................................................. 54
SECTION 7.01. Duties of Trustee................................................................. 54
SECTION 7.02. Rights of Trustee................................................................. 56
SECTION 7.03. Individual Rights of Trustee...................................................... 57
SECTION 7.04. Trustee's Disclaimer.............................................................. 57
SECTION 7.05. Notice of Defaults................................................................ 57
SECTION 7.06. Reports by Trustee to Holders..................................................... 57
SECTION 7.07. Compensation and Indemnity........................................................ 58
SECTION 7.08. Replacement of Trustee............................................................ 59
SECTION 7.09. Successor Trustee by Merger....................................................... 59
SECTION 7.10. Eligibility; Disqualification..................................................... 60
iii
SECTION 7.11. Preferential Collection of Claims Against Company................................. 60
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE...................................................... 60
SECTION 8.01. Legal Defeasance and Covenant Defeasance.......................................... 60
SECTION 8.02. Conditions to Legal or Covenant Defeasance........................................ 61
SECTION 8.03. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions............................................................ 63
SECTION 8.04. Repayment to Company.............................................................. 63
SECTION 8.05. Reinstatement..................................................................... 64
SECTION 8.06. Satisfaction and Discharge of Indenture........................................... 64
ARTICLE IX AMENDMENTS................................................................................ 65
SECTION 9.01. Without Consent of Holders........................................................ 65
SECTION 9.02. With Consent of Holders........................................................... 66
SECTION 9.03. Compliance with Trust Indenture Act............................................... 67
SECTION 9.04. Revocation and Effect of Consents and Waivers..................................... 67
SECTION 9.05. Notation on or Exchange of Securities............................................. 67
SECTION 9.06. Trustee to Sign Amendments........................................................ 67
ARTICLE X SUBORDINATION.............................................................................. 68
SECTION 10.01. Agreement To Subordinate......................................................... 68
SECTION 10.02. Liquidation, Dissolution, Bankruptcy............................................. 68
SECTION 10.03. Default on Senior Debt........................................................... 69
SECTION 10.04. Acceleration of Payment of Securities............................................ 69
SECTION 10.05. When Distribution Must Be Paid Over.............................................. 69
SECTION 10.06. Subrogation...................................................................... 70
SECTION 10.07. Relative Rights.................................................................. 70
SECTION 10.08. Subordination May Not Be Impaired by Company..................................... 70
SECTION 10.09. Rights of Trustee and Paying Agent............................................... 70
iv
SECTION 10.10. Distribution or Notice to Representative......................................... 71
SECTION 10.11. Article X Not to Prevent Events of Default or Limit Right
to Accelerate............................................................................... 71
SECTION 10.12. Trust Moneys Not Subordinated.................................................... 71
SECTION 10.13. Trustee Entitled to Rely......................................................... 71
SECTION 10.14. Trustee to Effectuate Subordination.............................................. 71
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt................................. 72
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination Provisions................... 72
SECTION 10.17. Trustee's Compensation Not Prejudiced............................................ 72
ARTICLE XI SECURITY GUARANTEES....................................................................... 72
SECTION 11.01. Security Guarantees.............................................................. 72
SECTION 11.02. Limitation on Liability.......................................................... 74
SECTION 11.03. Successors and Assigns........................................................... 75
SECTION 11.04. No Waiver........................................................................ 75
SECTION 11.05. Modification..................................................................... 75
ARTICLE XII SUBORDINATION OF THE SECURITY GUARANTEES................................................. 75
SECTION 12.01. Agreement to Subordinate......................................................... 75
SECTION 12.02. Liquidation, Dissolution, Bankruptcy............................................. 75
SECTION 12.03. Default on Senior Debt of a Guarantor............................................ 76
SECTION 12.04. Demand for Payment............................................................... 76
SECTION 12.05. When Distribution Must Be Paid Over.............................................. 77
SECTION 12.06. Subrogation...................................................................... 77
SECTION 12.07. Relative Rights.................................................................. 77
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor................................. 77
SECTION 12.09. Rights of Trustee and Paying Agent............................................... 77
SECTION 12.10. Distribution or Notice to Representative......................................... 78
v
SECTION 12.11. Article XII Not to Prevent Events of Default or Limit Right
to Accelerate............................................................................... 78
SECTION 12.12. Trustee Entitled to Rely......................................................... 78
SECTION 12.13. Trustee to Effectuate Subordination.............................................. 79
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
Guarantor................................................................................... 79
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor on
Subordination Provisions.................................................................... 79
ARTICLE XIII MISCELLANEOUS........................................................................... 79
SECTION 13.01. Trust Indenture Act Controls..................................................... 79
SECTION 13.02. Notices.......................................................................... 79
SECTION 13.03. Communication by Holders with Other Holders...................................... 80
SECTION 13.04. Certificate and Opinion as to Conditions Precedent............................... 80
SECTION 13.05. Statements Required in Certificate or Opinion.................................... 81
SECTION 13.06. When Securities Disregarded...................................................... 81
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar..................................... 81
SECTION 13.08. Legal Holidays................................................................... 82
SECTION 13.09. GOVERNING LAW.................................................................... 82
SECTION 13.10. No Recourse Against Others....................................................... 82
SECTION 13.11. Successors....................................................................... 82
SECTION 13.12. Multiple Originals............................................................... 82
SECTION 13.13. Table of Contents; Headings...................................................... 82
vi
CROSS-REFERENCE TABLE
TIA Section Indenture
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Section Section
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310 (a) (1) 7.10
(a) (2) 7.10
(a) (3) N.A.
(a) (4) N.A.
(b) 7.08; 7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.04
(b) 13.03
(c) 13.03
313 (a) 7.06
(b) (1) N.A.
(b) (2) 7.06
(c) 13.02
(d) 7.06
314 (a) 4.02; 4.09
(b) N.A.
(c) (1) 13.04
(c) (2) 13.04
(c) (3) 13.04
(d) N.A.
(e) 13.05
(f) N.A.
315 (a) 7.01
(b) 7.05; 13.02
(c) 7.01
(d) 7.01
(e) 6.11
316 (a) (last sentence) 13.06
(a) (1) (A) 6.05
(a) (1) (B) 6.04
(a) (2) N.A.
(b) 6.07
317 (a) (1) 6.08
(a) (2) 6.09
(b) 2.05
318 (a) 13.01
N.A. means Not Applicable
_____________________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
INDENTURE dated as of [DATE], among HARBORSIDE HEALTHCARE CORPORATION, a
Delaware corporation (the "Company"), and UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of (i) the Company's 12% Senior
Subordinated Discount Notes due 2007 issued on the date hereof, (ii) any
Additional Securities that may be issued on any other Issue Date (all such
Securities in clauses (i) and (ii) being referred to collectively as the
"Initial Securities"). The Securities issued on the date hereof will be limited
to $100,285,000 in aggregate principal amount at maturity. Subject to the
conditions set forth herein, the Company may issue Additional Securities.
WHEREAS, the Company has issued an aggregate of $170,000,000 in principal
amount of 11% Senior Subordinated Discount Notes due 2008 (the "Old Notes")
pursuant to an indenture dated as of July 31, 1998 (the "Old Indenture").
Pursuant to an exchange offer, the Company is issuing Securities to the holders
of the Old Notes in exchange for Old Notes.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions .
"Accreted Value" means, for any date, the amount calculated pursuant to
clauses (i), (ii), (iii) or (iv) for each $1,000 principal amount at maturity of
Securities:
(i) if the date occurs on one of the following dates (each an " Accrual
Date"), the Accreted Value will equal the amount set forth below for such
Accrual Date:
Accrual Date Accreted Value
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May 1, 2001 $ 685.67
August 1, 2001................................................... $ 704.96
February 1, 2002................................................. $ 747.26
August 1, 2002................................................... $ 792.09
February 1, 2003................................................. $ 839.62
August 1, 2003................................................... $ 889.97
February 1, 2004................................................. $ 943.40
August 1, 2004................................................... $1000.00
(ii) if the date occurs between two Accrual Dates, the Accreted Value will
equal the sum of (a) the Accreted Value for the Accrual Date immediately
preceding such date and (b) an amount equal to the product of (1) Accreted
Value for the immediately following Accrual Date less the Accreted Value
for the immediately preceding Accrual Date multiplied by (2) a fraction,
the numerator of which is the number of days from the immediately preceding
Accrual Date to the
date, using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
(iii) if the date occurs after the last Accrual Date, the Accreted Value
will equal $1,000.
"Acquired Debt" means, with respect to any specified Person, (i) Debt of
any other Person existing at the time such other Person is merged with or into
or became a Restricted Subsidiary of such specified Person, (ii) Debt incurred
by such specified Person, its Restricted Subsidiaries or such other Person for
the purpose of financing the acquisition of such other Person or its assets,
provided that such other Person becomes or, in the case of an asset purchase,
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the Person acquiring such assets is, a Restricted Subsidiary, and (iii) Debt
secured by a Lien encumbering any asset acquired by such specified Person.
"Additional Exchangeable Preferred Stock" means, with respect to any
Exchangeable Preferred Stock, additional shares of such Exchangeable Preferred
Stock having identical terms and conditions to such Exchangeable Preferred Stock
that are issued pursuant to the terms of the Certificate of Designation for such
Exchangeable Preferred Stock.
"Additional Securities" shall mean Initial Securities initially issued
subsequent to the date hereof pursuant to Article II and in compliance with
Section 4.03.
"Affiliate" of any specified Person means (i) any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person, (ii) any other Person that owns, directly or
indirectly, 5% or more of such specified Person's Voting Stock or (iii) any
Person who is a director or officer (a) of such Person, (b) of any Subsidiary of
such Person or (c) of any Person described in clause (i) or (ii) above. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Co-registrar.
"Applicable Premium" means, with respect to a Security at any redemption
date prior to August 1, 2002, the greater of (i) 1.0% of the Accreted Value of
such Security or (ii) the excess of (A) the present value at such time of the
redemption price of such Security at August 1, 2002 (such redemption price being
set forth in the table in Section 3.07(a)), computed using a discount rate equal
to the Treasury Rate plus 50 basis points, over (B) the Accreted Value of such
Security on the redemption date.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including by way of a sale and leaseback) (provided that
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the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Company will be governed by Article V and not by the
provisions of Section 4.06), and (ii) the issue or sale by the Company or any of
its Restricted Subsidiaries of Equity Interests of any of the Company's
Subsidiaries (other than director's qualifying shares), in the case of either
clause (i) or (ii), whether in a single
2
transaction or a series of related transactions (a) that have a fair market
value in excess of 2.5% of Total Assets or (b) for net proceeds in excess of
2.5% of Total Assets. Notwithstanding the foregoing, the following will not be
Asset Sales: (i) a transfer of assets by the Company to a Restricted Subsidiary
or by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary, (ii) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary, (iii) a Restricted Payment or
Permitted Investment that is permitted by Section 4.04 (including any formation
of or contribution of assets to a Subsidiary or joint venture), (iv) leases or
subleases, in the ordinary course of business, to third parties of real property
owned in fee or leased by the Company or its Subsidiaries, (v) a disposition, in
the ordinary course of business, of a lease of real property, (vi) any
disposition of property of the Company or any of its Subsidiaries that, in the
reasonable judgment of the Company, has become uneconomic, obsolete or worn out,
(vii) any disposition of property or assets (including any disposition of
inventory, accounts receivable and any licensing agreements) in the ordinary
course of business, (viii) the sale of Cash Equivalents and Investment Grade
Securities or any disposition of cash, (ix) any exchange of property or assets
by the Company or a Restricted Subsidiary in exchange for cash or Cash
Equivalents or property or assets that will be used or useful in the business
conducted by the Company or any of its Restricted Subsidiaries, provided any
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such cash and Cash Equivalents are applied as if they were Net Proceeds of an
Asset Sale, and (x) the sale or factoring of receivables on customary market
terms pursuant to Credit Facilities but only if the proceeds thereof received by
the Company and its Restricted Subsidiaries represent the fair market value of
such receivables.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of the Board of Directors
of such Person.
"Board Resolution" means a copy of a resolution certified by an Officer of
the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in New York State are authorized or required by law
to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any similar participation in profits and losses or equity of a Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
3
deposits, in each case with any commercial bank or trust company having capital
and surplus in excess of $300.0 million, (iv) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) above entered into with any financial institution meeting
the qualifications specified in clause (iii) above, (v) commercial paper having
the highest rating obtainable from Xxxxx'x Investors Service, Inc. ("Moody's")
or Standard & Poor's Ratings Services, a division of the XxXxxx-Xxxx Companies,
Inc. ("S&P"), and in each case maturing within one year after the date of
acquisition, (vi) investment funds investing 95% of their assets in securities
of the types described in clauses (ii)-(v) above, (vii) readily marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two highest rating categories
obtainable from either Xxxxx'x or S&P and (viii) Debt with a rating of "A" or
higher from S&P or "A2" or higher from Xxxxx'x and having a maturity of not more
than one year from the date of acquisition.
"Change of Control" means the occurrence of any of the following events:
(i) prior to the first public offering of Voting Stock of the Company, any
other "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) that does not include any member of the Initial Control Group
has beneficial ownership of more of the total voting power of the Voting
Stock of the Company than the Initial Control Group (for purposes of this
clause (i), the Initial Control Group shall be deemed to beneficially own
all Voting Stock of an entity (the "specified entity") held by any other
entity (the "parent entity") so long as the Initial Control Group
beneficially owns (as so defined), directly or indirectly, in the aggregate
a majority of the voting power of the Voting Stock of the parent entity);
(ii) following the first public offering of Voting Stock of the Company (A)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more members of the Initial Control Group,
is or becomes the beneficial owner (as defined in clause (i) above),
directly or indirectly, of more than 40% of the total voting power of the
Voting Stock of the Company and (B) the Initial Control Group "beneficially
owns" (as defined in clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting Stock
of the Company, than such other person and does 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 of the Company (for purposes
of this clause (ii), such other person shall be deemed to beneficially own
all Voting Stock of a specified entity held by a parent entity, if such
other person "beneficially owns" (as defined in clause (i) above), directly
or indirectly, in the aggregate more than 40% of the voting power of the
Voting Stock of such parent entity and the Initial Control Group
"beneficially owns" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of the
Voting Stock of such parent entity and does 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 of such parent entity); or
4
(iii) at any time after the first public offering of common stock of the
Company, any person other than the Initial Control Group (or their
designated board members), (A) (I) nominates one or more individuals for
election to the Board of Directors of the Company and (II) solicits
proxies, authorizations or consents in connection therewith and (B) such
number of nominees elected to serve on the Board of Directors in such
election and all previous elections after the first Issue Date represents a
majority of the Board of Directors of the Company following such election.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Hedging Agreements" means any futures contract or other similar
agreement or arrangement designed to protect the Company or any Restricted
Subsidiary against fluctuations in commodities prices.
"Company" means Harborside Healthcare Corporation until a successor
replaces it pursuant to this Indenture and thereafter shall mean such successor
corporation.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period (A) plus (without
duplication), to the extent deducted in computing such Consolidated Net Income,
(i) Consolidated Interest Expense and the amortization of debt issuance costs,
commissions, fees and expenses of such Person and its Restricted Subsidiaries
for such period, (ii) provision for taxes based on income or profits (including
franchise taxes) of such Person and its Restricted Subsidiaries for such period,
(iii) depreciation and amortization expense, including amortization of inventory
write-up under APB 16, amortization of intangibles (including goodwill and the
noncash costs of Interest Rate Agreements, Commodity Hedging Agreements or
Currency Agreements, license agreements and non-competition agreements), noncash
amortization of Capital Lease Obligations, and organization costs, (iv) noncash
expenses related to the amortization of management fees paid on or prior to the
Old Issue Date, (v) expenses and charges related to any equity offering or
Incurrence of Debt permitted to be Incurred by this Indenture (including any
such expenses or charges relating to the Recapitalization or the Financial
Restructuring), (vi) the amount of any restructuring charge or reserve
(including any such charge or reserve related to the Recapitalization or the
Financial Restructuring), (vii) unrealized gains and losses from hedging,
foreign currency or commodities translations and transactions, (viii) expenses
consisting of internal software development costs that are expensed during the
period but could have been capitalized in accordance with GAAP, (ix) any write-
downs, write-offs, and other noncash charges, items and expenses, (x) the amount
of expense relating to any minority interest in a Restricted Subsidiary, and
(xi) costs of surety bonds in connection with financing activities, and (B)
minus any cash payment for which a reserve or charge of the kind described in
clauses (vi), (ix) or (x) of subclause (A) above was taken previously during
such period.
"Consolidated Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Consolidated Interest Expense of
such Person and its Restricted Subsidiaries for such period. In the event that
the Company or any of its Restricted Subsidiaries Incurs, assumes, Guarantees,
redeems or repays any Debt (other than revolving credit borrowings) or issues or
redeems
5
Preferred Stock subsequent to the commencement of the period for which
the Consolidated Coverage Ratio is being calculated but prior to the date on
which the event for which the calculation of the Consolidated Coverage Ratio is
made (the "Calculation Date"), then the Consolidated Coverage Ratio shall be
calculated giving pro forma effect to such Incurrence, assumption, Guarantee,
---------
redemption or repayment of Debt, or such issuance or redemption of Preferred
Stock, as if the same had occurred at the beginning of the applicable four-
quarter reference period. For purposes of making the computation referred to
above, Investments, acquisitions, dispositions, mergers and consolidations that
have been made by the Company or any of its Restricted Subsidiaries during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date, and discontinued operations determined in
accordance with GAAP on or prior to the Calculation Date, shall be given effect
on a pro forma basis assuming that all such Investments, acquisitions,
---------
dispositions, mergers and consolidations or discontinued operations (and the
reduction or increase of any associated Consolidated Interest Expense, and the
change in Consolidated Cash Flow, resulting therefrom, including because of
reasonably anticipated cost savings) had occurred on the first day of the four-
quarter reference period. 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 Investment, acquisition, disposition, merger or consolidation or
determined a discontinued operation, that would have required adjustment
pursuant to this definition, then the Consolidated Coverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such
---------
Investment, acquisition, disposition, merger or consolidation or discontinued
operations had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to a
---------
transaction, the pro forma calculations shall be made in good faith by a
---------
financial or accounting officer of the Company. If any Debt to which pro forma
---------
effect is given bears interest at a floating rate, the interest expense on such
Debt shall be calculated as if the rate in effect on the Calculation Date had
been the applicable interest rate for the entire period (taking into account any
Interest Rate Agreement in effect on the Calculation Date). Interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Company to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP. Interest on Debt that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Company may designate.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated net interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including amortization of original issue discount, noncash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges Incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations relating to Interest Rate Agreements or
Currency Agreements with respect to Debt, excluding, however, (A) amortization
--------- -------
of debt issuance costs, commissions, fees and expenses, (B) customary
commitment, administrative and transaction fees and charges and (C) expenses
attributable to letters of credit or similar arrangements supporting insurance
certificates issued to
6
customers in the ordinary course of business), (ii) any interest expense on Debt
of another Person that is Guaranteed by or secured by a Lien on assets of such
Person or one of its Restricted Subsidiaries (but only to the extent such
Guarantee or Lien has then been called upon), and (iii) cash dividends paid in
respect of any Preferred Stock of such Person or any Restricted Subsidiary of
such Person held by Persons other than the Company or a Subsidiary, in each
case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income of any Person that is not a Restricted
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Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Restricted Subsidiary of such Person, (ii) the
Net Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, prohibited by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders unless such restriction with respect to the payment of dividends
has been permanently waived, (iii) except for purposes of calculating
"Consolidated Cash Flow," the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded (effected either through cumulative effect adjustment or a
retroactive application, in each case, in accordance with GAAP), (v) to the
extent deducted in determining Net Income, the fees, expenses and other costs
Incurred in connection with the Recapitalization or the Financial Restructuring,
including payments to management contemplated by the Recapitalization Agreement,
shall be excluded, and (vi) to the extent deducted in determining Net Income,
any noncash charges resulting from any write-up, write-down or write-off of
assets, of the Company and its Restricted Subsidiaries in connection with the
Recapitalization or the Financial Restructuring, shall be excluded.
"Credit Facilities" means, with respect to the Company, one or more debt
facilities (including the Existing Credit Facility) or commercial paper
facilities with banks, insurance companies or other institutional lenders
providing for revolving credit loans, term loans, synthetic lease financing,
notes, receivables factoring or other financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
or issue securities to such lenders against such receivables) or letters of
credit or other credit facilities, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement to which the Company or any
Restricted Subsidiary is a party or of which it is a beneficiary.
"Debt" means, with respect to any Person (without duplication), (i) any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in
7
respect thereof) or banker's acceptances or representing Capital Lease
Obligations or the balance deferred and unpaid of the purchase price of any
property, which purchase price is due more than six months after the date of
placing such property in final service or taking final delivery thereof, or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would appear
as a liability upon a balance sheet of such Person prepared in accordance with
GAAP, (ii) all indebtedness under clause (i) of other Persons secured by a Lien
on any asset of such Person (whether or not such indebtedness is assumed by such
Person), provided that the amount of indebtedness of such Person shall be the
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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, and (iii) to the
extent not otherwise included, the Guarantee by such Person of any Debt under
clause (i) of any other Person; provided, however, that Debt shall not include
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(a) obligations of the Company or any of its Restricted Subsidiaries arising
from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees of Debt Incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for the
purpose of financing such acquisition; provided, however, that (x) such
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obligations are not reflected on the balance sheet of the Company or any
Restricted Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet will not
be deemed to be reflected on such balance sheet for purposes of this clause (x))
and (y) the maximum assumable liability in respect of all such obligations shall
at no time exceed the gross proceeds including noncash proceeds (the fair market
value of such noncash proceeds being measured at the time received and without
giving effect to any subsequent changes in value) actually received by the
Company and its Restricted Subsidiaries in connection with such disposition, (b)
(A) obligations under (or constituting reimbursement obligations with respect
to) letters of credit, performance bonds, surety bonds, appeal bonds, completion
guarantees or similar instruments issued in connection with the ordinary course
of business conducted by the Company, including letters of credit in respect of
workers' compensation claims, security or lease deposits and self-insurance;
provided, however, that upon the drawing of such letters of credit or other
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instrument, such obligations are reimbursed within 30 days following such
drawing, and (B) obligations arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of day-light overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such obligations are
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extinguished within three Business Days of Incurrence, or (c) retentions in
connection with purchasing assets in the ordinary course of business of the
Company and its Restricted Subsidiaries. The amount of any Debt outstanding as
of any date shall be the lesser of (i) the accreted value thereof, and (ii) the
principal amount thereof, provided that the amount of Permitted Debt under
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clause (i) or (x) of the definition thereof, at the Company's election, but
without duplication, may be reduced by the principal amount (not to exceed $7.5
million) of the note receivable issued to Harborside before the Old Issue Date
in connection with the leasing of certain nursing home facilities in the State
of Connecticut.
"Default" means any event that, with the passage of time or the giving of
notice or both, would be an Event of Default.
8
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Designated Senior Debt" means (i) any Debt outstanding under the Existing
Credit Facility and (ii) any other Senior Debt permitted under this Indenture
the principal amount of which is $25.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
on which the Securities mature; provided, however, that (A) if such Capital
Stock is issued to any plan for the benefit of employees of the Company or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations, (B) any Capital Stock that would constitute Disqualified
Stock solely because the holders of the Capital Stock have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.04 of this Indenture, and (C) prior to the
consummation of an initial public offering by the Company, no class of common
stock of the Company, whether currently in existence or created after the date
hereof, shall constitute Disqualified Stock solely because it is required to be
redeemed to the extent that it does not exercise a right to "tag-along" with a
sale of the Company's Class D Common Stock, provided that the Company is
required to issue to the purchaser of such Class D Common Stock a number of
shares of any class of common stock equal to the number of shares that were
redeemed, at a purchase price equal to the redemption price. For the avoidance
of doubt, Exchangeable Preferred Stock shall not be considered "Disqualified
Stock."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the Company's 13% Subordinated Exchange
Debentures due 2008 issued in exchange for the New Preferred Stock and any
Exchange Debentures issued as payments in kind interest thereon.
"Exchange Debenture Indenture" means the indenture pursuant to which the
Exchange Debentures are to be issued, as it may from time to time be amended or
supplemented.
"Exchange Offer" means the offer by the Company to exchange (i) Securities,
warrants to purchase shares of the Company's Class A Common Stock and cash for
all outstanding Old
9
Notes and (ii) warrants to purchase shares of the Company's Class A Common Stock
for all outstanding shares of the Company's 13-1/2% Exchangeable Preferred Stock
Mandatorily Redeemable 2010.
"Exchangeable Preferred Stock" means the Company's 13-1/2% Exchangeable
Preferred Stock Mandatorily Redeemable 2010, as renamed and reclassified on or
after the date of this Indenture.
"Existing Credit Facility" means the collective reference to (a) the Credit
Agreement among the Issuer and certain Subsidiaries of the Issuer named therein
and the financial institutions named therein, any Credit Documents (as defined
therein) and any related notes, collateral documents, letters of credit,
participation agreements, guarantees and other documents part of or relating to
the Credit Documents, including any appendices, exhibits or Schedules to any of
the foregoing (as the same may be in effect from time to time), and (b) the
Synthetic Lease Facility described in the Credit Agreement, including the Lease
between a Subsidiary of the Issuer, as lessee, and the Delaware business trust
named therein, as lessor (the "Lessor"), the Credit Agreement among the Lessor
and the financial institutions named therein, the Participation Agreement among
the parties to the Lease, the parties to the Credit Agreement, the Trustee of
Lessor, and the Investors in Lessor, and the additional Operative Agreements
described in the Participation Agreement, including any appendices, exhibits or
schedules to any of the foregoing (as the same may be in effect from time to
time), in each case, as such agreements may have been amended, modified,
supplemented or restated prior to the first Issue Date or may be amended,
modified, supplemented or restated from time to time thereafter, or refunded,
refinanced, restructured, replaced, renewed, repaid or extended from time to
time (whether with the original agents and lenders or other agents or lenders or
otherwise, and whether provided under the original credit agreements or other
credit agreements or otherwise). For purposes of this definition, capitalized
terms used in this definition and not defined have the meanings given in the
Existing Credit Facility.
"Existing Debt" means Debt of the Company and its Restricted Subsidiaries
(other than Debt under the Existing Credit Facility) in existence on the Old
Issue Date, until such amounts are repaid.
"Financial Restructuring" means the various transactions contemplated by
the Restructuring Agreement, including but not limited to the Exchange Offer,
the solicitation by the Company of consents to amendments to the Old Indenture
and the certificate of designation for the Company's 13-1/2% Exchangeable
Preferred Stock due 2010 and the purchase by Investcorp of the Company's 13%
Convertible Exchangeable Preferred Stock due 2008 and warrants to purchase the
Company's Class A Common Stock, par value $0.01 per share.
"Foreign Subsidiary" means any Subsidiary of the Company formed under the
laws of any jurisdiction other than the United States or any political
subdivision thereof substantially all of the assets of which are located outside
of the United States or that conducts substantially all of its business outside
of the United States.
"Full Accretion Date" means August 1, 2004.
10
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, 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 have been 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 as in effect as of the Old
Issue Date.
"Government Securities" means non-callable direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Debt.
"Guarantors" means (i) each of the Company's Subsidiaries on the first
Issue Date, other than the Subsidiary Non-Guarantors on such date and (ii) each
Restricted Subsidiary that executes and delivers a Security Guarantee after the
first Issue Date, and their respective successors and assigns, in each case
until released from its Security Guarantee in accordance with the terms of this
Indenture.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under Interest Rate Agreements, Currency Agreements or Commodity
Hedging Agreements.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered in the register for the Securities.
"HRI" means Harborside of Rhode Island L.P., a Massachusetts limited
partnership, or its successor.
"Incur", "Incurring" and "Incurred" means to, directly or indirectly,
create, Incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise; provided, however, that any Debt
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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.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Initial Control Group" means Investcorp, its Affiliates, any Person acting
in the capacity of an underwriter or initial purchaser in connection with a
public or private offering of the Company's Capital Stock, any employee benefit
plan of the Company or any of its Subsidiaries or any participant therein, a
trustee or other fiduciary holding securities under any such employee benefit
plan or any Permitted Transferee of any of the foregoing Persons.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, repurchase agreement, futures contract or other financial
agreement or arrangement
11
designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investcorp" means Investcorp S.A. and certain affiliates thereof.
"Investment Grade Securities" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents) having maturities of not
more than one year from the date of acquisition, (ii) debt securities or debt
instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Xxxxx'x
or the equivalent of such rating by such rating organization, or, if no rating
of S&P or Xxxxx'x then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries having maturities of not more than one year from the date of
acquisition, and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii), which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Debt or other obligations, but excluding
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advances or capital
contributions (excluding commission, travel, payroll, entertainment, relocation
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Debt, Equity
Interests or other securities. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person 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 Equity Interests of such
Subsidiary not sold or disposed of, in an amount determined as provided in the
third to last paragraph of Section 4.04.
"Investors" shall mean Investcorp and certain other international investors
organized by Investcorp.
"Issue Date" means the date on which any Securities are originally issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement or any lease
in the nature thereof); provided that in no event shall an operating lease be
--------
deemed to constitute a Lien.
"Net Income" means, with respect to any Person and any period, the net
income (or loss) of such Person for such period, determined in accordance with
GAAP and before any reduction in respect of Preferred Stock dividends,
excluding, however, (i) any extraordinary or non-recurring gains or losses or
charges and gains or losses (including any losses relating to the
12
Financial Restructuring) or charges from the sale of assets outside the ordinary
course of business, together with any related provision for taxes on such gain
or loss or charges and (ii) deferred financing costs written off in connection
with the early extinguishment of Debt; provided, however, that Net Income shall
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be deemed to include any increases during such period to shareholder's equity of
such Person attributable to tax benefits from net operating losses and the
exercise of stock options that are not otherwise included in Net Income for such
period.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including any
cash received upon the sale or other disposition of any noncash consideration
received in any Asset Sale), net of the direct costs relating to such Asset Sale
(including legal, accounting and investment banking fees, and brokerage and
sales commissions) and any relocation, redundancy and closing costs Incurred as
a result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts applied to the repayment of principal, premium (if any)
and interest on Debt that is not subordinated to the Securities required (other
than required by clause (a) of the second paragraph of Section 4.06) to be paid
as a result of such transaction, all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale, and any deduction of appropriate amounts to be
provided by the Company as a reserve, in accordance with GAAP, against any
liabilities associated with the asset disposed of in such transaction and
retained by the Company after such sale or other disposition thereof, including
pension and other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
such transaction.
"New Preferred Stock" means the Company's 13% Convertible Exchangeable
Preferred Stock Mandatorily Redeemable 2008 and any shares of the Company's 13%
Convertible Exchangeable Preferred Stock Mandatorily Redeemable 2008 issued as
payment of dividends thereon.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, Guarantees and other liabilities
payable under the documentation governing any Debt, in each case whether now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or Incurred, whether or
not arising on or after the commencement of a proceeding under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
"Officers" means any of the following: Chairman, President, Chief
Executive Officer, Treasurer, Chief Financial Officer, Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer reasonably acceptable to the Trustee.
"Officers' Certificate" means a certificate signed by two Officers.
"Old Issue Date" means July 31, 1998.
"Old Notes" means the Company's 11% Senior Subordinated Discount Notes
issued pursuant to the Old Indenture.
13
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Debt" means any Debt of the Company or any Guarantor that ranks
pari passu with the Securities or the relevant Security Guarantee.
---- -----
"Paying Agent" has the meaning provided in Section 2.04, except that, for
the purposes of Article Eight, the Paying Agent shall not be the Company or a
Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Payment" means, with respect to the Securities, any payment, whether in
cash or other assets or property, of interest, principal (including redemption
price and purchase price), premium, Liquidated Damages or any other amount on,
of or in respect of the Securities, any other acquisition of Securities and any
deposit into the trust described in Article VIII. The verb "pay" has a
correlative meaning.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary (including in any Equity Interests of a Restricted
Subsidiary); (b) any Investment in cash, Cash Equivalents or Investment Grade
Securities; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary or (ii) such Person, in one transaction or a
series of substantially concurrent related transactions, is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary; (d)
any securities or other assets received or other Investments made as a result of
the receipt of noncash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.06 or in connection with any other
disposition of assets not constituting an Asset Sale; (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) loans or advances to employees (or
guarantees of third party loans to employees) in the ordinary course of
business; (g) stock, obligations or securities received in satisfaction of
judgments, foreclosure of liens or settlement of debts (whether pursuant to a
plan of reorganization or similar arrangement); (h) 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 (including such concessionary terms as the Company or such
Restricted Subsidiary deems reasonable); (i) any Investment existing on the Old
Issue Date or made pursuant to legally binding written commitments in existence
on the Old Issue Date; (j) Investments in Interest Rate Agreements, Currency
Agreements and Commodity Hedging Agreements otherwise permitted under this
Indenture; and (k) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (k) that
are at that time outstanding, not to exceed 15.0% of Total Assets at the time of
such Investment (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value).
"Permitted Junior Securities" means debt or equity securities of the
Company or any successor corporation issued pursuant to a plan of reorganization
or readjustment of the Company that are subordinated to the payment of all
Senior Debt at least to the same extent that
14
the Securities are subordinated to the payment of all Senior Debt on the first
Issue Date, so long as (i) the effect of the use of this defined term in the
subordination provisions described in Article X is not to cause the Securities
to be treated as part of (a) the same class of claims as the Senior Debt or (b)
any class of claims pari passu with, or senior to, the Senior Debt for any
payment or distribution in any case or proceeding or similar event relating to
the liquidation, insolvency, bankruptcy, dissolution, winding-up or
reorganization of the Company and (ii) to the extent that any Senior Debt
outstanding on the date of consummation of any such plan of reorganization or
readjustment is not paid in full in cash on such date, either (a) the holders of
any such Senior Debt not so paid in full in cash have accepted as a class the
terms of such plan of reorganization or readjustment or (b) such holders receive
securities that constitute Senior Debt and that have been determined by the
relevant court to constitute satisfaction in full in money or money's worth of
any Senior Debt not paid in full in cash.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company and
Guarantors and unsubordinated Debt of a Subsidiary Non-Guarantor (in each case
including related Obligations) that was permitted by the terms of this Indenture
to be Incurred; (ii) Liens in favor of the Company or any Restricted Subsidiary;
(iii) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company or any Restricted Subsidiary of the
Company, provided that such Liens were in existence prior to the contemplation
--------
of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or a Restricted
Subsidiary, as the case may be; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
--------
acquisition and do not extend to any assets other than those acquired; (v)
banker's Liens, rights of setoff and Liens to secure the performance of bids,
tenders, trade or government contracts (other than for borrowed money), leases,
licenses, statutory obligations, surety or appeal bonds, performance bonds or
other obligations of a like nature Incurred in the ordinary course of business;
(vi) without limitation of clause (i), Liens to secure Acquired Debt; (vii)
Liens existing on the Old Issue Date; (viii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings, provided that any reserve or
--------
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; (ix) Liens Incurred in the ordinary course of business
of the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time outstanding and that
(a) are not Incurred in connection with the borrowing of money or the obtaining
of advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate materially detract from the value of
the property or materially impair the use thereof in the operation of business
by the Company or such Restricted Subsidiary; (x) carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business in respect of obligations that are not yet
due or that are bonded 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 Restricted Subsidiary, as the case may be,
in accordance with GAAP; (xi) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security legislation;
(xii) 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,
15
in the ordinary course of business, that do not in the aggregate materially
detract from the aggregate value of the properties of the Company and its
Subsidiaries, taken as a whole, or in the aggregate materially interfere with or
adversely affect in any material respect the ordinary conduct of the business of
the Company and its Subsidiaries on the properties subject thereto, taken as a
whole; (xiii) Liens on goods (and the proceeds thereof) and documents of title
and the property covered thereby securing Debt in respect of commercial letters
of credit; (xiv) (A) mortgages, Liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any Restricted Subsidiary of the Company has easement rights or on any real
property leased by the Company or any Restricted Subsidiary on the first Issue
Date and subordination or similar agreements relating thereto and (B) any
condemnation or eminent domain proceedings affecting any real property; (xv)
leases or subleases to third parties; (xvi) Liens in connection with workmen's
compensation obligations and general liability exposure of the Company and its
Restricted Subsidiaries; (xvii) Liens arising by reason of a judgment, decree or
court order, to the extent not otherwise resulting in an Event of Default;
(xviii) Liens securing Hedging Obligations entered into in the ordinary course
of business; (xix) without limitation of clause (i), Liens securing Permitted
Refinancing Debt permitted to be Incurred under this Indenture or amendments or
renewals of Liens that were permitted to be Incurred, provided, in each case,
that (A) such Liens do not extend to an additional property or asset of the
Company or a Restricted Subsidiary and (B) such Liens do not secure Debt in
excess of the amount of Permitted Refinancing Debt permitted to be Incurred
under this Indenture or the principal amount of (or accreted value, if
applicable), plus accrued interest on, the Debt (plus the amount of reasonable
premium and fees and expenses Incurred in connection therewith) secured by the
Lien being amended or renewed, as the case may be; (xx) Liens that secure Debt
of a Person existing at the time such Person becomes a Restricted Subsidiary of
the Company, provided that such Liens do not extend to any assets other than
--------
those of the Person that became a Restricted Subsidiary of the Company, and
(xxi) any provision for the retention of title to an asset by the vendor or
transferor of such asset, which asset is acquired by the Company or any
Restricted Subsidiary in a transaction entered into in the ordinary course of
business of the Company or such Restricted Subsidiary and for which kind of
transaction it is normal market practice for such retention of title provision
to be included.
"Permitted Refinancing Debt" means any Debt of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other Debt of the
Company or any of its Restricted Subsidiaries Incurred in compliance with
Section 4.02(a) or Section 4.02(b)(ii), (iii), (iv), (v) or (ix) of this
Indenture, provided that: (i) the principal amount (or accreted value, if
--------
applicable) of such Permitted Refinancing Debt does not exceed the principal
amount of (or accreted value, if applicable), plus accrued interest on, the Debt
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable premium and fees and expenses Incurred in connection
therewith); (ii) in the case of term Debt, (1) principal payments required under
such Permitted Refinancing Debt have a Stated Maturity no earlier than the
earlier of (A) the Stated Maturity of those under the Debt being refinanced and
(B) the maturity date of the Securities and (2) such Permitted Refinancing Debt
has a Weighted Average Life to Maturity equal to or greater than the lesser of
the Weighted Average Life to Maturity of the Debt being extended, refinanced,
renewed, replaced, defeased or refunded and the Weighted Average Life to
Maturity of the Securities; (iii) if the Debt being extended, refinanced,
renewed, replaced, defeased or
16
refunded is subordinated in right of payment to the Securities, such Permitted
Refinancing Debt has a final maturity date later than the final maturity date
of, and is subordinated in right of payment to, the Securities on terms at least
as favorable to the Holders of Securities as those contained in the
documentation governing the Debt being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Debt is Incurred either by the Company or by
its Restricted Subsidiary who is the obligor on the Debt being extended,
refinanced, renewed, replaced, defeased or refunded. The Company may Incur
Permitted Refinancing Debt not more than six months prior to the application of
the proceeds thereof to repay the Debt to be refinanced; provided that, upon the
--------
Incurrence of such Permitted Refinancing Debt, the Company shall provide written
notice thereof to the Trustee, specifically identifying the Debt to be
refinanced with Permitted Refinancing Debt.
"Permitted Transferee" means, with respect to any Person, (i) any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) the spouse, former
spouse, lineal descendants, heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any such Person, (iii) a trust, the
beneficiaries of which, or a corporation or partnership or limited liability
company, the stockholders, general or limited partners or members of which,
include only such Person or his or her spouse, lineal descendants or heirs, in
each case to whom such Person has transferred, or through which it holds, the
beneficial ownership of any securities of the Company and (iv) any investment
fund or investment entity that is a subsidiary of such Person or a Permitted
Transferee of such Person.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Equity Interests" means Preferred Stock and all warrants,
options or other rights to acquire Preferred Stock (but excluding any debt
security that is convertible into, or exchangeable for, Preferred Stock).
"Preferred Stock" means, with respect to any Person, any Capital Stock of
such Person (however designated) that is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person. With respect to the Company,
"Preferred Stock" includes the Exchangeable Preferred Stock.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security that is due or overdue or is to become
due at the relevant time.
"Recapitalization" means the recapitalization of the Company pursuant to
the Recapitalization Agreement and the financing transactions related thereto.
"Recapitalization Agreement" means the Agreement and Plan of Merger dated
as of April 15, 1998 by and between HH Acquisition Corp. and the Company, as
amended.
"Representative" means any agent or representative in respect of any
Designated Senior Debt; provided that if, and for so long as, any Designated
--------
Senior Debt lacks such a
17
representative, then the Representative for such Designated Senior Debt shall at
all times constitute the holders of a majority in outstanding principal amount
of such Designated Senior Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Restructuring Agreement" means that certain Agreement, dated as of March
13, 2001, among the Company, Investcorp and certain holders of the Company's 11%
Senior Subordinated Discount Notes due 2008 and the Company's 13-1/2%
Exchangeable Preferred Stock due 2010.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means any Debt of the Company or any Subsidiary secured by a
Lien.
"Securities" has the meaning stated in the recital of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture. From and after the issuance of any Additional Securities (but not
for purposes of determining whether such issuance is permitted hereunder),
"Securities" shall include such Additional Securities for purposes of this
Indenture and all Exchange Securities from time to time issued with respect to
any Initial Securities that constitute such Additional Securities. All
Securities, including any such Additional Securities, shall vote together as one
series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" or "Custodian" means the custodian with respect to
any Global Security (as appointed by the Depository), or any successor entity
thereto covered in Section 2.03.
"Security Guarantee" means the Guarantee by each Guarantor of the Company's
Obligations under the Securities pursuant to Article XI.
"Senior Debt" means (i) all Debt of the Company or any Guarantor
outstanding under the Existing Credit Facility and all Hedging Obligations with
respect thereto, (ii) any other Debt (including Acquired Debt) permitted to be
Incurred by the Company or any Guarantor pursuant to Section 4.03, unless the
instrument under which such Debt is Incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Securities or the
relevant Security Guarantee and (iii) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (v) any liability for federal, state, local or other taxes
owed or owing by the Company, (w) any Debt of the Company or any Guarantor to
any of its Subsidiaries, officers, employees or other Affiliates (other than
Debt under any Credit Facility to any such Affiliate), (x) any trade payables,
(y) that portion of Debt Incurred in violation of Section 4.03 (but as to any
such Debt under any Credit Facility, such violation shall be deemed not to exist
for purposes of this clause (y) if the lenders have obtained a representation
from a Senior Officer of the Company to the effect that the issuance of such
Debt does not violate such covenant) or (z) any Debt or obligation of the
Company or any Guarantor
18
that is expressly subordinated in right of payment to any other Debt or
obligation of the Company or such Guarantor, as applicable, including any
Subordinated Debt of the Company. For the avoidance of doubt, the Securities
will constitute "Senior Debt" under the Old Indenture and, therefore, will be
senior in right of payment to the Old Notes.
"Senior Officer" means the Chief Executive Officer or the Chief Financial
Officer of the Company.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such regulation is in effect on the Old Issue
Date.
"Specified Affiliate Payments" means:
(i) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Restricted Subsidiary of the
Company held by any future, present or former employee, director, officer
or consultant of the Company (or any of its Restricted Subsidiaries)
pursuant to any management equity subscription agreement, stock option
agreement, put agreement, stockholder agreement or similar agreement that
may be in effect from time to time; provided that the aggregate price paid
--------
for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $3.0 million in any calendar year and no payment default
on Senior Debt or the Securities shall have occurred and be continuing;
provided further that such amount in any calendar year may be increased by
-------- -------
an amount not to exceed (A) the cash proceeds received by the Company
(including by way of capital contribution) since the Old Issue Date from
the sale of Equity Interests of the Company to employees, directors,
officers or consultants of the Company or its Subsidiaries that occurs in
such calendar year (it being understood that such cash proceeds shall be
excluded from clause (c)(ii) of Section 4.04(a)) plus (B) the cash proceeds
from key man life insurance policies received by the Company and its
Restricted Subsidiaries in such calendar year (including proceeds from the
sale of such policies to the person insured thereby); and provided further
-------- -------
that cancellation of Debt owing to the Company from employees, directors,
officers or consultants of the Company or any of its Subsidiaries in
connection with a repurchase of Equity Interests of the Company will not be
deemed to constitute a Restricted Payment for purposes of this Indenture;
(ii) repurchases of Equity Interests deemed to occur upon exercise of stock
options or warrants as a result of the payment of all or a portion of the
exercise price of such options or warrants with Equity Interests;
(iii) payments by the Company to shareholders or members of management of
the Company and its Subsidiaries in connection with the Recapitalization;
and
(iv) payments or transactions permitted under clause (5) of Section
4.07(b);
19
"Stated Maturity" means, with respect to any installment of interest on or
principal of, or any other amount payable in respect of, any series of Debt, the
date on which such interest, principal or other amount was scheduled to be paid
in the documentation governing such Debt, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest, principal or other
amount prior to the date scheduled for the payment thereof.
"Subordinated Debt" means any Debt of the Company or any Guarantor (whether
outstanding on the first Issue Date or thereafter Incurred) that is subordinate
or junior in right of payment to the Securities or the applicable Security
Guarantee pursuant to written agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof). Unless the context
otherwise requires, "Subsidiary" refers to a Subsidiary of the Company.
"Subsidiary Non-Guarantors" means (i) each of the Subsidiaries of the
Company on the first Issue Date that do not issue or are released from a
Security Guarantee, (ii) each Unrestricted Subsidiary, and (iii) each Restricted
Subsidiary formed or acquired after the first Issue Date that does not execute
and deliver or is released from a Security Guarantee.
"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; provided, however, that, in the
-------- -------
event the Trust Indenture Act of 1939 is amended after such date, "TIA" means,
to the extent required by any such amendments, the Trust Indenture Act of 1939
as so amended.
"Total Assets" means, at any time, the total consolidated assets of the
Company and its Restricted Subsidiaries at such time.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the redemption
date (or, if such Statistical Release is no longer published, any publicly
available source or similar market data)) most nearly equal to the period from
the redemption date to August 1, 2002, provided, however, that if the period
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from the redemption date to August 1, 2002 is not equal to the constant maturity
of a United States Treasury security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the redemption date to August 1, 2002 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
20
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, and (ii) any Subsidiary of an Unrestricted Subsidiary; but in the
case of any Subsidiary referred to in clause (i) (or any Subsidiary of any such
Subsidiary) only to the extent that such Subsidiary: (a) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; and (b) except in the case of a
Foreign Subsidiary, is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.04. If, at any time, any Unrestricted
Subsidiary referred to in clause (ii) of the first sentence of this definition
(or any Subsidiary thereof) would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Debt of such Subsidiary shall
be deemed to be Incurred by a Restricted Subsidiary of the Company as of such
date (and, if such Debt is not permitted to be Incurred as of such date pursuant
to Section 4.03, the Company shall be in default of such covenant). The Board
of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
--------
be deemed to be an Incurrence of Debt by a Restricted Subsidiary of the Company
of any outstanding Debt of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Debt is permitted by Section 4.03,
calculated on a pro forma basis as if such designation had occurred at the
---------
beginning of the four-quarter reference period, and (ii) no Default or Event of
Default would be in existence following such designation.
"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 Company's option.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person, excluding, however, Exchangeable Preferred Stock.
21
"Weighted Average Life to Maturity" means, when applied to any Debt at any
date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Debt.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Affiliate Transaction" 4.07
"Agent Members" 2.07(a)
"Asset Sale Offer" 4.06
"Bankruptcy Law" 6.01
"Change of Control Offer" 3.09(a)
"Change of Control Payment" 4.08(a)
"Covenant Defeasance" 8.01(c)
"Custodian" 6.01
"estate" 8.02(f)
"Event of Default" 6.01
"Excess Proceeds" 4.06
"Excess Proceeds Offer" 3.09(a)
"Global Securities" 2.01
"Global Securities Legend" 2.02
"Guaranteed Obligations" 11.01
"Guarantor non-payment default" 12.03
"Guarantor Payment Blockage Notice" 12.03
"Guarantor payment default" 12.03
"Indemnified Party" 7.07
"Initial Securities" preamble
"Legal Defeasance" 8.01(b)
"Legal Holiday" 13.08
"non-payment default" 10.03
"Notice of Default" 6.01
"Offer Amount" 3.09(a)
"Offer Period" 3.09(a)
"Old Indenture" preamble
"Old Notes" preamble
"Option of Holder to Elect Purchase" 3.09
"Payment Blockage Notice" 10.03
22
"payment default" 10.03
"Permitted Debt" 4.03(b)
"Physical Securities" 2.01
"Purchase Date" 3.09(a)
"Registrar" 2.04
"Repurchase Offer" 3.09(a)
"Restricted Payments" 4.04(a)
"Security Register" 2.04
"Trustee" 8.03
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
-------------------------------------------------
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Security holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on this Indenture securities means the Company, each Guarantor
and any other obligor under this Indenture.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
Secured Debt merely by virtue of its nature as unsecured Debt;
23
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the Company dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Debt; and
(8) the principal amount of any Preferred Stock shall be (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred
Stock, whichever is greater.
ARTICLE II
THE SECURITIES
--------------
SECTION 2.01. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form annexed hereto
as Exhibit A with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, except that
Securities not in the form of Global Securities ("Physical Securities") shall
-------------------
not bear the Global Securities Legend. The Securities may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company is subject or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on the Securities. Each
Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Securities shall be issued initially in the form of one or more permanent
global Securities in registered form, substantially in the form set forth in
Exhibit A (the "Global Securities"), registered in the name of the nominee of
-----------------
the Depositary, deposited with the Trustee, as custodian for the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount at maturity of the U.S. Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary or its nominee,
in accordance with the instructions given by the Holder thereof, as hereinafter
provided.
The definitive Securities shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the Officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 2.02. Global Securities Legend. Each Global Security shall bear
------------------------
the following legend (the "Global Securities Legend") on the face thereof:
------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO
24
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE.
SECTION 2.03. Execution, Authentication and Denominations. Subject to
-------------------------------------------
Section 4.03, the aggregate principal amount at maturity of Securities which may
be authenticated and delivered under this Indenture is unlimited. The
Securities shall be executed by one or more Officers of the Company. The
signature of these Officers on the Securities may be by facsimile or manual
signature in the name and on behalf of the Company.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee or authenticating agent authenticates the Security, the
Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a written order of
the Company authenticate for original issue Securities in the aggregate
principal amount at maturity specified in such order; provided that the Trustee
--------
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
of the Company in connection with such authentication of Securities. Such
written order of the Company shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and, in case of an issuance of Securities pursuant to Section
2.15, shall certify that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate Securities.
Any such appointment shall be evidenced by an instrument signed by the Trustee,
a copy of which shall be furnished to the Company. An authenticating agent may
authenticate Securities whenever the Trustee may do so unless limited by the
terms of such appointment. Each reference in this Indenture to authentication by
the Trustee includes authentication by such authenticating agent.
25
An authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 in principal amount at maturity and any
integral multiple thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain an
--------------------------
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar"), an office or agency where Securities may be
---------
presented for payment (the "Paying Agent") and an office or agency where notices
------------
and demands to or upon the Company in respect of the Securities and this
Indenture may be served, which shall be in the Borough of Manhattan, The City of
New York. The Company shall cause the Registrar to keep a register of the
Securities and of their transfer and exchange (the "Security Register"). The
-----------------
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Company may have one
or more co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall give prompt written
notice to the Trustee of the name and address of any such Agent and any change
in the address of such Agent. If the Company fails to maintain a Registrar,
Paying Agent and/or agent for service of notices and demands, the Trustee shall
act as such Registrar, Paying Agent and/or agent for service of notices and
demands. The Company may remove any Agent upon written notice to such Agent and
the Trustee; provided that no such removal shall become effective until (i) the
--------
acceptance of an appointment by a successor Agent to such Agent as evidenced by
an appropriate agency agreement entered into by the Company and such successor
Agent and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any domestically
organized Wholly Owned Restricted Subsidiary of the Company, or any Affiliate of
any of them may act as Paying Agent, Registrar or co-Registrar, and/or agent for
service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notice and demands. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders and shall otherwise comply with TIA (S)
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee as of each regular record date and at such other times as the Trustee
may reasonably request the names and addresses of Holders as they appear in the
Security Register, including the aggregate principal amount at maturity of
Securities held by each Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than 11:00
-----------------------------------
a.m. (New York City time) on each due date of the principal, premium and
Liquidated Damages, if any, and interest on any Securities, the Company shall
deposit with the Paying Agent money in immediately available funds sufficient to
pay such principal, premium and Liquidated Damages, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of the
26
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium and Liquidated Damages, if any, and interest on the
Securities (whether such money has been paid to it by the Company or any other
obligor on the Securities), and such Paying Agent shall promptly notify the
Trustee of any default by the Company (or any other obligor on the Securities)
in making any such payment. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and account for any funds disbursed,
and the Trustee may at any time during the continuance of any payment default,
upon written request to a Paying Agent, require such Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed. Upon
doing so, the Paying Agent shall have no further liability for the money so paid
over to the Trustee. If the Company or any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, it will, on or before each due
date of any principal of, premium and Liquidated Damages, if any, or interest on
the Securities, segregate and hold in a separate trust fund for the benefit of
the Holders a sum of money sufficient to pay such principal, premium and
Liquidated Damages, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Securities are issuable only in
---------------------
registered form. A Holder may register the transfer of a Security only by
written application to the Registrar stating the name of the proposed transferee
and otherwise complying with the terms of this Indenture. No such registration
of transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Registrar in the Security Register. Prior to the registration of any
transfer by a Holder as provided herein, the Company, the Trustee, and any agent
of the Company or the Trustee shall treat the Person in whose name the Security
is registered as the owner thereof for all purposes whether or not the Security
shall be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary. Furthermore, any Holder of a Global
Security shall, by acceptance of such Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a book
entry system maintained by the Holder of such Global Security (or its agent) and
that ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry. When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount at maturity of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met (including that such
Securities are duly endorsed or accompanied by a written instrument of transfer
in form satisfactory to the Trustee and Registrar duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's
request. No service charge shall be made for any registration of transfer or
exchange or redemption of the Securities, but the Company may require payment of
a sum sufficient to cover any transfer tax assessments or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.11, 3.06 or 9.05). The Registrar shall not be required (i) to issue,
register the transfer of or exchange any Security during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities selected for redemption and ending at the close of
27
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Securities. (a) The
-------------------------------------------
Global Securities initially shall (i) be registered in the name of the
Depositary for such Global Securities or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear the
Global Securities Legend.
Members of, or participants in, the Depositary ("Agent Members") shall have
-------------
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Security, 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
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in Global Securities
may be transferred in accordance with the rules and procedures of the
Depositary. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the Global
Securities, as the case may be, if (i) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for the U.S. Global
Securities or the Offshore Global Securities, as the case may be, and a
successor depositary is not appointed by the Company within 90 days of such
notice, (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depositary or (iii) in accordance with
the rules and procedures of the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount at maturity of such Global Security in an
amount equal to the principal amount at maturity of the beneficial interest in
such Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d) In connection with the transfer of the Global Securities, in whole, to
beneficial owners pursuant to paragraph (b) of this Section 2.07, the Global
Securities shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the Global Securities an equal aggregate principal amount
at maturity of Physical Securities of authorized denominations.
(e) The registered holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through.
28
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
SECTION 2.08. Intentionally Omitted.
---------------------
SECTION 2.09. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall issue and the Trustee shall authenticate a
replacement Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding; provided that the requirements of this Section
--------
2.09 are met. If required by the Trustee or the Company, an indemnity bond must
be furnished that is sufficient in the judgment of both the Trustee and the
Company to protect the Company, the Trustee or any Agent from any loss that any
of them may suffer if a Security is replaced. The Company may charge such
Holder for its expenses and the expenses of the Trustee in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may
pay such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
SECTION 2.10. Outstanding Securities. Securities outstanding at any time
----------------------
are all Securities that have been authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a protected
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the Company)
holds on the maturity date money sufficient to pay Securities payable on that
date, then on and after that date such Securities cease to be outstanding and
interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or one of
its Affiliates holds such Security.
SECTION 2.11. Temporary Securities. Until definitive Securities are ready
--------------------
for delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have insertions, substitutions,
omissions and other variations determined to be appropriate by the Officers
executing the temporary Securities, as evidenced by their execution of such
temporary Securities. If temporary Securities are issued, the Company will
cause definitive Securities to be prepared without unreasonable delay. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.04, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute
and the Trustee shall authenticate
29
and deliver in exchange therefor a like principal amount at maturity of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall be entitled to the same benefits under this Indenture
as definitive Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver to the
------------
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all
Securities surrendered for transfer, exchange, payment or cancellation and shall
destroy them in accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities may
-------------
use "CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the
Company and the Trustee shall use CUSIP, CINS or ISIN numbers, as the case may
be, in notices of redemption or exchange as a convenience to Holders; provided
--------
that any such notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption or exchange and that reliance may be placed only on
the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any change in "CUSIP", "CINS" or "ISIN" numbers
for the Securities.
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment of
------------------
interest on the Securities, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date to
the reasonable satisfaction of the Trustee and shall promptly mail or cause to
be mailed to each Securityholder a notice that states the special record date,
the payment date and the amount of defaulted interest to be paid. The Company
may make payment of any defaulted interest in any other lawful manner not
inconsistent with the requirements (if applicable) of any securities exchange on
which the Securities 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 paragraph, such manner of payment shall be
deemed practicable by the Trustee.
SECTION 2.15. Issuance of Additional Securities. The Company may, subject
---------------------------------
to Section 4.03 of this Indenture and applicable law, issue Additional
Securities under this Indenture. The Initial Securities issued on the first
Issue Date and any Additional Securities subsequently issued shall be treated as
a single class for all purposes under this Indenture.
ARTICLE III
REDEMPTION
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to Section 3.07, it shall notify the Trustee in writing of
the redemption date, the principal amount
30
of Securities to be redeemed and the paragraph of the Securities pursuant to
which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection and Notice. If less than all of the Securities
--------------------
are to be redeemed at any time, selection of Securities for redemption will be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed, on a pro rata basis (among the Securities and
any Additional Securities as one class), by lot or by such method as the Trustee
shall deem fair and appropriate; provided that no Securities in a principal
--------
amount at maturity of $1,000 or less shall be redeemed in part. If any Security
is to be redeemed in part only, the notice of redemption that relates to such
Security shall state the portion of the principal amount thereof to be redeemed.
On and after the redemption date, interest and Liquidated Damages, if any, cease
to accrue on Securities or portions of them called for redemption (or, if such
redemption date is prior to the Full Accretion Date, Accreted Value of the
Securities will cease to accrete).
SECTION 3.03. Notice. Notices of redemption shall be mailed by first
------
class mail at least 30, but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at its registered address. Notices of
redemption may not be conditional. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed, the
certificate numbers and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Company defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the
terms
31
of this Indenture, interest on Securities (or portion thereof) called
for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities called
for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being redeemed; and
(9) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request (which may be revoked at any time in writing prior
to the time at which the Trustee shall have given such notice to the Holders),
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. In such event, the Company shall provide the Trustee with
the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
------------------------------
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest and Liquidated Damages, if
any, to the redemption date; provided that if the redemption date is after a
--------
regular record date and on or prior to the interest payment date, the accrued
interest shall be payable to the Securityholder of the redeemed Securities
registered on the relevant record date. If mailed in the manner herein, the
notice shall be conclusively presumed to have been given whether or not the
Holder receives such notice. Failure to give notice or any defect in the notice
to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New York
---------------------------
City time, on the redemption date, the Company shall deposit with the Paying
Agent (or, if the Company or a Wholly Owned Restricted Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest and Liquidated Damages, if any, on all Securities
to be redeemed on the redemption date other than Securities or portions of
Securities called for redemption that have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
---------------------------
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption. (a) Except as described in Section
-------------------
3.07(b), the Securities will not be redeemable at the Company's option prior to
August 1, 2002. Thereafter, the Securities will be subject to redemption at
any time at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of Accreted Value) set forth below plus in the case of a redemption
after August 1, 2004, accrued and unpaid interest, if any, to the applicable
redemption date (subject to the right of Holders on the relevant record date to
receive interest due on the relevant
32
interest payment date), if redeemed during the twelve-month period beginning on
August 1 of the years indicated below:
Year Percentage
---- ----------
2002.............................................. 106.000%
2003.............................................. 103.000%
2004 and thereafter............................... 100.000%
(b) At any time on or prior to August 1, 2002, the Securities may be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days'
prior notice (but in no event may any such redemption occur more than 90 days
after the occurrence of such Change of Control) mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
Accreted Value thereof (determined at the redemption date) plus the Applicable
Premium thereon, if any, to the redemption date (subject to the right of Holders
on the relevant record date to receive interest due on the relevant interest
payment date).
SECTION 3.08. Intentionally Omitted.
---------------------
SECTION 3.09. Repurchase Offers. (a) In the event that the Company shall
-----------------
be required to commence an offer to all Holders to purchase Securities (a
"Repurchase Offer") pursuant to Section 4.06 hereof (an "Excess Proceeds Offer")
or pursuant to Section 4.08 hereof (a "Change of Control Offer") the Company
shall follow the procedures specified in this Section 3.09:
(i) Within 30 days after (A) a Change of Control (unless (1) the Company is
not required to make such offer pursuant to Section 4.08(c) or (2) all
Securities have been called for redemption pursuant to Section 3.07(a) and
3.07(c) or (B) the Company is required to make an Asset Sale Offer pursuant
to Section 4.06, the Company shall (x) commence a Repurchase Offer, which
shall remain open for a period of at least 20 Business Days following its
commencement (the "Offer Period") and (y) send, by first class mail, a
notice to the Trustee and each of the Holders which shall contain all
instructions and materials necessary to enable such Holders to tender
Securities pursuant to such Repurchase Offer. The notice, which shall
govern the terms of the Repurchase Offer, shall describe the transaction or
transactions that constitute the Change of Control or Asset Sale requiring
an Asset Sale Offer, as the case may be, and shall state:
(A) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Section 4.06 or 4.08, as the case may be, as
applicable;
(B) the principal amount of Securities required to be purchased
pursuant to Section 4.06, in case of an Excess Proceeds Offer, or that
the Company is required to offer to purchase all of the outstanding
principal amount of Securities, in the case of a Change of Control
Offer (such amount, the "Offer Amount"), the purchase price and, that
on the date specified in such notice (the "Purchase Date"), which date
shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed, the Company shall repurchase all
33
Securities validly tendered and not withdrawn pursuant to this Section
3.09 and Section 4.06 or 4.08, as applicable;
(C) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(D) that, unless the Company defaults in making such payment,
Securities accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest after the Purchase Date;
(E) that Holders electing to have a Security purchased pursuant
to a Repurchase Offer may elect to have all or any portion of such
Security purchased;
(F) that Holders electing to have a Security purchased pursuant
to any Repurchase Offer shall be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security, or such other customary documents of
surrender and transfer as the Company may reasonably request, duly
completed, or transfer by book-entry transfer, to the Company, the
Depositary or the Paying Agent at the address specified in the notice
prior to the Purchase Date;
(G) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
delivered for purchase and a statement that such Holder is withdrawing
its election to have such Security purchased;
(H) that, in the case of an Excess Proceeds Offer, if the
aggregate principal amount of Securities surrendered by Holders
thereof exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (based upon the
outstanding principal amount thereof), with such adjustments as may be
deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be
purchased;
(I) that Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered (or transferred by
book-entry transfer); and
(J) the CUSIP number, if any, printed on the Securities being
repurchased and that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Securities.
(ii) On (or at the Company's election, before) the Purchase Date, the
Company shall, (A) to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary in the case of an Excess Proceeds Offer, the
Securities or portions thereof tendered pursuant to the Repurchase Offer
and not theretofore withdrawn,
34
or if Securities aggregating less than the Offer Amount have been tendered,
all Securities tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Securities or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section
3.09, (B) deposit with the Paying Agent an amount equal to the payment
required in respect of all Securities or portions thereof so tendered and
(C) deliver or cause to be delivered to the Trustee the Securities so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Securities or portions thereof being purchased by the
Company. The Company, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to
the Change of Control Payment or the payment due to each respective Holder
in respect of the Excess Proceeds Offer, as applicable, with respect to the
Securities tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Security, and the
Trustee, upon written request from the Company, shall authenticate and mail
or deliver such new Security to such Holder, in a principal amount equal to
any unpurchased portion of the Securities so surrendered, provided that
--------
each such new Security shall be in a principal amount of $1,000 or an
integral multiple thereof. Any Security not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. On the Purchase
Date, all Securities purchased by the Company shall be delivered to the
Trustee for cancellation. All Securities or portions thereof purchased
pursuant to the Repurchase Offer will be canceled by the Trustee. The
Company shall publicly announce the results of the Repurchase Offer on or
as soon as practicable after the Purchase Date, but in no case more than
five Business Days thereafter.
If the Company complies with the provisions of the preceding paragraph, on
and after the Purchase Date interest shall cease to accrue on the Securities or
the portions of Securities repurchased. If a Security is repurchased on or
after an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Security was registered at the close of business on such record date.
If any Security called is not repurchased upon surrender because of the failure
of the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the Purchase Date until such principal is paid, and
to the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Securities and in Section 4.01 hereof.
(b) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws and regulations are applicable in connection with the Repurchase Offer. To
the extent that the provisions of any applicable securities laws or regulations
conflict with provisions of this Section 3.09, the Company shall comply with
such securities laws and regulations and shall not be deemed to have breached
its obligations under this Section by virtue thereof.
(c) Prior to complying with the provisions of this Section 3.09, but in any
event within 90 days following a Change of Control Offer or Asset Sale Offer, as
applicable, the Company shall either repay all outstanding Senior Debt of the
Company or obtain the requisite
35
consents, if any, under all agreements governing outstanding Senior Debt of the
Company to permit the repurchase of Securities required by this Section 3.09 and
Section 4.06 or 4.08, as applicable.
(d) Once notice of repurchase is mailed in accordance with this Section
3.09, all Securities validly tendered and not withdrawn (or, in the case of an
Excess Proceeds Offer, if the Company is not required to repurchase all of such
Securities then the pro rata portion of such Securities that the Company may be
required to purchase pursuant to Section 3.02 and/or 4.06 hereof, as applicable)
become irrevocably due and payable on the Purchase Date at the purchase price
specified herein. A notice of repurchase may not be conditional.
(e) Other than as specifically provided in this Section 3.09 or Section
4.06 or 4.08, as applicable, any purchase pursuant to this Section 3.09 shall be
made pursuant to the provisions of Sections 3.02 and 3.06 hereof.
SECTION 3.10. No Sinking Fund. There shall be no sinking fund for the
---------------
payment of principal on the Securities to the Securityholders.
ARTICLE IV
COVENANTS
---------
SECTION 4.01. Payment of Securities. The Company shall promptly pay the
---------------------
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (but only if other than the Company or a Wholly Owned Restricted
Subsidiary) holds by 11:00 a.m., New York City time, in accordance with this
Indenture available funds sufficient to pay all principal and interest then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Securityholders on that date pursuant to the terms of
this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.02. Reports . Notwithstanding that the Company may not be
-------
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, to the extent permitted by the Exchange Act, the Company
will file with the SEC, and provide within 15 days after the Company is required
to file the same with the SEC, the Trustee and the Holders with the annual
reports and the information, documents and other reports that are specified in
Sections 13 and 15(d) of the Exchange Act. In the event the Company is not
permitted to file such reports, documents and information with the SEC, the
Company will provide substantially similar information to the Trustee and the
Holders, as if the Company were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the
other provisions of TIA (S) 314(a).
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock. (a)
--------------------------------------------------
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, Incur any Debt and the
36
Company and Guarantors shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries that are not Guarantors to issue any
shares of Preferred Stock; provided, however, that the Company and its
-------- -------
Restricted Subsidiaries may Incur Debt or issue shares of Disqualified Stock, if
the Consolidated Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Debt is Incurred or such
Disqualified Stock is issued would have been at least 2.00 to 1.00, determined
on a pro forma basis (including a pro forma application of the net proceeds
--- -----
therefrom), as if the additional Debt had been Incurred, or the Disqualified
Stock had been issued, as the case may be, at the beginning of such four-quarter
period.
(b) The provisions of Section 4.03(a) shall not apply to the Incurrence of
any of the following items of Debt (collectively, "Permitted Debt"):
(i) the Incurrence of term and revolving Debt, letters of credit
(with letters of credit being deemed to have a principal amount equal
to the undrawn face amount thereof) and other Debt under Credit
Facilities (including Guarantees by the Company or any of its
Subsidiaries of synthetic lease drawings and other loans under the
Existing Credit Facility or of other Debt under Credit Facilities);
provided that the aggregate principal amount of such Debt outstanding
--------
pursuant to this clause (i) does not exceed an amount equal to $150.0
million;
(ii) the Incurrence by the Company and its Restricted
Subsidiaries of Existing Debt;
(iii) the Incurrence by the Company of Debt represented by the
Old Notes and the Securities, by the guarantors of the Old Notes
represented by their guarantees of the Old Notes and by the Guarantors
of Debt represented by the Security Guarantees;
(iv) the Incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt;
(v) the Incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net
proceeds of which are used to refund, refinance or replace Debt (other
than intercompany Debt) that was permitted by this Indenture to be
Incurred;
(vi) the Incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Debt or Preferred Stock owed or issued to
and held by the Company and any of its Restricted Subsidiaries,
provided, however, that (X) any such Debt of the Company shall be
-------- -------
subordinated and junior in right of payment to the Securities and (Y)
(A) any subsequent issuance or transfer of Equity Interests or other
action that results in any such Debt or Preferred Stock being held by
a Person other than the Company or a Restricted Subsidiary and (B) any
sale or other transfer of any such Debt or Preferred Stock to a Person
that is neither the Company nor a Restricted Subsidiary shall be
deemed, in each case, to
37
constitute an Incurrence of such Debt or issuance of such Preferred
Stock by the Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (vi);
(vii) the Incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are Incurred (A) principally
for the purpose of fixing or hedging interest rate risk with respect
to any floating rate Debt that is permitted by the terms of this
Indenture to be outstanding or (B) principally for the purpose of
fixing or hedging currency exchange rate risk or commodity price risk
Incurred in the ordinary course of business;
(viii) the guarantee by the Company or any Guarantor of Debt of
the Company or a Restricted Subsidiary of the Company that was
permitted to be Incurred by another provision of this Section 4.03;
(ix) Debt of the Company in respect of Exchange Debentures issued
as payment in kind interest on Exchange Debentures issued upon the
exchange of Exchangeable Preferred Stock, to the extent such interest
payments are made pursuant to the terms of the Exchange Debenture
Indenture; provided the issuance of the Exchange Debentures upon such
exchange was permitted by this covenant at the time of such exchange;
and
(x) the Incurrence by the Company or any of its Restricted
Subsidiaries of additional Debt (which may comprise Debt under the
Existing Credit Facility) in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding pursuant to
this clause (x) not to exceed an amount equal to $20.0 million.
For purposes of determining compliance with this Section 4.03, in the event
that an item of Debt meets the criteria of more than one of the categories of
Permitted Debt described in clauses (i) through (x) above or is entitled to be
Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion,
classify such item of Debt in any manner that complies with this covenant and
such item of Debt will be treated as having been Incurred pursuant to only one
of such clauses or pursuant to Section 4.03(a). Accrual of interest and the
accretion of accreted value will be deemed not to be an Incurrence of Debt for
purposes of this Section 4.03.
SECTION 4.04. Restricted Payments. (a) The Company shall not, and will
-------------------
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution
(including any payment in connection with any merger or consolidation)
on account of the Company's or any of its Restricted Subsidiaries'
Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) and dividends payable
to the Company or any Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation) any Equity
Interests of
38
the Company (or any Restricted Subsidiary held by Persons other than
the Company or any Restricted Subsidiary);
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any
Subordinated Debt of the Company (other than the Old Notes on terms no
more favorable that those contemplated by the Exchange Offer), except
(A) a payment of interest, principal or other related Obligations at
Stated Maturity and (B) the purchase, repurchase or other acquisition
or retirement of Subordinated Debt of the Company in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of purchase,
repurchase or other acquisition or retirement; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time
of, and after giving effect to, such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof,
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
---------
been made at the beginning of the applicable four-quarter period, have been
permitted to Incur at least $1.00 of additional Debt pursuant to the
Consolidated Coverage Ratio test set forth in Section 4.03(a), and
(3) such Restricted Payment, together with (without duplication) the
aggregate amount of all other Restricted Payments made by the Company and
its Restricted Subsidiaries after the Old Issue Date (excluding Restricted
Payments permitted by Section 4.04(b)(ii), Section 4.04(b)(iii)(A), Section
4.04(b)(iv), Section 4.04(b)(v), Section 4.04(b)(vi)(A) and Section
4.04(b)(vii), but including all other Restricted Payments permitted by
Section 4.04(b)), is less than the sum (without duplication) of
(i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
fiscal quarter during which the Old Issue Date occurred to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale (other than to a Subsidiary) of, or
from capital contributions with respect to, Equity Interests of the
Company (other than Disqualified Stock), in either case after the Old
Issue Date, plus
39
(iii) the aggregate principal amount (or accreted value, if
less) of Debt or Disqualified Stock of the Company or any Restricted
Subsidiary issued since the Old Issue Date (other than to a Restricted
Subsidiary) that has been converted into Equity Interests (other than
Disqualified Stock) of the Company, plus
(iv) 100% of the aggregate net cash received by the Company or a
Restricted Subsidiary of the Company since the Old Issue Date from (A)
Restricted Investments, whether through interest payments, principal
payments, dividends or other distributions or payments, or the sale or
other disposition (other than to the Company or a Restricted
Subsidiary) thereof made by the Company and its Restricted
Subsidiaries and (B) a cash dividend from, or the sale (other than to
the Company or a Restricted Subsidiary) of the stock of, an
Unrestricted Subsidiary, plus
(v) upon the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the fair market value of the Investments of the
Company and its Restricted Subsidiaries (other than such Subsidiary)
in such Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
have complied with the provisions of this Section 4.04;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Equity Interests or Subordinated Debt in exchange
for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, other
Equity Interests (other than any Disqualified Stock) of, or a capital
contribution to, the Company (including the conversion of New
Preferred Stock into common stock of the Company); provided that the
--------
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from Section 4.04(a)(iv)(3)(ii);
(iii) the redemption, repurchase, retirement, defeasance or
other acquisition of (A) Subordinated Debt made by an exchange for, or
with the net cash proceeds from an Incurrence of, Permitted
Refinancing Debt or (B) Subordinated Debt (including Exchange
Debentures) or Preferred Equity Interests (other than Subordinated
Debt or Preferred Equity Interests held by Affiliates of the Issuer)
upon a Change of Control or Asset Sale to the extent required by the
agreement governing such Subordinated Debt or the certificate of
designation governing such Preferred Equity Interests, as the case may
be, but only (x) if the Company shall have complied with Section 4.06
or 4.08, as the case may be, and repurchased all Securities tendered
pursuant to the offer required by such covenants prior to purchasing
or repaying such Subordinated Debt or Preferred Equity Interests, as
the case may be, (y) in the case of an Asset Sale, to the extent
40
of the remaining Excess Proceeds offered to Holders pursuant to the
Asset Sale Offer and (z) within six months after the date such offer
is consummated;
(iv) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its common Equity Interests on a pro
rata basis;
(v) to the extent constituting Restricted Payments, the Specified
Affiliate Payments;
(vi) the payment of any regular quarterly dividends in respect of
the Exchangeable Preferred Stock in the form of additional shares of
Exchangeable Preferred Stock having the terms and conditions set forth
in the Certificate of Designation for the relevant Exchangeable
Preferred Stock as in effect on the first Issue Date;
(vii) the exchange of Exchangeable Preferred Stock for Exchange
Debentures in accordance with the terms of the Certificate of
Designation for such Exchangeable Preferred Stock as in effect on the
first Issue Date, provided that such exchange is permitted by
--------
Article 4; and
(viii) payments in an aggregate amount not to exceed $10.0
million, provided that such payments (A) do not constitute Restricted
Payments to purchase, redeem, defease or otherwise acquire or retire
for value, (I) any Old Notes or (II) any Subordinated Debt or
Preferred Equity Interests held by Affiliates of the Issuer and (B)
are not of the kind specified in clause (i) of the definition of
"Specified Affiliate Payments."
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default or an
Event of 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, to the extent they do not
constitute Permitted Investments at the time such Subsidiary became an
Unrestricted Subsidiary, will be deemed to be Restricted Payments made at the
time of such designation. The amount of such outstanding Investments will be
equal to the portion of the fair market value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary that is represented by the interest of the Company and
its Restricted Subsidiaries in such Subsidiary, in each case as determined in
good faith by the Board of Directors of the Company. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any noncash Restricted Payment shall be determined in good faith
by the Board of Directors of the Company.
41
In making the computations required by this covenant, (i) the Company or
the relevant Restricted Subsidiary may use audited financial statements for the
portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (ii) the Company or the relevant
Restricted Subsidiary will be permitted to rely in good faith on the financial
statements and other financial data derived from the books and records of the
Company and the Restricted Subsidiary that are available on the date of
determination. If the Company makes a Restricted Payment that, at the time of
the making of such Restricted Payment, would, in the good faith determination of
the Company or any Restricted Subsidiary, be permitted under the requirements of
this Indenture, such Restricted Payment will be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's or any Restricted Subsidiary's financial
statements affecting Consolidated Net Income of the Company for any period.
For the avoidance of doubt, it is expressly agreed that no payment or other
transaction permitted by Sections 4.07(b)(3), 4.07(b)(4) and 4.07(b)(5) shall be
considered a Restricted Payment for purposes of, or otherwise restricted by,
this Indenture.
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Restricted
------------------------------------------------------------
Subsidiaries. The Company shall not, and shall not permit any of its Restricted
------------
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any Debt owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of:
(1) Existing Debt,
(2) this Indenture, the Securities, the Additional Securities, the
Exchangeable Preferred Stock and any Additional Exchangeable Preferred
Stock (as defined in the Certificate of Designation for the Exchangeable
Preferred Stock), the Exchange Debentures or the Exchange Debenture
Indenture and any other agreement entered into after the first Issue Date,
provided that the encumbrances or restrictions in such agreements are not
--------
materially more restrictive than those contained in the foregoing
agreements,
(3) any agreement or other instrument of a Person acquired by the Company
or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (but not created in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired,
42
(4) purchase money obligations (including Capital Lease Obligations) for
property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property
so acquired,
(5) in the case of clause (iii) above, 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, (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 this Indenture or
(3) contained in security agreements or mortgages securing Debt to the
extent such encumbrance or restriction restricts the transfer of the
property subject to such security agreements or mortgages,
(6) contracts for the sale of assets, including any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Restricted Subsidiary pending the closing of such
sale or disposition,
(7) contractual encumbrances or restrictions in effect on the Old Issue
Date , including pursuant to the Existing Credit Facility and its related
documentation,
(8) restrictions on cash or other deposits or net worth imposed by leases,
credit agreements or other agreements entered into in the ordinary course
of business,
(9) customary provisions in joint venture agreements and other similar
agreements,
(10) any encumbrances or restrictions created with respect to (i) Debt of
Guarantors permitted to be Incurred subsequent to the first Issue Date
pursuant to Section 4.03 and (ii) Debt of Subsidiary Non-Guarantors
permitted to be Incurred subsequent to the first Issue Date pursuant to
Section 4.03 or operating leases, provided that in the case of this
--------
clause (ii) the Board of Directors of the Company determines (as evidenced
by a Board Resolution of the Board of Directors) in good faith at the time
such encumbrances or restrictions are created that such encumbrances or
restrictions would not reasonably be expected to impair the ability of the
Company to make payments of interest, Liquidated Damages (if any) and
scheduled payments of principal on the Securities, in each case as and when
due; and
(11) any encumbrances or restrictions of the type referred to in clauses
(1), (2) and (3) above imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in
clauses (1) through (10), provided that such amendments, modifications,
--------
restatements, renewals, increases, supplements, refundings, replacements or
refinancings, taken as a whole, are, in the good faith judgment of the
Company, not materially more restrictive with
43
respect to such encumbrances or restrictions than those contained in the
contracts, instruments or obligations prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
SECTION 4.06. Asset Sales. The Company shall not, and shall not permit
-----------
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of
and (ii) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents; provided
--------
that the amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Securities or, in the case of liabilities of a Guarantor,
the Security Guarantee of such Guarantor) that are assumed by the transferee of
any such assets, or from which the Company and its Restricted Subsidiaries are
released in writing by the creditor with respect thereto, and (y) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash (to the extent of the cash received) within
180 days after receipt shall be deemed, in each case, to be cash for purposes of
this provision; provided, further, however, that this clause (ii) shall not
-------- ------- -------
apply to any sale of Equity Interests of or other Investments in Unrestricted
Subsidiaries.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay Senior
Debt, Debt of any Restricted Subsidiary or Pari Passu Debt (other than Debt owed
to the Company or a Subsidiary of the Company, and provided that if the Company
--------
shall so reduce Pari Passu Debt, it will equally and ratably make an Asset Sale
Offer (in accordance with the procedures set forth in Section 3.09 for an Asset
Sale Offer) to all Holders), (b) to invest in properties and assets that will be
used or useful in the business of the Company or any of its Subsidiaries or (c)
to the acquisition of a controlling interest in another business, the making of
a capital expenditure or the acquisition of other assets, in each case, that
will be used or useful in the business of the Company or any of its Restricted
Subsidiaries; provided that if during such 360-day period the Company or a
--------
Restricted Subsidiary enters into a definitive agreement committing it to apply
such Net Proceeds in accordance with the requirements of clause (b) or (c) such
360-day period will be extended for a period not to exceed 180 days with respect
to the amount of Net Proceeds so committed until required to be paid in
accordance with such agreement (or, if earlier, until termination of such
agreement). Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds (including
Excess Proceeds under the Old Indenture) exceeds $10 million, the Company shall
(i) make an offer to all Holders of Securities, and (ii) prepay, purchase or
redeem (or make an offer to do so) any other Pari Passu Debt of the Company in
accordance with provisions requiring the Company to prepay, purchase or redeem
such Debt with the proceeds from any Asset Sales (or offer to do so), pro rata
in proportion to the respective principal amounts (or accreted value, as
applicable) of the Securities and such other Debt required to be prepaid,
purchased or redeemed or tendered for, in the case of the Securities pursuant to
such offer (an "Asset Sale Offer"), to purchase the maximum principal amount of
Securities that may be purchased out of such pro rata portion of the Excess
Proceeds, at an offer
44
price in cash in an amount equal to 100% of their principal amount plus accrued
and unpaid interest and Liquidated Damages (or, if prior to the Full Accretion
Date, 100% of the Accreted Value thereof on the date of purchase, plus
Liquidated Damages (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, in accordance with the procedures set forth in Section 3.09). To
the extent that the aggregate principal amount (or, if prior to the Full
Accretion Date, the aggregate Accreted Value) of Securities and Pari Passu Debt
tendered pursuant to an Asset Sale Offer or other offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount (or Accreted Value, as the
case may be) of Securities surrendered by Holders thereof exceeds the pro rata
portion of such Excess Proceeds to be used to purchase Securities, the Trustee
shall select the Securities to be purchased on a pro rata basis. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.07. Transactions with Affiliates . (a) The Company shall not,
----------------------------
and shall not permit any of its Restricted Subsidiaries to, make any payment to,
or sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless:
(i) such Affiliate Transaction is on terms that, taken as a whole, are no
less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction entered into after the first Issue Date involving aggregate
consideration in excess of $3.0 million, a Board Resolution certifying that
such Affiliate Transaction complies with clause (i) above and that such
Affiliate Transaction has been approved by a majority of the members of the
Board of Directors and (b) with respect to any Affiliate Transaction
involving aggregate consideration in excess of $10.0 million, an opinion as
to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an investment banking, appraisal or
accounting firm of national standing.
(b) The provisions of Section 4.07(a) shall not prohibit (and, the
following shall not be deemed to be Affiliate Transactions):
(1) transactions between or among the Company and/or its Restricted
Subsidiaries;
(2) Permitted Investments and Restricted Payments that are permitted
by Section 4.04;
45
(3) employment agreements, employee benefit plans and related
arrangements entered into in the ordinary course of business and all
payments and other transactions contemplated thereby;
(4) any payments to Investcorp and its Affiliates (whether or not such
Persons are Affiliates of the Company) (A) for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, which relate solely to transactions actually
consummated by the Company or any of its Subsidiaries, including in
connection with acquisitions or divestitures, which payments are approved
by the Board of Directors of the Company in good faith, provided that the
amount of such payments under this clause (A) in any year in respect of one
or more transactions under the Threshold (as herein defined) shall not
exceed $2.0 million and (B) of annual management, consulting and advisory
fees and related expenses, which payments are made after August 1, 2003,
except to the extent such fees under this clause (B) exceed $750,000 in
any 12-month period; for the purposes of the foregoing clause (A), the term
"Threshold" means, in respect of any transaction described therein that is
(x) an acquisition or divestiture effected by the Company or any of its
Subsidiaries of any business, enterprise or line of business, $15.0 million
measured by reference to the value ascribed to such business, enterprise or
line of business in such transaction, or (y) an Investment by or in the
Issuer or any of its Subsidiaries, $15.0 million measured by reference to
the amount actually invested;
(5) any agreement in effect on the Old Issue Date (including the
Recapitalization Agreement, the Services Agreement (as amended on April 15,
1998) between the Berkshire Companies Limited Partnership and the Company
and the Brevard lease agreement) or any amendment thereto (so long as any
such amendment is not disadvantageous to the Holders in any material
respect) or any payment or other transaction contemplated by any of the
foregoing; and
(6) Debt permitted by Section 4.03(b)(x) to the extent such Debt is on
terms that, taken as a whole, are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction with an unrelated Person.
SECTION 4.08. Change of Control . (a) Upon the occurrence of a Change of
-----------------
Control, unless all Securities have been called for redemption pursuant to the
provisions in Section 3.07, each Holder of Securities shall have the right to
require the Company to repurchase all or any part (equal to a principal amount
at maturity of $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to a Change of Control Offer made pursuant to Section 3.09
at an offer price in cash (the "Change of Control Payment") equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (or, if such Change
of Control Offer occurs prior to the Full Accretion Date, 101% of the Accreted
Value thereof on the date of repurchase plus Liquidated Damages thereon, if
any).
(b) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes and consummates a Change of
Control Offer.
46
SECTION 4.09. Compliance Certificate. The Company and each Guarantor
----------------------
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they would
normally have knowledge of any Default or Event of Default and whether or not
the signers know of any Default or Event of Default that occurred during such
period. If they do have such knowledge, the certificate shall describe the
Default or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.
SECTION 4.10. Liens. The Company shall not, and shall not permit any of
------
its Restricted Subsidiaries to, create, Incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Debt or trade
payables (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired, unless all payments due under this Indenture and
the Securities are secured on an equal and ratable basis with the obligations so
secured until such time as such obligations are no longer secured by a Lien;
provided that (i) if such other Debt constitutes Subordinated Debt or is
--------
otherwise subordinate or junior in right of payment to the Obligations under
this Indenture, the Securities or any Security Guarantee, as the case may be,
such Lien is expressly made prior and senior in priority to the Lien securing
such other Debt, or (ii) in any other case, such Lien ranks equally and ratably
with or prior to the Lien securing the other Debt or obligations so secured.
SECTION 4.11. Additional Security Guarantees. All future Subsidiaries of
------------------------------
the Company who guarantee any Debt of the Company under the Existing Credit
Facility, other than Subsidiaries that have been properly designated as
Unrestricted Subsidiaries in accordance with this Indenture for so long as they
continue to constitute Unrestricted Subsidiaries, shall be Guarantors in
accordance with the terms of this Indenture until released from such Guarantee
of the Existing Credit Facility.
Each future Security Guarantee shall be limited to an amount not to exceed
the maximum amount that can be Guaranteed by that Subsidiary without rendering
the Security Guarantee, as it relates to such Subsidiary, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally. Each future Security
Guarantee shall be subordinated to Senior Debt of the respective Guarantor on
the same basis and to the same extent as the Securities are subordinated to
Senior Debt of the Company.
SECTION 4.12. Restriction on Senior Subordinated Debt. The Company shall
---------------------------------------
not Incur any Debt that is expressly subordinate in right of payment to any
Senior Debt and senior in any respect in right of payment to the Securities and
no Guarantor shall Incur any Debt that is expressly subordinate in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Security Guarantee of such Guarantor.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All
---------------------------------------------------------
Assets of the Company. The Company shall not consolidate or merge with or into
---------------------
(whether or not the
47
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless:
(i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made
assumes all the obligations of the Company under the Securities and this
Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists;
(iv) except in the case of a merger of the Company with or into a Wholly
Owned Restricted Subsidiary of the Company, the Company or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made shall, at the time of such
transaction and after giving pro forma effect thereto as if such
---------
transaction had occurred at the beginning of the applicable four-quarter
period, either (x) be permitted to Incur at least $1.00 of additional Debt
pursuant to the Consolidated Coverage Ratio test set forth in Section
4.03(a) or (y) have a Consolidated Coverage Ratio at least equal to the
Consolidated Coverage Ratio of the Company for such four-quarter reference
period; and
(v) the Company or the surviving corporation, as the case may be, shall
have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to
such transaction have been satisfied.
Notwithstanding the foregoing clauses (iii) and (iv) above, (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company and (b) the Company may merge with
an Affiliate incorporated solely for the purpose of reincorporating the Company
in another jurisdiction.
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All
---------------------------------------------------------
Assets of a Guarantor. No Guarantor may consolidate with or merge with or into
---------------------
(whether or not such Guarantor is the surviving Person) another Person (other
than the Company or another Guarantor) unless (i) subject to the provisions of
Section 11.02(b), the Person formed by or
48
surviving any such consolidation or merger (if other than such Guarantor),
assumes all the obligations of such Guarantor under the Securities and this
Indenture pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, and (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists.
Notwithstanding the foregoing clause (ii), (a) any Restricted Subsidiary
may consolidate with, merge into or transfer all or part of its properties and
assets to any Guarantor and (b) any Guarantor may merge with an Affiliate
incorporated solely for the purpose of reincorporating such Guarantor in another
jurisdiction.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default and Remedies.
------------------------------
Each of the following constitutes an Event of Default with respect to the
Securities if:
(1) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Securities (whether
or not prohibited by the provisions of Article X);
(2) the Company defaults in payment when due of the principal of or
premium, if any, on the Securities (whether or not prohibited by the
provisions of Article X);
(3) the Company fails for 30 days after receipt of a Notice of Default
to comply with the provisions in Sections 4.03, 4.04, 4.06, 4.08 and 5.01;
(4) the Company fails for 60 days after receipt of a Notice of Default
specifying such failure to comply with any of its other agreements in this
Indenture or the Securities;
(5) the Company or any Restricted Subsidiary that is a Significant
Subsidiary fails to pay any Debt within any applicable grace period after
final maturity or acceleration by the holders thereof because of a default
if the total amount of such Debt unpaid or accelerated at the time exceeds
$15.0 million;
(6) any judgment or decree for the payment of money in excess of $15.0
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) shall be entered against the Company or any Significant
Subsidiary that is a Restricted Subsidiary and is not discharged, waived or
stayed and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (B) there shall be a period of 90
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed;
49
(7) except as permitted by this Indenture, any Security Guarantee by a
Guarantor that is a Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to
be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Security Guarantee;
(8) the Company or any Restricted Subsidiary that is a 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
(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or for any substantial
part of its property; or
(C) orders the winding-up or liquidation of the Company or any
Restricted Subsidiary that is a Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree relating thereto remains unstayed and in effect for 60 days:
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
------------------
similar federal or state law for the relief of debtors. For purposes of this
Section, the term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (3) or (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities notify the Company (and the Trustee, in the case of
notices to the Company by Holders) in writing by
50
registered or certified mail, return receipt requested, of the Default and the
Company does not cure such Default within the time specified in clauses (3) or
(4) 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, forthwith upon any Senior Officer
obtaining actual knowledge of any Default, written notice in the form of an
Officers' Certificate of any Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If any Event of Default occurs and is
------------
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in principal amount of the then outstanding Securities by notice to the Company
and the Trustee may declare all the Securities to be due and payable. Upon such
a declaration, such amounts shall be due and payable immediately; provided,
--------
however, that if upon such declaration there are any amounts outstanding under
-------
the Existing Credit Facility and the amounts thereunder have not been
accelerated, such amounts shall be due and payable upon the earlier of the time
such amounts are accelerated or five Business Days after receipt by the Company
and the Representative of the lenders under the Existing Credit Facility of such
declaration. Notwithstanding the foregoing, in the case of an Event of Default
under clause (8) or (9) with respect to the Company, all outstanding Securities
will become due and payable without further action or notice. The Holders of a
majority in aggregate principal amount of the Securities by written notice to
the Trustee may, on behalf of all the Holders, rescind an acceleration and its
consequences if the recession would not conflict with any judgment or decree and
if all existing Defaults or Events of Default have been cured or waived except
nonpayment of principal or interest that has become due because of such
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative (to the
extent permitted by law).
SECTION 6.04. Waiver of Past Defaults . The Holders of a majority in
-----------------------
aggregate principal amount of the Securities then outstanding by written notice
to the Trustee may on behalf of the Holders of all of the Securities waive any
existing Default or Event of Default and its consequences except (i) a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Securities or (ii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured and ceases to exist and
any Event of Default arising therefrom shall be deemed to have been cured and
waived for every purpose under this
51
Indenture, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
SECTION 6.05. Control by Majority . The Holders of a majority in
-------------------
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee by this Indenture.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
-------- -------
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
--------------------
receive payment of principal, premium (if any), interest or Liquidated Damages
when due, a Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) such Holder has previously given the Trustee written notice that an
Event of Default is continuing;
(2) Holders of at least 25% in principal amount at maturity of the
outstanding Securities have requested the Trustee to pursue the remedy;
(3) such Holder has offered the Trustee reasonable security or indemnity
against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60 days after the
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount at maturity of the
outstanding Securities have not given the Trustee a direction inconsistent
with such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
principal of and Liquidated Damages and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee . If an Event of Default
--------------------------
specified in Section 6.01(a)(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and
52
owing (together with interest on any unpaid interest to the extent lawful) and
the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim . The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
any Guarantor, their creditors or their property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders in any election of
a trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or property
----------
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent required by Article X;
THIRD: to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, and any Liquidated Damages without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, any Liquidated Damages and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs . In any suit for the enforcement of
---------------------
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor
--------------------------------
any Guarantor (to the extent they may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that they may
53
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VII
TRUSTEE
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred
-----------------
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
54
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise Incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that the Trustee's conduct does not
-------- -------
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to
do so by the Holders of not less than a majority in principal amount of the
Securities at the time outstanding, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney.
(g) The Trustee shall not be required to give any note, bond or surety in
respect of the execution of the trusts and powers under this Indenture.
55
(h) The permissive rights of the Trustee to take any action enumerated in
this Indenture shall not be construed as a duty to take such action.
(i) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction
of any of the Holders pursuant to the provisions of this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(j) The Trustee shall not be charged with knowledge of any Default or Event
of Default, of the identity of any Restricted Subsidiary or the existence
of any Change of Control or Asset Sale unless either (i) a Trust Officer
shall have received notice thereof or (ii) the Trustee shall have received
written notice thereof from the Company or any Holder.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual
----------------------------
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-
paying agent may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible
--------------------
for and makes no representation as to the validity or adequacy of this
Indenture, any Subsidiary Guarantee or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing
------------------
and is known to the Trustee, the Trustee shall mail to each Holder notice of the
Default within the earlier of 90 days after it occurs or 30 days after it is
known to a Trust Officer or written notice of it is received by the Trustee.
Except in the case of a Default in the payment of principal of, premium (if
any), interest or Liquidated Damages on any Security, the Trustee may withhold
notice if and so long as a committee of its trust officers in good faith
determines that withholding notice is in the interests of Securityholders.
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, except in the case of an Event of Default under Section 6.01(a) and
(b) hereof (provided that the Trustee is Paying Agent), unless and until a Trust
Officer receives written notice thereof at its Corporate Trust Office specified
in Section 13.02, from the Company or a Holder that such Default or Event of
Default has occurred.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit
-----------------------------
to the Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the TIA at the times and in the manner
provided pursuant thereto. To the extent that any such report is required by
the TIA with respect to any 12-month period, such report shall cover the 12-
month period ending December 31 and shall be transmitted by the next succeeding
March 1.
56
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
--------------------------
Trustee from time to time such compensation as is agreed to in writing by the
Trustee and Company for the Trustee's services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket disbursements, advances and expenses Incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, jointly but not severally, shall
indemnify the Trustee and its officers, directors, shareholders, agents and
employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, liability or expense (including reasonable
attorneys' fees) Incurred by them without negligence or bad faith on their part
arising out of or in connection with the acceptance or administration of this
Indenture or the Securities and the performance of their duties hereunder,
including the cost and expense of enforcing this Indenture against the Company
or any Guarantor (including this Section 7.07), and defending itself against any
claim (whether asserted by a Holder or any other person). The Trustee and its
officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided that any failure so to notify the Company shall not relieve
--------
the Company or any Guarantor of its indemnity obligations hereunder. The
Company shall defend the claim and the Indemnified Party shall provide
reasonable cooperation at the Company's expense in the defense. Such
Indemnified Parties may have separate counsel and the Company shall pay the fees
and expenses of such counsel; provided that the Company shall not be required to
--------
pay such fees and expenses if it assumes such Indemnified Parties' defense and,
in such Indemnified Parties' reasonable judgment, there is no conflict of
interest between the Company and such parties in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense Incurred by an Indemnified Party through such party's own
willful misconduct, negligence or bad faith. The Company need not pay any
settlement made without its consent (which consent shall not be unreasonably
withheld).
To secure the Company's payment obligations in this Section and all other
obligations to the Trustee pursuant to this Indenture, including all fees,
expenses and rights to indemnification, the Trustee shall have a lien on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest and any Liquidated Damages on
particular Securities. Such lien shall survive the satisfaction and discharge
of this Indenture and the resignation or removal of the Trustee. The Trustee's
right to receive payment of any amounts due under this Indenture shall not be
subordinated to any other indebtedness of the Company and the Securities shall
be subordinate to the Trustee's rights to receive such payment.
57
The Company's payment obligations pursuant to this Section shall survive
the satisfaction or discharge of this Indenture, any rejection or termination of
this Indenture under any Bankruptcy Law or the resignation or removal of the
Trustee. When the Trustee Incurs expenses after the occurrence of a Default
specified in Section 6.01(a)(8) or (9) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time
----------------------
by so notifying the Company in writing. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
the Company in writing and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not, within a
reasonably prompt period, appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
---------------------------
with, merges or converts into, or transfers all or substantially all of its
corporate trust business or assets to,
58
another corporation or banking association, the resulting, surviving or
transferee corporation, without any further act, shall be the successor Trustee,
provided that such Person shall be qualified and eligible under this Article
--------
VII.
In case at the time such successor or successors, by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
-----------------------------
times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
-------- -------
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Legal Defeasance and Covenant Defeasance. (a) The Company
----------------------------------------
may, at the option of its Board of Directors evidenced by a Board Resolution, at
any time, elect to have either Section 8.01(b) or 8.01(c) hereof be applied to
all outstanding Securities upon compliance with the conditions set forth below
in this Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) hereof of the option
applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Securities and any Security Guarantee on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and each Guarantor shall be deemed to
have paid and discharged the entire Debt represented by the outstanding
Securities and any Security Guarantee, which Securities and Security Guarantees
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.03 hereof and the other Sections of this Indenture referred to in clauses (i)
and (ii) below, and to have satisfied all their other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the
59
Company, shall execute proper instruments acknowledging the same), except for
the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive, solely from the trust fund described in Article VIII hereof, as more
fully set forth in such Article, payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Securities
when such payments are due, (ii) the Company's obligations with respect to the
Securities under Sections 2.04, 2.06 and 2.09 and the rights, powers, trusts,
duties and immunities of the Trustee, and (iii) the Company's obligations in
connection therewith and this Article VIII. Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.01(b)
notwithstanding the prior exercise of its option under Section 8.01(c) hereof.
(c) Upon the Company's exercise under Section 8.01(a) hereof of the option
applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 5.01(iv) hereof with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration of act of Holders (and the consequences of any
thereof) in connection with such Sections, but shall continue to be deemed
"outstanding" for all the other purposes hereunder (it being understood that
such Securities and the related Security Guarantees shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to any term, condition or limitation set forth in any
such Section, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section 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
6.01 hereof, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.01(a) hereof of the option applicable to this Section
8.01(c) hereof, subject to the satisfaction of the conditions set forth in
Section 8.02, Sections 6.01(4), 6.01(5) (with respect to compliance with Section
4.09 only), 6.01(6), 6.01(7) (with respect to Subsidiaries of the Company only),
6.01(8) (with respect to Subsidiaries of the Company only), 6.01(9) and 6.01(10)
shall not constitute Events of Default.
SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following
------------------------------------------
shall be the conditions to the application of either Section 8.01(b) or 8.01(c)
hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or the Guarantors must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Securities cash in
U.S. dollars, Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, and interest and Liquidated Damages on the outstanding Securities
on the stated maturity or on the applicable redemption date, as the case
may be, and the Company and the Guarantors must
60
specify whether the Securities are being defeased to maturity or to a
particular redemption date;
(b) in the case of Legal Defeasance, the Company or the Guarantors 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, (1) the Company and the Guarantors have
received from, or there has been published by, the Internal Revenue Service
a ruling or (2) since the Old Issue Date, there has been a change in the
applicable federal income tax law, in either case to the effect that, and,
based thereon, such Opinion of Counsel shall confirm that, subject to
customary assumptions and exclusions, the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of Covenant Defeasance, the Company or the Guarantors 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 Securities will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing);
(e) such Legal Defeasance or Covenant Defeasance will 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 of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company or the Guarantors must have delivered to the Trustee an
Opinion of Counsel, subject to customary assumptions and exclusions, to the
effect that after the 91st day following the deposit, the trust funds will
not be part of any "estate" formed by the bankruptcy or reorganization of
the Company or subject to the "automatic stay" under the Bankruptcy Code or
recoverable as a preferential transfer in a bankruptcy case of the Company
or, in the case of Covenant Defeasance, will be subject to a first priority
Lien in favor of the Trustee for the benefit of the Holders;
(g) the Company or the Guarantors must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company or the
61
Guarantors with the intent of preferring the Holders of Securities over the
other creditors of the Company or the Guarantors, as applicable, with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or the Guarantors, as applicable, or others; and
(h) the Company must deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel (which opinion of counsel may be subject to customary
assumptions and exclusions), each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
SECTION 8.03. Deposited Money and Government Securities to Be Held in
-------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to Section 8.04 hereof, all
-------------------------------------
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.03, the "Trustee") pursuant to Section 8.02 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium and Liquidated Damages if any, and interest but such money need not be
segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time, upon the request of the
Company, any money or Government Obligations held by it as provided in Section
8.02 hereof that, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.02(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Repayment to Company. 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, premium and Liquidated Damages, if any, or interest on any
Security and remaining unclaimed for two years after such principal, premium and
Liquidated Damages, if any, or interest has become due and payable shall be paid
to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security 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, may, at the expense of the Company, cause
to be published once, in the Wall Street Journal (national edition), 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 notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any United States dollars or Government Obligations in accordance with
this Article VIII by reason of any order or judgment of any court or
governmental authority enjoining, restraining or
62
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities and the Guarantors obligations under this
Indenture and the Security Guarantees shall be revived and reinstated as though
no deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
this Article VIII; provided, however, that if the Company or any Guarantor makes
-------- -------
any payment of principal of, premium and Liquidated Damages, if any, or interest
on any Security following the reinstatement of its obligations, the Company or
any Guarantor, as the case may be, shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money held by the
Trustee or Paying Agent.
SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request
---------------------------------------
of the Company, this Indenture will cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Securities, as
expressly provided for herein or pursuant hereto), the Company and the
Guarantors will be discharged from their obligations under the Securities and
Security Guarantees and the Trustee, at the expense of the Company, will execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
the Securities and the Security Guarantees when:
(a) either (i) all the Securities theretofore authenticated and delivered
(other than mutilated, destroyed, lost or stolen Securities that have been
replaced or paid and Securities that have been subject to defeasance under
this Article VIII) have been delivered to the Trustee for cancellation or
(ii) all Securities not theretofore delivered to the Trustee for
cancellation (A) have become due and payable, (B) shall become due and
payable at maturity within one year or (C) 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 the expense,
of the Company, and the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in trust for the purpose in an amount
sufficient to pay and discharge the entire Debt on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium and Liquidated Damages, if any, on) and interest on the Securities
to the date of such deposit (in case of Securities that have become due and
payable) or to the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable under this
Indenture by this Company; or
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided
in this Indenture relating to the satisfaction and discharge of this
Indenture, the security agreements relating thereto, the Securities and the
Security Guarantees have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section,
the obligations of the Trustee under Section 8.06 and Section 2.04 shall
survive.
63
ARTICLE IX
AMENDMENTS
----------
SECTION 9.01. Without Consent of Holders. Notwithstanding Section 9.02,
--------------------------
the Company and the Trustee may amend or supplement this Indenture, the
Securities, the Security Guarantees or the Pledge Agreement without notice to or
the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in place of
certificated Securities (provided that the uncertificated Securities are
--------
issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code);
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Securities in the case of a merger, consolidation
or sale of assets;
(4) to release any Security Guarantee or collateral in accordance with the
provisions of this Indenture or the Pledge Agreement;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights or benefits
to the Holders of Securities or that, as determined by the Board of
Directors in good faith, does not have a material adverse effect on the
legal rights under this Indenture of any such Holder;
(7) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
(8) to make any change to Article II, Section 4.01 or the Exhibits hereto
that applies only to Additional Securities (other than a change relating to
other provisions of this Indenture incorporated or referenced in Article
II, Section 4.01 or any such Exhibit).
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
64
SECTION 9.02. With Consent of Holders. Except as provided in this Section
-----------------------
9.02 and Section 9.01, this Indenture, the Securities, the Security Guarantees
and the Pledge Agreement may be amended or supplemented without notice to any
Securityholders but with the consent of the Holders of at least a majority in
principal amount at maturity of the Securities then outstanding (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Securities), and any existing default or noncompliance with any
provision of this Indenture or the Securities may be waived with the consent of
the Holders of a majority in principal amount at maturity of the then
outstanding Securities (including consents obtained in connection with a tender
offer or exchange offer for Securities). However, without the consent of each
Holder affected thereby, an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder):
(i) reduce the principal amount at maturity of Securities whose Holders
must consent to an amendment, supplement or waiver,
(ii) reduce the principal of, change the fixed maturity of any Security,
reduce any premium payable upon optional redemption of the Securities or
otherwise alter the provisions with respect to the redemption or repurchase
of the Securities (other than provisions relating to the covenants
described in Sections 3.09, 4.06 and 4.08,
(iii) reduce the rate of or change the time for payment of interest on any
Security, or reduce the rate of accretion on the Accreted Value or extend
the period during which no interest accrues on the Securities,
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the payment
default that resulted from such acceleration),
(v) make any Security payable in money other than that stated in the
Securities,
(vi) impair the rights of Holders of the Securities to receive payments of
principal of or premium, if any, on the Securities,
(vii) make any change to Section 6.04 or 6.07 or this 9.02, or
(viii) except as permitted by this Indenture, release any Security
Guarantee or any collateral under the Pledge Agreement.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to
65
all Securityholders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to
---------------------------------------------
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives written notice of revocation
before the date the amendment or waiver becomes effective. After an amendment
or waiver becomes effective, it shall bind every Securityholder. Except if
otherwise specified in such amendment or waiver, an amendment or waiver becomes
effective once the requisite number of consents are received by the Company or
the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture that such amendment is
the legal, valid and binding obligation of the Company and the Guarantors
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
66
ARTICLE X
SUBORDINATION
SECTION 10.01. Agreement To Subordinate. The Company agrees, and each
------------------------
Securityholder by accepting a Security agrees, that the Debt evidenced by the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article X, to the prior payment in full in cash or Cash
Equivalents of all existing and future Senior Debt of the Company and that the
subordination is for the benefit of and enforceable by the holders of Senior
Debt of the Company. The Securities shall rank pari passu in right of payment
----------
with all existing and future Pari Passu Debt of the Company and shall be senior
in right of payment to all existing and future Subordinated Debt of the Company.
The Securities shall also be effectively subordinated to any Secured Debt of the
Company to the extent of the value of the assets securing such Debt. However,
payment from the money or the proceeds of Government Securities held in any
defeasance trust described in Article VIII is not subordinated to any Senior
Debt or subject to the restrictions described in this Section 10.01, so long as
the payments into the defeasance trust were not prohibited pursuant to the
subordination provisions described at the time when so paid. For purposes of
these subordination provisions, the Debt evidenced by the Securities is deemed
to include the Liquidated Damages payable pursuant to the provisions set forth
in the Securities and the applicable Registration Rights Agreement. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
------------------------------------
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, an assignment for the
benefit of creditors or any marshaling of the Company's assets and liabilities,
the holders of Senior Debt of the Company shall be entitled to receive payment
in full, in cash or Cash Equivalents, of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt, whether or not allowed or
allowable in such proceeding) before the Holders of Securities will be entitled
to receive any payment with respect to the Securities, and until all Obligations
with respect to such Senior Debt are paid in full, in cash or Cash Equivalents,
any payment or distribution to which the Holders of Securities would be entitled
shall be made to the holders of such Senior Debt (except that Holders of
Securities may receive and retain (i) Permitted Junior Securities and (ii)
payments made from the trust described in Article VIII so long as, on the date
or dates the respective amounts were paid into the trust, such payments were
made with respect to the Securities without violating this Article X). The term
"payment" means, with respect to the Securities, any payment, whether in cash or
other assets or property, of interest, principal (including redemption price and
purchase price), premium, Liquidated Damages or any other amount on, of or in
respect of the Securities, any other acquisition of Securities and any deposit
into the trust described in Article VIII. The verb "pay" has a correlative
meaning.
SECTION 10.03. Default on Senior Debt. The Company shall not make any
----------------------
payment or distribution upon or in respect of the Securities (except from the
trust described in Article VIII) if (i) a default in the payment of any
Obligations with respect to Designated Senior Debt of the Company occurs and is
continuing (a "payment default") or any other default on Designated
67
Senior Debt of the Company occurs and the maturity of such Designated Senior
Debt is accelerated in accordance with its terms or (ii) a default, other than a
payment default, occurs and is continuing with respect to Designated Senior Debt
of the Company that permits holders of the Designated Senior Debt of the Company
as to which such default relates to accelerate its maturity (a "non-payment
default") and, in the case of this clause (ii) only, the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company, a
Representative for, or the holders of a majority of the outstanding principal
amount, of any such issue of Designated Senior Debt of the Company. Payments on
the Securities may and shall be resumed (a) in the case of a payment default,
upon the date on which such default is cured or waived and, in the case of
Designated Senior Debt of the Company that has been accelerated, such
acceleration has been rescinded, and (b) in case of a non-payment default, the
earlier of the date on which such non- payment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt of the Company has been
accelerated. No new period of payment blockage may be commenced on account of
any non-payment default unless and until 360 days have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice. No non-payment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee, shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or waived for
a period of not less than 90 days.
Notwithstanding any other provision in this Section 10.03, during any 365
day period, there must be at least 180 days where there is no Payment Blockage
Notice in effect.
SECTION 10.04. Acceleration of Payment of Securities. If payment of the
-------------------------------------
Securities is accelerated because of an Event of Default, the Company shall
promptly notify the Representative of the lenders under the Existing Credit
Facility of the acceleration. If any Debt under the Existing Credit Facility is
outstanding, the Company may not make any payment on account of such accelerated
Securities until five Business Days after such holders of such Debt receive
notice of such acceleration and, thereafter, may pay the Securities only if this
Article X otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a distribution is
-----------------------------------
made to Securityholders that because of this Article X should not have been made
to them, the Securityholders who receive such distribution shall hold it in
trust for holders of Senior Debt of the Company and pay it over to them as their
interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is paid
-----------
in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of the Company to receive
distributions applicable to Senior Debt of the Company. A distribution made
under this Article X to holders of Senior Debt of the Company which otherwise
would have been made to Securityholders is not, as between the Company and
Securityholders, a payment by the Company on Senior Debt of the Company.
SECTION 10.07. Relative Rights. This Article X defines the relative
---------------
rights of Securityholders and holders of Senior Debt of the Company. Nothing in
this Indenture shall:
68
(1) impair, as between the Company and Securityholders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its available
remedies upon an Event of Default, subject to the rights of holders of
Senior Debt of the Company to receive distributions otherwise payable to
Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No right of
--------------------------------------------
any holder of Senior Debt of the Company to enforce the subordination of the
Debt evidenced by the Securities shall be impaired by any act or failure to act
by the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of the Company may give the notice;
provided, however, that, if an issue of Senior Debt of the Company has a
-------- -------
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt of the Company
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Debt of the Company or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior Debt of
the Company with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of Senior Debt of the
Company; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not to Prevent Events of Default or Limit Right
---------------------------------------------------------
to Accelerate. The failure to make a payment pursuant to the Securities by
-------------
reason of any provision in this Article X shall not be construed as preventing
the occurrence of an Event of Default. Nothing in this Article X shall have any
effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding anything
-----------------------------
contained herein to the contrary, payments from money or the proceeds of
Government Obligations held in trust under Article VIII by the Trustee for the
payment of principal of and interest on the
69
Securities shall not be subordinated to the prior payment of any Senior Debt or
subject to the restrictions set forth in this Article X, and none of the
Securityholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Debt of the Company or any other creditor of the Company.
SECTION 10.13. Trustee Entitled to Rely. Upon any payment or distribution
------------------------
pursuant to this Article X, the Trustee and the Securityholders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representative for the holders of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of
the Company and other Debt of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Debt of the Company to participate in any
payment or distribution pursuant to this Article X, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt of the Company held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
other facts pertinent to the rights of such Person under this Article X, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.14. Trustee to Effectuate Subordination. Each Securityholder
-----------------------------------
by accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt of the
Company as provided in this Article X and appoints the Trustee as attorney-in-
fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With
------------------------------------------------
respect to the holders of Senior Debt of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article X. The Trustee shall not be deemed to
owe any fiduciary or other duty to the holders of Senior Debt of the Company and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt of the Company shall be entitled by
virtue of this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Each Securityholder by accepting a Security acknowledges and agrees
----------
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt of the Company,
whether such Senior Debt was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Debt and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt.
70
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article shall apply to amounts due to the Trustee pursuant to other sections of
this Indenture.
ARTICLE XI
SECURITY GUARANTEES
SECTION 11.01. Security Guarantees. Each Guarantor hereby jointly and
-------------------
severally unconditionally and irrevocably guarantees as a primary obligor and
not merely as a surety, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of, premium, if any, and
interest and Liquidated Damages, if any, on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, subject to any applicable
grace period, and all other monetary obligations of the Company under this
Indenture (including obligations to the Trustee) and the Securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Securities (all of the foregoing being hereinafter
collectively called the "Guaranteed Obligations"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Guarantor, and that
each such Guarantor shall remain bound under this Article XI notwithstanding any
extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest
to the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Guaranteed Obligations. The obligations of each Guarantor
hereunder shall not be affected by (a) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other
agreement or otherwise; (b) any extension or renewal of any Guaranteed
Obligations; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee
to exercise any right or remedy against any other Guarantor of the Guaranteed
Obligations; or (f) any change in the ownership of such Guarantor, except as
provided in Section 11.02(b).
Each Guarantor further agrees that its Security Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or
71
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or thing or omission or delay to do
any other act or thing which may or might in any manner or to any extent vary
the risk of any Guarantor or would otherwise operate as a discharge of any
Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Security Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest, premium or Liquidated Damages, if any, on any Guaranteed Obligation
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (i) the unpaid principal
amount of such Guaranteed Obligations, (ii) accrued and unpaid interest, premium
and Liquidated Damages, if any, on such Guaranteed Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary Guaranteed
Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Security Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section.
Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder
in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. (a) Any term or provision of
-----------------------
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be guaranteed (after giving effect to all its Guarantees
of Debt under the Existing Credit Facility) without rendering this Indenture, as
it relates to any such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors
72
generally, provided, however, that the Security Guarantee by HRI shall be
-------- -------
limited to an amount not to exceed, together with any Debt outstanding under the
Existing Credit Facility, 80% of the aggregate purchase price paid by HRI (which
purchase price was approximately $17 million) for the Harborside Healthcare -
Pawtuxet Village Nursing and Rehabilitation Center and the Harborside
Healthcare - Greenwood Nursing and Rehabilitation Center.
(b) This Guarantee as to any Guarantor shall terminate and be of no further
force or effect upon (i) the designation (in accordance with the provisions of
this Indenture) of such Guarantor as an Unrestricted Subsidiary or (ii) the sale
or other disposition of all of the assets of such Guarantor in accordance with
the terms of this Indenture, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any Guarantor then held
by the Company and its Restricted Subsidiaries; provided that the Net Proceeds
--------
of such sale or other disposition are applied in accordance with Section 4.06,
to the extent such Section is applicable to such disposition and is required
thereby, or (iii) the sale or other disposition of Capital Stock of any
Guarantor if (A) as a result of such disposition, such Person ceases to be a
Subsidiary of the Company and (B) the Net Proceeds of such sale are applied in
accordance with Section 4.06, to the extent such Section is applicable to such
disposition. If the Security Guarantee of any Guarantor terminates pursuant to
the foregoing provisions, such Person shall cease to be a Subsidiary, a
Guarantor or otherwise a party to this Indenture and, upon request by the
Company, the Trustee shall execute appropriate instruments acknowledging such
termination and the release of such Person from its obligations hereunder.
SECTION 11.03. Successors and Assigns. This Article XI shall be binding
----------------------
upon each Guarantor and its successors and assigns and shall enure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of
---------
either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of any
------------
provision of this Article XI, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
or further notice or demand in the same, similar or other circumstances.
73
ARTICLE XII
SUBORDINATION OF THE SECURITY GUARANTEES
SECTION 12.01. Agreement to Subordinate. Each Guarantor agrees, and each
------------------------
Securityholder by accepting a Security agrees, that such Guarantor's obligations
under its Security Guarantee are subordinated in right of payment, to the extent
and in the manner provided in this Article XII, to the prior payment in full in
cash or Cash Equivalents of all existing and future Senior Debt of such
Guarantor and that the subordination is for the benefit of and enforceable by
the holders of Senior Debt of such Guarantor. The obligations of a Guarantor
under this Article XII shall rank pari passu in right of payment with all
----------
existing and future Pari Passu Debt of such Guarantor, and shall be senior in
right of payment to all existing and future Subordinated Debt of such Guarantor.
Each Security Guarantee will also be effectively subordinated to any Secured
Debt of the applicable Guarantor to the extent of the value of the assets
securing such Debt.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
------------------------------------
distribution to creditors of any Guarantor in a liquidation or dissolution of
such Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Guarantor or its property, an assignment for
the benefit of creditors or any marshaling of such Guarantor's assets and
liabilities, the holders of Senior Debt of such Guarantor shall be entitled to
receive payment in full, in cash or Cash Equivalents, of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt, whether or
not allowed or allowable in such proceeding) before the Holders of Securities
will be entitled to receive any payment with respect to the Security Guarantee
and until all Obligations with respect to such Senior Debt are paid in full, in
cash or Cash Equivalents, any payment or distribution to which the Holders of
Securities would be entitled shall be made to the holders of such Senior Debt
(except that Holders of Securities may receive and retain (i) Permitted Junior
Securities and (ii) payments made from the trust described in Article VII so
long as, on the date or dates the respective amounts were paid into the trust,
such payments were made with respect to the Securities without violating this
Article XII).
SECTION 12.03. Default on Senior Debt of a Guarantor. A Guarantor shall
-------------------------------------
not make any payment or distribution upon or in respect of its Security
Guarantee if (i) a default in the payment of any Obligations with respect to
Designated Senior Debt of such Guarantor occurs and is continuing (a "Guarantor
payment default") or any other default on Designated Senior Debt of such
Guarantor occurs and the maturity of such Designated Senior Debt of such
Guarantor is accelerated in accordance with its terms or (ii) a default, other
than a Guarantor payment default, occurs and is continuing with respect to
Designated Senior Debt of such Guarantor that permits holders of the Designated
Senior Debt of such Guarantor as to which such default relates to accelerate its
maturity (a "Guarantor non-payment default") and, in the case of this clause
(ii) only, the Trustee receives a notice of such default (a "Guarantor Payment
Blockage Notice") from the Company, a Representative for, or the holders of a
majority of the outstanding principal amount of, any issue of Designated Senior
Debt of such Guarantor. Payments on the Security Guarantee of such Guarantor
may and shall be resumed (a) in the case of a Guarantor payment default, upon
the date on which such default is cured or waived and, in the case of Designated
Senior Debt of such Guarantor that has been accelerated, such
74
acceleration has been rescinded, and (b) in case of a Guarantor non-payment
default, the earlier of the date on which such Guarantor non-payment default is
cured or waived or 179 days after the date on which the applicable Guarantor
Payment Blockage Notice is received, unless the maturity of any Designated
Senior Debt of such Guarantor has been accelerated. No new period of payment
blockage may be commenced on account of any Guarantor non-payment default unless
and until 360 days have elapsed since the initial effectiveness of the
immediately prior Guarantor Payment Blockage Notice. No Guarantor non-payment
default that existed or was continuing on the date of delivery of any Guarantor
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Guarantor Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 90 days.
Notwithstanding any other provision in this Section 12.03, during any 365-
day period, there must be at least 180 days in which there is no Guarantor
Payment Blockage Notice.
SECTION 12.04. Demand for Payment. If payment of the Securities is
------------------
accelerated because of an Event of Default and a demand for payment is made on a
Guarantor pursuant to Article XI, the Trustee shall promptly notify the Company,
and the Company shall promptly (and in no event more than five Business Days
after receipt of such notice) notify the Representative of the lenders under the
Existing Credit Facility of the acceleration. If any Debt under the Existing
Credit Facility is outstanding, such Guarantor may not pay its Obligations under
its Security Guarantee until five Business Days after the holders of such Debt
receive notice of such demand and, thereafter, may pay its Obligations under its
Security Guarantee only if this Article XII otherwise permits payment at that
time.
SECTION 12.05. When Distribution Must Be Paid Over. If a distribution is
-----------------------------------
made to Securityholders that because of this Article XII should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Senior Debt of the relevant Guarantor and pay it over to
them as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Debt of a Guarantor is paid
-----------
in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of such Guarantor to receive
distributions applicable to Senior Debt of such Guarantor. A distribution made
under this Article XII to holders of Senior Debt of such Guarantor which
otherwise would have been made to Securityholders is not, as between such
Guarantor and Securityholders, a payment by such Guarantor on Senior Debt of
such Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the relative
---------------
rights of Securityholders and holders of Senior Debt of a Guarantor. Nothing in
this Indenture shall:
(1) impair, as between a Guarantor and Securityholders, the obligation of a
Guarantor, which is absolute and unconditional, to pay its Obligations
under its Security Guarantee to the extent set forth in Article XI; or
(2) prevent the Trustee or any Securityholder from exercising its available
remedies upon a default by a Guarantor under its Obligations under its
Security Guarantee, subject to the rights of holders of Senior Debt of such
Guarantor to receive distributions otherwise payable to Securityholders.
75
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No right
------------------------------------------------
of any holder of Senior Debt of a Guarantor to enforce the subordination of the
Obligations under the Security Guarantee of such Guarantor shall be impaired by
any act or failure to act by such Guarantor or by its failure to comply with
this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of a Guarantor may give the notice;
provided, however, that, if an issue of Senior Debt of a Guarantor has a
-------- -------
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt of a Guarantor
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Debt or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior Debt of
a Guarantor with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Debt of a Guarantor which may at any time
be held by it, to the same extent as any other holder of Senior Debt of such
Guarantor; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of a
Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article XII Not to Prevent Events of Default or Limit Right
-----------------------------------------------------------
to Accelerate. The failure of a Guarantor to make a payment on any of its
-------------
Obligations under its Security Guarantee by reason of any provision in this
Article XII shall not be construed as preventing the occurrence of a default by
such Guarantor under its Security Guarantee. Nothing in this Article XII shall
have any effect on the right of the Securityholders or the Trustee to make a
demand for payment on a Guarantor pursuant to Article XII.
SECTION 12.12. Trustee Entitled to Rely. Upon any payment or distribution
------------------------
pursuant to this Article XII, the Trustee and the Securityholders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of a Guarantor for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of a
Guarantor and other Debt of a Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII.
76
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt of a
Guarantor to participate in any payment or distribution pursuant to this Article
XII, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of such Guarantor
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
SECTION 12.13. Trustee to Effectuate Subordination. Each Securityholder
-----------------------------------
by accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt of each
of the Guarantors as provided in this Article XII and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
-----------------------------------------------------
Guarantor. The Trustee shall not be deemed to owe any fiduciary or other duty
---------
to the holders of Senior Debt of a Guarantor and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Securityholders or the
relevant Guarantor or any other Person, money or assets to which any holders of
Senior Debt of such Guarantor shall be entitled by virtue of this Article XII or
otherwise.
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor on
----------------------------------------------------
Subordination Provisions. Each Securityholder by accepting a Security
------------------------
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of a Guarantor, whether such Senior Debt was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Debt.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of this
----------------------------
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in writing
-------
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company:
Harborside Healthcare Corporation
000 Xxxxxxxx Xxxxxx
00
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Investcorp International Inc.
000 Xxxx Xxxxxx, 00 Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
And with respect to notices pursuant to Article VI, with copies to:
Xxxxxx, Xxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
telecopier no.: (000) 000-0000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be made in
compliance with Section 313(c) of the TIA and mailed to the Securityholder at
the Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA (S) 312(c).
78
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon
--------------------------------------------------
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section
13.05 hereof) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 13.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
To the extent applicable, the Company shall comply with the provisions of
Section 314(c)(3) of the TIA.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such individual,
such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining whether the
---------------------------
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
79
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee
--------------------------------------------
may make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
--------------
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE, THE SECURITIES AND THE
-------------
SECURITY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. A director, officer,
--------------------------
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION 13.11. Successors. All agreements of the Company and each
----------
Guarantor in this Indenture and the Securities shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number of
------------------
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents, cross-
---------------------------
reference sheet and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
80
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
HARBORSIDE HEALTHCARE CORPORATION
By: ___________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By: ___________________________
Name:
Title:
GUARANTORS:
HARBORSIDE HEALTHCARE LIMITED PARTNERSHIP
By: KHI CORPORATION, its general partner
By: ___________________________
Name:
Title:
BELMONT NURSING CENTER CORP.
By: ___________________________
Name:
Title:
ORCHARD RIDGE NURSING CENTER CORP.
By: ___________________________
Name:
Title:
81
OAKHURST MANOR NURSING CENTER CORP.
By: ___________________________
Name:
Title:
RIVERSIDE RETIREMENT LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE CONNECTICUT LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF FLORIDA LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
82
HARBORSIDE OF OHIO LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTHCARE BALTIMORE
LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF CLEVELAND LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE OF DAYTON
LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
83
HARBORSIDE MASSACHUSETTS LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE RHODE ISLAND LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE NORTH TOLEDO LIMITED
PARTNERSHIP
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTHCARE ADVISORS
LIMITED PARTNERSHIP
By: KHI CORPORATION, its general partner
By: ___________________________
Name:
Title:
84
HARBORSIDE TOLEDO CORP.
By: ___________________________
Name:
Title:
KHI CORPORATION
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP IV
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP V
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
85
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VI
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VII
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP VIII
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP IX
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
86
HARBORSIDE ACQUISITION LIMITED
PARTNERSHIP X
By: HARBORSIDE HEALTH I
CORPORATION, its general partner
By: ___________________________
Name:
Title:
SAILORS, INC.
By: ___________________________
Name:
Title:
NEW JERSEY HARBORSIDE CORP.
By: ___________________________
Name:
Title:
BRIDGEWATER ASSISTED LIVING LIMITED
PARTNERSHIP
By: NEW JERSEY HARBORSIDE
CORPORATION, its general partner
By: ___________________________
Name:
Title:
MARYLAND HARBORSIDE CORP.
By: ___________________________
Name:
Title:
87
HARBORSIDE HOMECARE LIMITED PARTNERSHIP
By: KHI CORPORATION, its general partner
By: ___________________________
Name:
Title:
HARBORSIDE REHABILITATION LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION, its
general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTHCARE NETWORK LIMITED PARTNERSHIP
By: HARBORSIDE HEALTH I CORPORATION, its
general partner
By: ___________________________
Name:
Title:
HARBORSIDE HEALTH I CORPORATION
By: ___________________________
Name:
Title:
88
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE.
HARBORSIDE HEALTHCARE CORPORATION
12% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2007
No. ___ CUSIP No.
$__________
Harborside Healthcare Corporation, a Delaware corporation (the "Issuer"),
promises to pay to _______________, or its registered assigns, the principal sum
of ___________ in U.S. Dollars on August 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Additional provisions of this Security are set forth on the other side of
this Security.
HARBORSIDE HEALTHCARE CORPORATION.,
By:______________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK.
as Trustee, certifies that
this is one of the Securities [Seal]
referred to in the Indenture,
By: _________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12% Senior Subordinated Discount Note due 2007
1. Interest
--------
HARBORSIDE HEALTHCARE CORPORATION., a Delaware corporation (the "Issuer"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above.
The Issuer will pay interest semi-annually in arrears on February 1 and
August 1 of each year commencing on February 1, 2005; provided that no interest
shall accrue on the principal amount of this Security prior to August 1, 2004
(the "Full Accretion Date"), and no interest shall be paid on this Security
prior to the Full Accretion Date.
Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. The Issuer shall pay interest on overdue principal at the
rate borne by the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
2. Method of Payment
-----------------
The Issuer will pay interest (except defaulted interest) on the Securities
to the Persons who are registered holders of Securities at the close of business
on the January 15 or July 15 immediately preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuer 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 Issuer may pay principal and interest by
check payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, UNITED STATES TRUST COMPANY OF NEW YORK. (the "Trustee") will
act as Paying Agent and Registrar. The Issuer may appoint and change any Paying
Agent, Registrar or co-registrar without notice to the Holders. The Issuer or
any domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
4. INDENTURE
---------
The Issuer issued the Securities under an Indenture dated as of May __,
2001 (the "Indenture"), among the Issuer, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the TIA. Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are unsecured senior subordinated obligations of the Issuer.
Subject to the conditions set forth in the Indenture, the Issuer may issue
Additional Securities.
5. OPTIONAL REDEMPTION
-------------------
Except as set forth in the next two paragraphs, the Securities may not be
redeemed at the Issuer's option prior to August 1, 2002. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Issuer, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of Accreted Value)
set forth below plus in the case of a redemption after August 1, 2004, accrued
and unpaid interest thereon, if any, to the applicable redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the twelve-month period
beginning on January 1 of the years indicated below:
Redemption
Year Price
---- -----
2002 106.000%
2003 103.000%
2004 and thereafter 100.000%
At any time on or prior to August 1, 2002, the Securities may be redeemed
as a whole but not in part at the option of the Issuer upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event may any such redemption occur more than 90 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the Accreted
Value thereof (determined at the redemption date) plus the Applicable Premium to
the redemption date (subject to the right of Holders on the relevant record date
to receive interest due on the relevant interest payment date).
6. Notices of Redemption
---------------------
Notices of redemption shall be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address all in accordance with the
Indenture. If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
--- ----
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
--------
part.
If money sufficient to pay the redemption price of and accrued interest (if
any) on all Securities (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 Securities (or such portions thereof) called for redemption.
7. REPURCHASE AT THE OPTION OF THE HOLDER
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions set forth in the Indenture, to require the Issuer
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101% of the aggregate principal amount of the Securities to be
repurchased plus accrued and unpaid interest thereon, 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 that is on or
prior to the date of repurchase) as provided in, and subject to the terms of,
the Indenture.
8. SUBORDINATION
-------------
The Securities are subordinated to Senior Debt of the Guarantors, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Guarantors must be paid before the Security Guarantees may be paid. The
Issuer agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security 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 Issuer at its
written request unless an abandoned property law designates another Person.
After any such payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
------------------------
Subject to certain conditions set forth in the Indenture, the Issuer at any
time may terminate some or all of its obligations under the Securities and the
Indenture if the Issuer deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. AMENDMENT, WAIVER
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Securities or the Security Guarantees may be amended or
supplemented with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any existing default or
noncompliance with any provision of the Indenture or the Securities may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Issuer and the Trustee
may amend the Indenture or the Securities to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated Securities
are issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code), to provide for the assumption of the Issuer's or any
Guarantor's obligations to Holders of Securities in the case of a merger,
consolidation or sale of assets, to release any Security Guarantee in accordance
with the provisions of the Indenture, to provide for additional Guarantors, to
make any change that would provide any additional rights or benefits to the
Holders of Securities or that, as determined by the Board of Directors of the
Issuer in good faith, does not materially adversely affect the legal rights of
any such Holder under the Indenture, the Securities or the Security Guarantees,
to comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to provide for the issuance of
Additional Securities in compliance with Article II and Section 4.03 of the
Indenture.
14. DEFAULTS AND REMEDIES
---------------------
Under the Indenture, an Event of Default occurs if: (i) the Issuer
defaults in any payment of interest on any Security when the same becomes due
and payable, whether or not such payment shall be prohibited by Article X of the
Indenture, and such default continues for a period of 30 days; (ii) the Issuer
defaults in the payment of the principal of or premium, if any, on the
Securities, whether or not such payment shall be prohibited by Article X of the
Indenture; (iii) the Issuer fails to comply with other covenants and agreements
in the Indenture, subject to applicable grace periods as set forth in the
Indenture; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Debt of the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary occur, if the amount accelerated (or
so unpaid) exceeds $15,000,000; (v) certain events of bankruptcy, insolvency or
reorganization with respect to the Issuer or any Restricted Subsidiary that is a
Significant Subsidiary occur; (vi) certain judgments or decrees for the payment
of money in excess of $15,000,000 against the Company or any Restricted
Subsidiary that is a Significant Subsidiary occur; and (vii) except as is
permitted by the Indenture, a Security Guarantee by a Guarantor that is a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, denies
or disaffirms its obligations under the Indenture or its Security Guarantee. If
an Event of Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal,
premium, if any, or interest) if and so long as a committee of its Trust
Officers in good faith determines that withholding notice is in the interest of
the Holders.
15. TRUSTEE DEALINGS WITH THE ISSUER
--------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or
its Affiliates with the same rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and Stockholders
------------------------------------------------------------------------
No past, present or future director, officer, employee, incorporator, agent
or stockholder or Affiliate of the Issuer, as such, shall have any liability for
any obligations of the Issuer under the Securities, the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of any of the Guarantors, as such, shall have
any liability for any obligations of the Guarantors under the Security
Guarantees, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each holder of Securities and Security
Guarantees by accepting a Security and a Security Guarantee waives and releases
all such liabilities. The waiver and release are part of the consideration for
issuance of the Securities and the Security Guarantees. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.
17. GOVERNING LAW
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
18. AUTHENTICATION
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. ABBREVIATIONS
-------------
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. GUARANTEE
---------
The Issuer's obligations under the Securities are guaranteed on a senior
subordinated basis, jointly and severally, by the Guarantors
The Issuer will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
Harborside Healthcare Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention : Chief Financial Officer
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security on
the books of the Issuer. The agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuer pursuant
to Section 4.06 or 4.08 of the Indenture, check the box:
. 4.06 Asset Sale . 4.08 Change of Control
If you want to elect to have only part of this Security purchased by the
Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$__________.
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Security)
__________________
Tax I.D. number
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
